U.S. Session Recap – July 1, 2014

  • CA monthly GDP up by 0.1% vs. 0.2% uptick expected and 0.1% previous growth
  • US Chicago PMI clocks in at 62.6 vs. 63.0 expected and 65.5 previous
  • US pending home sales grows by 6.1% vs. 1.2% growth expected and 0.5% uptick last month
  • USD weakens across the board, GBP jumps above major resistance levels

Gotta love end-of-quarter trading! Thanks to a couple of tier 2 reports and repatriation flows, the last trading session of Q2 2014 was anything but dull.

For starters, the Greenback crashed and burned against its major counterparts. One possible reason is that traders who had bought the dollar at the start of the season aren’t impressed with the weak U.S. bond yields performance and Uncle Sam’s recent reports and are now expecting a less hawkish Fed than they initially thought.

The dollar could have also weakened on repatriation flows. It’s possible that a lot of fund managers (especially in the European region) who had bet on dollar strength have simply taken off their trades. EUR/USD had jumped to a six-week high just below 1.3700 while GBP/USD broke above the 1.7100 handle. Even USD/CHF showed dollar weakness as it fell 32 pips to a .8868 close.

The Sterling was also one of yesterday’s headliners. As I just mentioned, Cable broke above 1.7100, a high not seen since October 2008, while GBP/JPY had also jumped by 63 pips to 173.38. Whether it’s because of repatriation flows, better-than-expected UK housing data, or a break above major resistance levels, investors had paid attention and caused a strong intraday rally.

But wait, the comdoll bulls and bears aren’t done partying! A few hours ago China had printed its manufacturing PMI numbers, which showed a reading of 51.0 vs. last month’s 50.8 reading. This was followed by HSBC’s final manufacturing PMI report, which had dipped from 50.8 to 50.7. Remember that a reading above 50.0 denotes industry expansion.

The RBA is up next at 4:30 am GMT when it prints its monetary policy decision. Analysts aren’t expecting changes to its interest rates but watch your news wires closely in case the central bank gives hints on its biases or future actions!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!