U.S. Session Forex Recap – Oct. 20, 2014

  • CA inflation up by an annualized rate of 2.0% in September vs. 2.1% previous
  • CA core CPI up by an annualized rate of 2.1% in September vs. 2.1% previous
  • US building permits prints at 1.02M vs. 1.03M expected, 1.00M previous
  • US housing starts now at 1.02M vs. 1.01M expected, 0.96M last month
  • US University of Michigan consumer sentiment rises to 86.4 vs. 84.0 expected, 84.6 previous
  • China announces plans to extend 200 billion CNY worth of short-term loans to 20 large banks

The dollar’s price action was as mixed as a bag of beans during the U.S. forex trading session, as risk appetite got mixed in with a bit of dollar buying.

Uncle Sam’s better-than-expected reports helped bring the sexy back for the Greenback. Not only did housing starts and building permits come in higher than their previous figures, but the UoM consumer sentiment report also clocked in its highest reading since July 2007. On top of that, a recovery in U.S. equities herded money flows back to the dollar.

EUR/USD ended the session with a 74-pip drop to 1.2760, GBP/USD dropped by another 25 pips to 1.6087, USD/JPY jumped by 53 pips to 106.92, USD/CHF shot up by 54 pips to .9463, and AUD/USD slipped by 24 pips to .8765.

Another headline maker was the Loonie, which found little support from better-than-expected inflation figures. Apparently, the numbers aren’t expected to affect the Bank of Canada’s (BOC) stance, as it’s likely to focus on weakening global growth and falling commodity prices. USD/CAD still rocketed by 49 pips to 1.1278 while CAD/JPY only inched 7 pips higher to 94.81.

Speaking of the yen, we saw yen crosses extend their intraday uptrends thanks to risk-off economic themes like global growth slowdown and Ebola fears subside. While EUR/JPY still slipped by 12 pips to 136.43, we saw GBP/JPY stage a 58-pip jump to 172.00 and AUD/JPY rise by 19 pips to 93.70.

Will the risk-taking theme extend to the Asian forex trading session? We don’t have a lot of forex events on tap for the next couple of hours save for a final reading on Japan’s leading indicators report. This would give us opportunity to study this week’s charts and hopefully spot a couple of solid setups to trade for the week.

Good luck!

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!