U.S. Session Forex Recap – Nov. 5, 2014

  • US factory orders down by 0.6% as expected vs. 10.0% downtick previous
  • US IBD/TIPP economic optimism up to 46.4 vs. 46.0 expected, 45.2 previous
  • US trade balance shows deficit of $43.0B vs. $40.2B deficit expected and -$40.0B previous
  • CA trade balance shows surplus of 0.71B CAD in September vs. 0.30B CAD deficit expected, 0.46B CAD deficit in August
  • EUR rallies on euro zone officials possibly challenging Draghi’s leadership
  • NZ quarterly jobs data prints strong numbers

Just when we thought forex price action was going to be boring, a report on the ECB popped up and pushed the euro higher across the board.

The biggest story throughout the U.S. forex trading session was a news report on the ECB suggesting that the ECB governing council is not happy over Draghi’s leadership. This hit QE junkies hard, as a change of leadership could mean less chances of the ECB launching its own QE program. If you recall, 10 out of 25 ECB members are already set against expanding the central bank’s coffers.

EUR/USD popped up to a high of 1.2578 at the release of the report before settling back at 1.2545 while EUR/JPY closed 70 pips higher than its open price at 142.60. Even EUR/GBP broke above its intraday consolidation and closed 22 pips higher in the session.

The euro wasn’t the only winner of the trading session. Other high-yielding currencies saw retracements against the low-yielding dollar and yen after Uncle Sam released mixed economic reports and Japan’s Chamber of Commerce Head Akio Mimura said that the yen has “weakened too much.”

AUD/USD found support from its London session lows and closed at .8737 while NZD/USD also inched 15 pips higher to .7774. The Loonie was unable to see gains against the dollar though, as continued oil price weakness pushed USD/CAD 20 pips higher to 1.1411.

Comdoll traders have another busy day ahead of them, starting with New Zealand just printing its better-than-expected employment numbers. The report showed a 0.8% jobs growth in the last quarter, dragging the unemployment rate from 5.5% to 5.4%. Not surprisingly, the Kiwi is pushed higher across the board. Australia has also printed its AIG services PMI, but so far the slight miss hasn’t affected the Aussie’s price action much.

Other reports you should watch out for over the next couple of hours include China’s HSBC services PMI at 1:45 am GMT and a speech by BOJ’s Kuroda at 3:30 am GMT. Keep your eyes peeled for these reports’ impact on risk sentiment, as they could either deepen retracements that we saw during the U.S. session or inspire a continuation of the previous days’ trends.

Good luck and good trading!

See also:

London Session Recap

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