U.S. Session Forex Recap – Nov. 26, 2014

  • US GDP (2nd reading) revised higher from 3.5% to 3.9%
  • US core PCE remains at 1.4% growth as expected
  • US FHFA house price index at 0.0% vs. 0.4% uptick expected
  • US Case-Schiller home prices up by 4.9% vs.4.6% uptick expected, 5.6% growth previous
  • US Richmond manufacturing index drops to 4 vs. 17 expected, 20 previous
  • US consumer confidence down to 88.7 vs. 96.0 reading expected, 94.1 previous
  • CA retail sales up by 0.8% vs. 0.6% uptick expected, 0.2% decline previous
  • CA core retail sales stagnates at 0.0% vs. 0.4% uptick expected, 0.2% decline previous

Not so fast! Just when we thought the Greenback was in for another rally, the bears stepped in and livened forex price action. What happened?!

The biggest headline in the early U.S. session trading was the upward revision in Uncle Sam’s GDP. According to the Bureau of Economic Analysis (BEA), the economy’s annualized growth was revised higher from 3.5% to 3.9% on a smaller decrease in private inventory investment than the initial estimates. Not only that, but personal consumption and non-residential fixed income have also increased faster than the BEA’s initial figures.

Not surprisingly, the dollar popped higher at the report’s release. EUR/USD fell to a new intraday low at 1.2402, while GBP/USD slipped to 1.5652, USD/JPY hit highs near 118.30, and USD/CHF made new intraday highs at .9699.

The good vibes didn’t last for Greenback bulls though. Risk-takers were waiting near technically significant levels, and took advantage of worse-than-expected U.S. reports that were released later in the day.

For starters, Richmond’s manufacturing index unexpectedly fell to a reading of 4 in November, lower the expected 17 reading and October’s 20 figure. A closer look reveals that manufacturing shipments fell from a reading of 23 to 1, while new orders also plummeted from 22 to 1. It also didn’t help that CB consumer confidence clocked in at 88.7 instead of the expected 96.0 and the previous 94.1 reading.

EUR/USD finished the session 52 pips higher than its open price, while GBP/USD also enjoyed a 45-pip jump. Meanwhile, USD/JPY slipped by 10 pips to 117.96 and USD/CHF dropped by 53 pips to .9640.

Even the comdolls were in the dollar selloff party. AUD/USD was stuck in the .8525 area thanks to a bearish RBA official statement in the Asian session, but NZD/USD took flight and closed 31 pips higher than its session open price. USD/CAD, which reacted to a better-than-expected retail sales report from Canada, dropped by 26 pips to 1.1254.

We’ll likely see a continuation of yesterday’s price action in today’s Asian session trading, as Australia’s quarterly construction report is the only data on tap. Still, this doesn’t mean that you should keep your eyes off your charts. In fact, you can use the possible Asian session volatility lull to prepare for the big economic reports hitting us in the later trading sessions.

Good luck!

See also:

London Session Recap

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