U.S. Session Forex Recap – Dec. 3, 2014

  • US construction spending up by 1.1% vs. 0.6% uptick expected, 0.1% decline previous
  • Yellen makes no remarks on monetary policy
  • Fed’s Lacker: oil moves are not a financial stability concern
  • Fed’s Fischer hints that low oil price is good for Uncle Sam
  • Dollar dominates trading session, gold and oil tumble further
  • AU GDP, Chinese HSBC services PMI on tap

The Greenback reigned supreme during the U.S. forex trading session, as investors priced in more weaknesses in commodities and some upside technical breaks.

There were no notable reports printed throughout the session although we did hear from a couple of Fed officials. Lacker hinted that the recent oil weakness is not a cause for concern, while Fischer believes that its impact on inflation is temporary, and that it’s still generally good for the U.S. economy. Yellen’s speech at a college in D.C. was a non-mover, as she didn’t say anything about the Fed’s monetary policy.

USD/JPY led the dollar rally with its drive to an intraday high at 119.30. Aside from risk aversion and overall dollar strength, market players could have also realized that Moody’s downgrade of Japan’s credit rating isn’t enough to sway the central bank from sticking to its plans.

The rest of the majors simply traded on dollar strength. EUR/USD fell by 46 pips to 1.2382, GBP/USD slipped by another 18 pips to 1.5641, and USD/CHF popped up by 36 pips to .9723.

Comdoll bears also hustled some muscle especially as the overall dollar strength prompted market players to take profits from gold’s recent rally. Oil prices also took another hit thanks to an agreement between Iraq and the Kurdish regional government threatens to add more supply in the oil market. Last but not the least, a weak dairy auction weighed on the Kiwi, as it hinted at lower payout for dairy farmers in New Zealand.

AUD/USD might have stayed within the .8450 area, but USD/CAD shot up by another 21 pips to 1.1396 and NZD/USD slipped by 15 pips to .7807.

Will we see more comdoll weakness today? Australia is set to print its quarterly GDP data at 1:30 am GMT, followed by China’s official and HSBC services PMI readings. The Land Down Under is expected to print a 0.7% growth for Q3 2014 after weakening to a 0.5% uptick in Q2 2014. China’s services PMI numbers don’t usually affect intraday prices for long unless there are significant hits or misses.

Keep an eye out for possible surprises that could influence risk sentiment for the day!

See also:

London Session Recap

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