U.S. Session Forex Recap – Dec. 18, 2014

  • US CPI down by 0.3% in November vs. 0.1% decline expected, 0.0% growth previous
  • US core CPI up by 0.1% as expected vs. 0.2% uptick previous
  • CA wholesale sales up by 0.1% vs. 0.2% expected, 1.8% growth previous
  • Fed sparks risk-friendly trading on hawkish statement
  • Gold, oil, and ruble show slight recoveries

The Greenback started the session on a strong note as investors anticipated a hawkish decision from Janet Yellen and her gang. Two hours into the session, major dollar pairs had already shown dollar strength to the tune of around 50 pips.

Luckily for dollar bulls, the Fed was in the mood to accommodate expectations. Not only did it remove the closely-watched “considerable time” wording from the statement, but it was also clear on its plans going forward.

In her press conference, Yellen said that the Fed is “unlikely to begin the normalization process for at least the next couple of meetings,” and clarified that “a couple” means “two.” The central bank also expects further improvement in the labor market and inflation to move back to its 2% target over time. Yowza!

The Greenback spiked higher across the board at the release of the statement. EUR/USD ended the session 109 pips lower than its open price at 1.2342 while GBP/USD dropped by 133 pips to 1.5572, USD/JPY jumped by 148 pips to 118.69, and AUD/USD fell below the .8200 major support to close at .8122.

Will the dollar bulls trading the Asian session extend its gains? New Zealand has just released its GDP report, showing 1.00% growth in Q3 2014 vs. 0.7% growth expected. The BOJ has also started its monetary policy meeting, but isn’t expected to produce results today. If these reports don’t make waves in the forex scene, then watch out for possible continuation of yesterday’s price action.

Good luck and good trading!

See also:

London Session Recap

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