U.S. Session Forex Recap – May 6, 2015

  • US trade balance: -51.4B USD vs. -41.7B USD expected, -35.9B USD previous
  • CA trade balance: -3.02B CAD vs. -0.8B CAD expected, -2.22B CAD previous
  • US IBD consumer optimism: 49.7 vs. 50.0 expected, 51.3 previous
  • US ISM non-manufacturing index: 57.8 vs. 56.2 expected, 56.5 previous
  • NZ unemployment rate: 5.8% vs. 5.5% expected, 5.8% previous
  • NZ employment change: 0.7% s. 0.8% expected, 1.2% previous
  • AU retail sales on tap
  • Japanese markets out on Constitution Day holiday

It was a bad day to be a Greenback fan yesterday, as forex traders priced in Uncle Sam’s weak trade data.

Well, at least it started out that way. The dollar fell across the board when the U.S. March trade deficit came in at 51.4 billion USD, higher than the 41.7 billion USD expected and a six-year high for the data. Analysts believe that the number was so bad that Q1 2015 GDP might have to be revised to as low as ZERO. Yowza!

Luckily for the Greenback, forex bears kept calm and carried on after the better-than-expected ISM non-manufacturing report was released. After all, a strong forward-looking report looks better than a weak backward-looking data. It also helped that U.S. 10-year Treasury yields rebounded to 2.174%, higher than Monday’s 2.135% reading. Recall that higher yields tend to attract more government bond buyers.

EUR/USD gained 101 pips (+0.91%) to 1.1222 before settling back to its 1.1191 closing price while USD/JPY fell by 64 pips (-0.53%) to 119.85 and GBP/USD popped up by 55 pips (+0.36%) to 1.5171.

The comdolls also gained a few on the dollar even though forex players priced in different factors. AUD/USD continued to recover from the RBA’s interest rate cut and actually ended the session with a 66-pip gain (+0.84%) to .7942 while NZD/USD saw a 60-pip rise (+0.80%) to .7559. USD/CAD, which also reacted to higher oil prices and Canada’s highest trade deficit on record, saw a V-type price action with its decline to 1.2003 before closing at 1.2070.

Let’s see if comdoll traders extend their partying with today’s data on tap. New Zealand has just published worse-than-expected employment numbers that have weighed heavily on the Kiwi. Be careful though, as we could see intraday reversals much like what we saw on the Aussie yesterday! Japanese markets are out on Constitution holiday, so keep an eye out for more volatility on the Kiwi pairs.

Good luck!

See also:

London Session Recap

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