U.S. Session Forex Recap – September 16, 2015

  • US advance retail sales: 0.1% vs. 0.2% expected, 0.6% previous
  • US core retail sales: 0.2% vs. 0.3% expected, 0.7% previous
  • US Empire State manufacturing index: -14.7 vs. -0.5 expected, -14.9 previous
  • US capacity utilization: 77.6% vs. 77.8% expected, 78.0% previous
  • US industrial production: -0.4% vs. -0.2% expected, 0.9% previous
  • US business inventories: 0.1% as expected vs. 0.7% previous
  • NZ current account: -1.22B NZD vs. -1.40B NZD expected, 0.82B NZD previous
  • NZ Fonterra dairy auction shows 16.5% increase in dairy prices

Weak headline U.S. data led to dollar strength? What’s up with that?! Read on to see why forex traders decided to buy the Greenback despite weak U.S. reports.

Dollar domination was the name of the game during the U.S. session despite the onslaught of weak U.S. reports. Some analysts point to upward revisions in major reports like the retail sales while others say that the dollar’s strength had something to do with traders positioning their long trades ahead of today’s FOMC interest rate decision.

Yesterday we saw Uncle Sam’s retail sales report, which showed a 0.2% rise for the month of August. While the figure is slightly weaker than the expected 0.3% uptick, market players chose to focus on July’s upward revision from 0.6% to a 0.7% growth.

The dollar bulls also took in the six consecutive monthly increases for the report and concluded that lower oil prices might be spurring consumer spending. Strangely enough, these reasons (and possibly pre-FOMC positioning flows) were enough to offset the misses in other U.S. reports like the NY manufacturing index and business inventories.

The dollar ended up gaining against its major counterparts with EUR/USD dropping by 50 pips (-0.44%) to 1.1269 while GBP/USD also fell by a whopping 126 pips (-0.82%) to 1.5539. Even the low-yielding currencies gave up pips with USD/JPHY popping up by 79 pips (+0.66%) to 120.41 and USD/CHF inching 52 pips higher (+0.54%) to .9743.

The Greenback wasn’t as lucky against the comdolls, probably because the Aussie and Kiwi are strong on their own while an uptick in oil prices supported the Loonie. If you recall, the RBA’s decision to hold its policies steady gave more support to the Aussie. Meanwhile, a better-than-expected dairy auction in New Zealand helped boost the Kiwi across the board.

AUD/USD ended the session 19 pips higher (+0.27%) to .7145 while NZD/USD rocketed by 27 pips (+0.43%) to .6364 after dipping to an intraday low of .6294. Last but not the least is USD/CAD, which steadied at the 1.3250 area amidst the overall dollar strength.

Let’s see if today’s Asian session forex traders extend yesterday’s dollar rally. Only Australia’s Westpac MI leading index report at 12:30 am GMT is due for release. The report doesn’t usually affect the Aussie’s price action for long, so you might want to keep an eye out for other factors that might affect forex price action. Maybe some profit-taking before today’s FOMC meeting?

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!