U.S. Session Forex Recap – Jan. 5, 2016

  • U.S. Dec ISM manu PMI down from 48.6 to 48.2 vs. 49.1 forecast
  • Employment index of ISM manu PMI down from 51.3 to 48.1
  • U.S. construction spending down by 0.4% vs. projected 0.7% gain

Risk aversion continued to reign supreme during the U.S. trading session, allowing the Greenback to rake in some gains against its forex rivals even with downbeat U.S. data.

Major Events:

U.S. ISM manu PMI disappointment – It looks like there’s still a lot of work to be done in the U.S. manufacturing sector, as its PMI reading for December slipped from 48.6 to 48.2 instead of improving to the estimated 49.1 reading. This means that the contraction was sharper during the month, led by declines in employment, prices, and imports.

On a more upbeat note, the indices for production and new export orders registered gains, suggesting increased business activity stemming from external demand.

China, China, China – As I’ve mentioned in my roundup of major market themes last year, China and its troubles often took center stage. This time, the world’s second largest economy doled out another round of gloom and doom in the financial markets, leading analysts to speculate about further PBOC easing.

Major Currency Movers:

AUD – Since the Australian economy is BFFs with China when it comes to international trade, the Aussie was in for a room full of hurt throughout the day after Chinese equities tanked earlier on.

AUD/USD dipped to a low of .7153 before recovering to the .7190 levels, AUD/JPY fell to a low of 85.31 then bounced back to 85.55 before the closing bell tolled, EUR/AUD enjoyed a brief stay above 1.5100 then retreated to 1.5063, and GBP/AUD is keeping its head above 2.0450.

JPY – The Japanese yen was one of the biggest winners for the day, taking advantage of the flight to safety in the forex arena.

USD/JPY is down 24 pips to 119.18 (-0.20%) after hitting a low of 118.69, EUR/JPY is down 16 pips to 121.16 (-0.12%) after dipping to 128.65, GBP/JPY fell to a low of 174.86 before climbing back to 175.45 (-0.13%), and NZD/JPY is down 15 pips to 80.47 (-0.17%).

Watch Out For:

  • 5:00 am GMT: Japanese vehicle sales
  • 8:00 am GMT: U.K. Halifax HPI

See more:

Asian Session Recap

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!