U.S. Session Forex Recap – Feb. 19, 2016

  • Philly Fed index improved from -3.5 to -2.8 as expected
  • U.S. initial jobless claims at 262K vs. 275K forecast
  • U.S. crude oil inventories up by 2.1 million barrels
  • Saudi Arabia won’t cut oil production
  • Canadian wholesale sales jumped 2.0% vs. 0.1% forecast in Dec

Risk-off vibes seem to be creeping back in the forex market once more, lifting the U.S. dollar and the Japanese yen against their counterparts.

Major Events:

Strong U.S. economic data – Reports from the U.S. came in mostly stronger than expected once more, following yesterday’s upbeat set and reminding forex market watchers that the economy is on relatively stable footing.

The Philly Fed index improved from -3.5 to -2.8 as expected, indicating a slower pace of industry contraction. Meanwhile, the initial jobless claims figure landed at 262K, lower than the projected 275K figure and the previous 269K reading, reflecting positive momentum in the hiring sector.

 

Oil, oil, oil – Oil-related headlines continued to influence commodity price action and overall market sentiment. As it turns out, crude oil stockpiles in the U.S. are still rising, with the latest data from the Energy Information Administration indicating an increase of 2.1 million barrels.

This, along with the news that Saudi Arabia absolutely won’t cut oil production, forced crude oil to return its recent gains. WTI crude oil sank to $30.49/barrel and Brent crude oil retreated to $33.88/barrel.

Major Currency Movers:

CAD – The Canadian currency also retreated against most of its forex peers when crude oil prices dipped. USD/CAD bounced off a low of 1.3654 to trade around 1.3760, CAD/JPY found resistance at 83.66 then fell to the 82.00 mark, GBP/CAD pulled up from its dive after reaching 1.9500, and EUR/CAD rallied from the 1.5160 area.

USD & JPY – These lower-yielders took advantage of fading hopes of a coordinated oil production cut or cap, although the yen emerged with more gains.

USD/JPY continued its slide to a low of 112.81, EUR/USD edged to a low of 1.1071, GBP/USD retreated from a high of 1.4379 to a low of 1.4315, and AUD/USD is testing support at .7150 again. EUR/JPY broke below its previous week low to test 125.50, GBP/JPY broke below the 162.00 handle, and AUD/JPY is trading around 80.60.

See also:

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!