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

  • U.S. factory orders down by 1.7% vs. estimated 1.5% decline in Feb
  • U.S. labor market conditions index rose from -2.5 to -2.1
  • New Zealand NZIER business confidence index down from 15 to 2

Is this the calm before the storm? The lack of top-tier data ushered in a quiet start to the forex trading week, with the dollar showing a mixed performance.

Major Events:

Downbeat medium-tier U.S. data – In contrast to last week’s NFP release which turned out mostly stronger than expected, Monday’s batch of readings from the U.S. economy were far from impressive.

The February factory orders report indicated a 1.7% decline, larger than the estimated 1.5% drop and enough to erase the earlier 1.2% gain. Meanwhile, the labor market conditions index, which is based on a combined reading of 19 jobs-related indicators, printed a -2.1 reading for March. To make things worse, the previous reading was downgraded from the initially reported -2.4 reading to -2.5.

Oil exports: Saudi Arabia vs. Iran – Remember Iran’s pledge to ramp up its oil production and export activity to regain its lost market share? Well, the big boys over in Saudi Arabia ain’t having it! As it turns out, the OPEC hotshot is taking steps to limit Iran’s oil sales by banning vessels that transport Iranian crude oil from entering their waters.

Now this can wind up worsening the supply glut, as Iranian oil traders and shipbrokers are left with no choice but to take the barrels back to their stockpiles or keep their storage at sea. No wonder WTI crude oil prices fell below $36/barrel and Brent crude oil prices hit a low of $37.39/barrel yesterday!

Major Currency Movers:

USD – The U.S. dollar managed to recover against the commodity currencies but gave up ground to the British pound.

AUD/USD retreated to the .7600 major psychological support, NZD/USD reached a low of .6789, and GBP/USD popped up to a high of 1.4321 after testing support at 1.4200. EUR/USD is consolidating just below the 1.1400 mark and USD/JPY is testing support near the bottom of its range at 111.25.

CAD – The oil-related Loonie was in a weak spot against most of its forex peers due to the standoff between Saudi Arabia and Iran.

USD/CAD popped up from near the 1.3000 handle to a high of 1.3068, CAD/JPY is down to the 85.00 handle, EUR/CAD climbed from a low of 1.4822 to test resistance at 1.4900, and GBP/CAD is treading around the 1.8650 level.

Watch Out For:

  • 12:30 am GMT: Australia AIG services index (51.8 previous)
  • 1:00 am GMT: Japanese average cash earnings (0.2% expected, 0.0% previous)
  • 2:00 am GMT: New Zealand ANZ commodity prices (0.4% previous)
  • 2:30 am GMT: Australian trade balance (-2.55B AUD expected, -2.94B AUD previous)
  • 5:30 am GMT: RBA interest rate decision (Read Forex Gump’s Trading Guide here!)

See also:

Asian Session Recap

London Session Recap

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