U.S. Session Forex Recap – May 10, 2016

  • U.S. labor market conditions at -0.9 vs. -2.1 previous
  • Canadian housing starts at 192K vs. 195K forecast
  • U.K. BRC retail sales monitor down by 0.9% y/y

No major reports? No problem! The forex arena still saw a lot of action during the U.S. session, particularly on the commodities front.

Major Events:

Yen intervention jitters – It looks like Japanese officials’ jawboning attempts are starting to work their magic, as traders continued to lighten up on their long yen holdings throughout the day. Earlier on, Japan’s Finance Minister reiterated that they would be ready to intervene in the forex market if the yen gains too sharply. Prior to this, BOJ Governor Kuroda and Japanese Prime Minister Abe have also cautioned against excessive yen appreciation.

Easing speculations from Chinese trade balance – More and more traders seemed to warm up to the idea of additional easing, particularly from trade-dependent nations such as Australia and New Zealand, upon digging deeper into the Chinese trade balance released over the weekend.

While the headline reading showed a larger than expected surplus, components of the report indicated a 10.9% slump in the dollar value of imports, reflecting a large decline in demand for raw materials and commodities. This marked the 18th consecutive monthly drop in imports, indicating that the downturn in its appetite for commodities is far from over.

Major Currency Movers:

AUD & NZD – The Aussie and Kiwi continued to slide in the New York hours, as forex junkies predicted that more rate cuts are on the horizon.

AUD/USD fell from the .7350 area to test support at .7300, NZD/USD fell by more than 100 pips to consolidate around .6775, EUR/AUD popped up to a high of 1.5582, EUR/NZD is up to 1.6885, GBP/AUD is testing the resistance at 1.9700, and GBP/NZD is inching close to 2.1400.

JPY – The yen was also in a weak spot, particularly against the dollar and European currencies, but it managed to put up a fight against the comdolls.

USD/JPY edged up from the 108.00 area to a high of 108.63, EUR/JPY is testing the resistance at 123.50, and GBP/JPY climbed to a high of 156.44. AUD/JPY is still consolidating around 79.25, NZD/JPY is testing support at 73.00, and CAD/JPY reached a high of 83.56 before leveling off.

Watch Out For:

  • 1:30 am GMT: Chinese CPI y/y (2.3% expected, 2.3% previous)
  • 1:30 am GMT: Chinese PPI y/y (-3.8% expected, -4.3% previous)

See also:

Asian Session Recap

London Session Recap

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