U.S. Session Forex Recap – June 1, 2016

  • Canadian economy contracted 0.2% in March vs. -0.1% forecast
  • Canada’s Q1 GDP at 2.4% vs. 2.9% consensus
  • U.S. core PCE price index climbed from 0.1% to 0.2% as expected
  • U.S. personal income up by 0.4%, personal spending up by 1.0%
  • Chicago PMI fell from 50.4 to 49.3 vs. 50.8 forecast
  • U.S. CB consumer confidence index fell from 94.7 to 92.6 vs. 96.1 forecast
  • New Zealand overseas trade index up 4.4% in Q1 vs. 0.9% estimate

It’s all about volatility, baby! The U.S. session was action-packed, thanks to the return of U.S. traders from their long weekend and a bunch of top-tier releases.

Major Events:

Canadian GDP data – Canada’s monthly GDP report churned out weaker than expected results for March, as the economy contracted by 0.2% versus the projected 0.1% decline in growth. With that, the quarterly GDP reading landed at 2.4% for Q1, lower than analysts’ estimates at 2.9%.

Components of the March GDP reading indicated that the sharper than expected decline was spurred by weaker activity in mining, quarrying, oil and gas extraction, and retail trade. Construction output, on the other hand, posted gains while utilities and output from service-producing industries were mostly unchanged.

Mixed U.S. economic data – You win some, you lose some. Economic reports from the U.S. came in mixed, even in terms of consumer data. Personal income climbed by 0.4% as expected while personal spending jumped by 1.0% versus the projected 0.7% gain. However, the CB consumer confidence index reflected weaker optimism as it fell from 94.7 to 92.6 instead of rising to the estimated 96.1 reading.

Meanwhile, the slowdown in the U.S. manufacturing sector was underscored by the Chicago PMI, which slid from 50.4 to 49.3 to indicate industry contraction. Analysts had expected an improvement to 50.8.

Brexit polls favoring “leave” side – As my buddy Forex Gump pointed out recently, Brexit polls have been dictating pound price action these days and it just so happens that a couple of these have shown a wider lead in favor of the “leave” camp. Based on online and telephone surveys conducted by The Guardian, public opinion may be shifting towards exiting the EU, which might then bring more economic and financial uncertainty.

Major Currency Movers:

GBP – The pound was a whole lot heavier in recent trading sessions, sliding almost nonstop against its rivals on account of the latest Brexit poll results.

GBP/USD fell from 1.4655 to a low of 1.4465 during the U.S. session, GBP/JPY tumbled from a high of 162.89 to a low of 159.86, EUR/GBP pulled up to a high of .7689, and GBP/AUD dropped back below the 2.0000 handle.

USD – The Greenback had a mixed performance as it advanced to the European currencies but retreated against the Japanese yen.

USD/JPY is testing support near the 110.50 minor psychological mark, EUR/USD is down to 1.1128, USD/CHF is edging up to the .9950 minor psychological level, and USD/CAD popped up to a high of 1.3134.

Watch Out For:

  • 11:30 pm GMT: Australia AIG manufacturing index
  • 1:00 am GMT: Chinese official manufacturing PMI (50.0 expected, 50.1 previous)
  • 1:00 am GMT: Chinese official non-manufacturing PMI (53.5 previous)
  • 1:30 am GMT: Australian quarterly GDP (0.6% expected, 0.6% previous)
  • 1:45 am GMT: Chinese Caixin manufacturing PMI (49.3 expected, 49.4 previous)
  • 2:00 am GMT: Japan final manufacturing PMI

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!