U.S. Session Forex Recap – Feb. 17, 2017

  • U.S. building permits up from 1.23M to 1.29M in Jan
  • U.S. housing starts down from 1.28M to 1.25M vs. 1.23M forecast
  • Philly Fed index improved from 23.6 to 43.3 vs. 18.5 consensus
  • New Zealand headline retail sales up 0.8% in Q4 vs. 1.1% forecast
  • New Zealand core retail sales up 0.6% vs. 0.9% forecast

Even though U.S. reports were mostly upbeat, dollar bulls were disappointed that Trump still hasn’t shared the deets on his “phenomenal” tax plan during his speech yesterday.

Major Events:

Strong U.S. data – Medium-tier reports from Uncle Sam printed mostly stronger than expected results in the construction and manufacturing sectors. Building permits rose from 1.23 million to 1.29 million in January but housing starts dipped from 1.28 million to 1.25 million, still higher than the 1.23 million forecast. To top it off, the previous month’s housing starts figure was upgraded from 1.23 million to 1.28 million.

The Philly Fed index jumped from 23.6 to 43.3 to reflect much faster industry expansion, outpacing the consensus at 18.5. Components of the report indicated that the pickup was due to rising new orders and shipments. A larger percentage of firms, from 40% to more than 48%, reported increases in activity for January as the index managed to stay in positive territory for the seventh consecutive month.

President Trump’s not so “phenomenal” speech – The Donald called a surprise press conference in Washington so forex junkies waited with bated breath to see if he will finally unveil more details on his tax reform plan. Instead, the U.S. President simply repeated his previous statements on rebuilding the military, how the media is “out of control,” and the need to unify the country.

Of course, in good ol’ late-night TV entertainment fashion, Trump threw shade on the previous Obama administration by saying that he “inherited a disaster” and that “Democrats have screwed things up royally.” He did say that he will announce “something big” next week and that “tax reform is going to happen very quickly.”

Downbeat New Zealand retail sales – In the wee hours of the U.S. trading session, New Zealand printed its quarterly retail sales report and the results came in the red. Headline retail sales ticked up 0.8% versus the estimated 1.1% figure while core retail sales rose 0.6% instead of 0.9% in Q4. Aside from that, the previous period’s readings were downgraded from 0.9% to 0.8% for the headline figure and from 0.3% to 0.2% for the core figure to reveal that the consumer sector ain’t all that strong.

Underlying data from the Q4 retail sales report indicated that the gains were mostly from higher car sales, particularly more expensive models and SUVs. Majority of the components indicated an increase in sales volume for the period, led by pharmaceuticals, accommodation, and electronic goods. Rising price levels also contributed to the pickup in total value of retail sales.

Major Market Movers:

USD –  The Greenback extended its losses against most of its peers as traders warmed up to the idea that Trump’s tax reform plans might disappoint.

EUR/USD continued to rise to a high of 1.0680, USD/JPY tumbled from 113.50 to a low of 113.08, and USD/CHF is down from 1.0015 to a low of .9968. It held on to its gains against the comdolls with AUD/USD down to .7700, USD/CAD up to a high of 1.3086, and NZD/USD treading sideways above .7215.

See also:

London Session Recap

Asian Session Recap

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