Article Highlights

  • Japan’s trade deficit narrowed from 0.24T JPY to 0.18T JPY
  • Australian MI leading index down by 0.1% in May
  • U.K. jobs data and BOE meeting minutes due today
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Let the hunger games begin! Oh sorry, I meant waiting game. Dollar pairs were in consolidation mode over the past few hours while forex traders figure out their game plan ahead of the FOMC statement later today. USD/JPY is cruising along the 123.40 level (+0.06%), EUR/USD is treading carefully at 1.2650 (+0.08%), and USD/CHF is trying to keep its head above the .9300 handle (-0.12%).

Yen pairs were in the mood for some rallies, with EUR/JPY up 30 pips to 139.00 (+0.22%) and GBP/JPY up 11 pips to 193.00 (+0.06%), after Japan printed a smaller trade deficit of 0.18 trillion JPY compared to its previous 0.24 trillion JPY shortfall. Components of the report showed that exports picked up by 2.4% year-over-year, marking their ninth consecutive monthly increase.

Commodity currencies were slightly weaker, however, with the Aussie and Kiwi logging in losses against the dollar and the yen. In Australia, the MI leading index showed a 0.1% decline in May, suggesting a potential slowdown in overall economic activity. Meanwhile, Kiwi traders are still reeling from the 1.3% slump in dairy prices recorded in New Zealand’s latest global dairy trade auction.

AUD/USD is down 21 pips (-0.27%), NZD/USD is lower by 12 pips (-0.17%), AUD/JPY is down 22 pips (-0.23%), and NZD/JPY is lower by 12 pips (-0.14%). Between the two, the Aussie has shown more strength recently, with AUD/NZD up by 6 pips (+0.05%) to 1.1085.

Pound pairs could steal the spotlight in the upcoming London trading session, as the U.K. jobs report and the BOE meeting minutes are up for release at 9:30 am GMT. The economy probably added 12.5K jobs in May, better than the previous 6.5K increase and probably enough to keep the unemployment rate unchanged at 5.5%. Average earnings are expected to pickup by 2.5% from the previous 1.9% increase, which would reflect strong wage growth.

Any surprises from the BOE minutes might also push pound pairs around, although members are expected to have voted unanimously to keep interest rates and asset purchases unchanged.  Don’t be surprised if most dollar pairs continue to consolidate for the next few hours as forex traders bite their nails ahead of the FOMC statement in the U.S. session. In the meantime, I suggest you read up on Forex Gump’s writeup on the 3 Things to Watch Out for in the FOMC Statement!

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. 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!