Article Highlights

  • Chinese CPI up from 1.4% to 1.6% y/y in July
  • Chinese producer prices down by 5.4% vs. projected 5.0% drop
  • Japan’s current account surplus narrowed from 1.64T to 1.3T JPY
  • Japanese consumer confidence index slipped from 41.7 to 40.3 in July
  • Japan’s Economy Watchers sentiment index climbed from 51.0 to 51.6
  • Euro zone Sentix investor confidence reading due
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Yen forex traders tuned in to Japan’s data dump, which churned out mostly weaker than expected figures for July. The current account surplus narrowed from 1.64 trillion JPY to 1.30 trillion JPY, lower than the projected 1.41 trillion JPY surplus. Meanwhile, the consumer confidence index for July slumped from 41.7 to 40.3 instead of improving to the estimated 42.2 figure.

On a more positive note, the Economy Watchers sentiment index climbed from 51.0 to 51.6, reflecting increased optimism for the Japanese economy. However, this came in short of the consensus at 53.1. The yen traded lower against most of its forex counterparts so far, with USD/JPY up by 21 pips (+0.17%), EUR/JPY up by 31 pips (+0.23%), and GBP/JPY up by 35 pips (+0.18%).

Comdolls seemed unable to take advantage of the yen’s selloff, with AUD/JPY down 10 pips (-0.11%), CAD/JPY up by a measly 5 pips (+0.08%), and NZD/JPY trading sideways. Over the weekend, China printed mixed inflation readings, with its annual CPI improving from 1.4% to 1.6% and its PPI indicating a sharper than expected 5.4% decline.

Up ahead, only the euro zone Sentix investor confidence is up for release in the London trading session. The reading is slated to rise from 18.5 to 20.2, which would reflect an upbeat sentiment for the region. Stronger than expected data could lead to gains for the euro while weak results could trigger a quick selloff.

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