Article Highlights

  • Japan’s all industry activity index down by 0.9% vs. -0.3% expected, -1.0% previous
  • RBA’s Edwards: Aussie “a bit too high”
  • BOJ’s Kuroda: negative rates will help Japan’s economy
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Risk aversion reigned supreme in the forex markets, as Asian session traders extended yesterday’s themes and price action.

Major Events:

More losses for oil – Though there were no new bearish headlines for the Black Crack, Asian session traders pulled the commodity lower as they caught up to yesterday’s news. If you recall, an EIA report showed more stockpiles than expected in the U.S. while Saudi Arabia’s reluctance to cut production also weighed on oil prices. The decline in oil prices and overall risk aversion put the major Asian markets in the red by the end of the day.

Central bank jawboning– Reserve Bank of Australia (RBA) board member John Edwards and Bank of Japan (BOJ) Governor Kuroda both tried to jawbone their respective currencies today with the former hinting that the Aussie “is a bit too high” while Kuroda once again reiterated that negative interest rates are the way to go in achieving the BOJ’s inflation targets. Unfortunately, both were mostly shrugged off by forex players.

Major Currency Movers:

JPY – The low-yielding yen came out on top of its counterparts today thanks to overall risk aversion.

USD/JPY dropped by 73 pips (-0.64%), EUR/JPY fell by 47 pips (-0.37%), and GBP/JPY lost 90 pips (-0.55%).

Comdolls – We can’t talk about oil price decline and risk aversion without talking about the high-yielding commodity-related currencies.

AUD/USD lost 51 pips (-0.71%), USD/CAD popped up by 33 pips (+0.24%), and NZD/USD slipped by 17 pips (-0.26%).

Watch Out For:

  • 7:00 am GMT: German PPI report (-0.3% expected vs. -0.5% previous)
  • 9:30 am GMT: U.K. retail sales figures. Read Forex Gump’s trading guide to see what you could expect from the report!
  • 9:30 am GMT: U.K. public sector borrowing (-13.8B GBP expected vs. 6.9B GBP previous)

See more:

U.S. Session Forex Recap

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