Article Highlights

  • Australian and New Zealand markets open after yesterday’s holiday
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Ho-hum. It was a slow day for the major currencies, as the lack of economic releases coincided with cautiousness ahead of this week’s central bank events.

Major Events:

Caution ahead of this week’s central bank events – Our trader friends from Australia and New Zealand may be back from their holiday, but that, unfortunately, didn’t translate to increased volatility in the forex scene.

As I mentioned in my U.S. session recap, speculations over the upcoming Fed, Bank of Japan (BOJ), and Reserve Bank of New Zealand (RBNZ) monetary policy decisions are keeping traders on the sidelines. The current consensus is that none of the central banks would make any changes though the Fed might give clues for a June rate hike.

Japanese government’s post-earthquake projects – The market bees are abuzz with speculations over the size of the government’s budget for post-earthquake projects. 600B JPY was the consensus for a while until Finance Minister Taro Aso threw water to the fire and said that the amount has yet to be discussed. Aso also added that the BOJ isn’t likely to introduce more stimulus, as the officials have all their hands on deck on the earthquake relief programs.

Major Currency Movers:

JPY – The yen gained more ground against its counterparts thanks to a bit of risk aversion and optimism that the BOJ isn’t likely to add to its stimulus programs this week.

USD/JPY slipped by 17 pips (-0.15%), EUR/JPY is down by 14 pips (-0.11%), and AUD/JPY is down by 10 pips (-0.12%).

NZD – The Kiwi was supported by speculations that the RBNZ will likely stand pat and won’t be making any more interest rate cuts this week.

NZD/USD is up by 29 pips (+0.42%), NZD/JPY is up by 22 pips (+0.29%), and AUD/NZD is down by 43 pips (-0.38%).

Watch Out For:

  • 8:30 am GMT: U.K. BBA mortgage approvals (46.1K expected vs. 45.9K previous)

See more:

U.S. Session Forex Recap

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