Article Highlights

  • Japanese traders out on Showa Day holiday
  • New Zealand ANZ business confidence up from 3.2 to 6.2 in April
  • Australia’s quarterly PPI down by 0.2% vs. 0.2% uptick expected, 0.3% growth in February
  • Australia’s private sector credit up by 0.4% vs. 0.5% expected, 0.6% previous
  • PBoC boosts the yuan by its fastest pace since 2005
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Forex trading was a mixed bag of nuts, as economic reports clashed with central bank speculations. Here’s what happened during the Asian session!

Major Events:

Extension of yesterday’s moves – With our Japanese friends out on Showa Day holiday, most Asian session traders simply extended the moves from the U.S. session. More specifically, they continued to price in Uncle Sam’s weak GDP reading by dragging the dollar lower and pushing the yen higher in the charts.

Australia’s economic releases – The Land Down Under printed mixed economic reports with quarterly PPI showing a 0.2% decline from its 0.3% growth last quarter and the private sector credit climbing by 0.4% against last month’s 0.6% release. The Aussie didn’t pay much attention to it though, as it was merely moved along by the dollar and the yen’s price action.

PBoC pushes the yuan higher – The People’s Bank of China (PBoC) set the midpoint of the dollar-yuan trading band down by 0.56% to 6.4954, the fastest strengthening of the yuan since 2005 when the central bank removed its peg to the dollar.

Market players point to the BOJ’s recent decision as the catalyst for the move. The reason why China’s markets and the major currencies didn’t react much to the news is that the central bank might just be bringing its reference rate in line with the yuan’s offshore rates.

Major Currency Movers:

JPY – With not many new catalysts to price in, the yen bulls continued to party in the pip streets.

USD/JPY is down by another 88 pips (-0.81%), EUR/JPY is down by 48 pips (-0.39%), and GBP/JPY is down by 74 pips (-0.47%).

USD – The dollar continued its slide across the board as forex traders continued to price in Uncle Sam’s weak GDP readings and the Fed’s not-so-hawkish statement this week.

EUR/USD (+0.35%) and GBP/USD (+0.27%) are both up by 40 pips while USD/CHF is down by 33 pips (-0.34%) and AUD/USD is up by 30 pips (+0.39%).

Watch Out For:

  • 5:30 am GMT: French preliminary GDP (0.4% expected vs. 0.3% previous)
  • 6:00 am GMT: German retail sales (0.3% expected vs. 0.4% decline previous)
  • 7:00 am GMT: KOF economic barometer (102.9 expected vs. 102.5 previous)
  • 7:00 am GMT: Spanish flash GDP (0.7% expected vs. 0.8% previous)
  • 8:00 am GMT: SNB Chief Thomas Jordan to give a speech. Will we see some jawboning?
  • 8:30 am GMT: U.K. individual lending (5.0B GBP expected vs. 4.9B GBP previous)
  • 8:00 am GMT: SNB Chief Thomas Jordan to give a speech. Will we see some jawboning?
  • 8:30 am GMT: U.K. mortgage approvals expected to remain at 74K
  • 9:00 am GMT: Euro Zone CPI flash estimate (-0.1% expected vs. 0.0% previous)
  • 9:00 am GMT: Italy’s preliminary CPI expected to remain at 0.2%
  • 9:00 am GMT: Euro Zone unemployment rate expected to remain at 10.3%

See more:

U.S. Session Forex Recap

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