Article Highlights

  • U.S. Federal Budget Balance: $106.9B vs. $112.5B forecast, -$36.9B previous
  • Japanese M2 Money Supply slightly lower y/y: 3.4% vs. 3.4% forecast, 3.6% previous
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Volatility died down after the London session close with a lack of major news events or economic data points, but not before the Greenback and risk assets staged a quick rally.

We did get positive news in the form of a surplus reading in the U.S. Budget, and the positive sentiment from the U.S. stock market (which hit all time highs) helped keep risk currencies and the U.S. Dollar afloat on the session.  USD/JPY is back above 102.00 and moving higher, EUR/USD is still feeling the pain of Draghi’s words (hitting May lows around 1.3750), and GBP/USD throttled back from its rate hike speculation rally to favor the Buck, currently trading around 1.6870 after nearly hitting 1.7000 on the Monday session.

Coming up in the Asia session, we have Australian data in the form of housing and lending finance data, as well as the house price index at 2:30 am GMT. The expectations on the forex calendar are for lower reads, but since these are low tier events, the reaction is likely to be muted without a major surprise.

At 6:30 am GMT, we’ll see Chinese data in the form of retail sales, fixed asset investment data, and industrial production. Retail sales and industrial production are the ones to watch, which are both expected to come in slightly at or above previous reads (12.2% y/y and 8.8% y/y respectively), and because of their trade partnerships, the Aussie and Kiwi are the currencies to watch for reaction to the numbers.

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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