Retracement was the name of the game in yesterday’s US forex trading session, as currency traders paid attention to economic events outside the U.S.
The pound was one of the biggest movers throughout the session, as traders started to price in a “No” vote in Scotland’s ongoing referendum.
GBP/USD bounced by 37 pips to 1.6375 before it broke above 1.6400 after the session close. GBP/JPY also shot up by 37 pips to 178.09 before reaching the 108.00 level in the early Asian forex trading session.
This doesn’t mean that dollar traders didn’t get any action. A less-dovish-than-expected SNB announcement dragged USD/CHF 46 pips lower to .9342, while slight misses in Uncle Sam’s printed reports inspired EUR/USD’s retracement to 1.2918. In fact, even major comdoll pairs showed a bit of dollar weakness.
Though there weren’t any major comdoll-related reports yesterday, AUD/USD had staged a 30-pip jump to .8985 while NZD/USD also rallied by 33 pips to .8146. USD/CAD, which also reacted to slightly better-than-expected foreign securities purchase data, slipped to an intraday low of 1.0929 before closing at 1.0948, 42 pips lower than its session open price.
Our forex calendar shows Japan’s all-industry activity index at 4:30 am GMT and the final reading of its leading indicators at 5:00 am GMT as the only events to watch out for. These reports don’t usually have significant influence yen crosses, so watch out for other news events that might affect risk appetite.
For starters, Scotland is starting to count its votes. A “NO” decision could lead to more pound rallies, while a “YES” vote could erase all of the pound’s gains yesterday.
USD/JPY is also making a technical break above 109.00, so you can bet your momma’s pie that Asian session forex traders are watching it closely, too.
Good luck and good trading!
