Article Highlights

  • CA housing starts: 187K vs. 179K expected, 180K in December
  • US employment trends index: 127.86 vs. 128.4 previous
  • China’s inflation numbers on tap
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With no major data to move the currencies in one direction, forex traders turned to minor news reports for price action.

The dollar lost pips to most of its counterparts, possibly on profit-taking after last Friday’s strong moves. It also didn’t help that commodities inched higher and U.S. equities finished the day in the red.

USD/JPY slipped by 5 pips (-0.04%) to 118.58 after dipping to an intraday low of 118.34, while USD/CHF fell by 17 pips (-0.18%) to .9239. Some EUR/USD bears also took intraday profits, as the pair capped the session 52 pips higher (+0.46%) than its session open price.

The euro’s gains didn’t stop at the dollar though. After getting hit in the earlier trading sessions, EUR/JPY recovered by 53 pips (+0.40%) to 134.27 and EUR/GBP inched 27 pips (+0.36%) to .7441.

Commodity-related currencies weren’t as lucky as the euro. AUD/USD and NZD/USD, still hurting from China’s weaker-than-expected trade data, didn’t go anywhere despite the overall dollar weakness. The former stayed just above .7800 while the latter lollygagged at the .7425 zone.

The Loonie was an exception, as trader finally priced in Canada’s better-than-expected jobs data last Friday. It also helped that oil prices rallied for another day and supported a technical bottom for the commodity. Brent oil futures rose by nearly 1% at $58.34, while WTI crude rocketed by 2.3% to $52.86.

USD/CAD dropped by 38 pips (-0.30%) throughout the session while CAD/JPY closed 24 pips higher (+0.25%) after hitting an intraday high at 95.54.

Will we see more volatility from Asian session forex traders today? China is set to print its inflation numbers at 2:30 am GMT. Analysts are expecting a 0.6% monthly decline (vs. 0.5% decline previous) and a 0.6% annualized decline (vs. 0.3% decline previous) from the report.

Significantly weaker-than-expected figures could hint at weak economic activity in China, so keep your eyes peeled in case we see another bout of risk aversion.

Good luck!

See also:

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Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!