- US industrial production: -0.2% vs. 0.2% expected, -0.5% previous
- US Empire State manufacturing index: -2.0 vs. 6.0 expected, 3.1 previous
- US capacity utilization: 78.1% vs. 78.3% expected and previous
- US NAHB house price index: 59 vs. 56 expected, 54 previous
- US TIC long-term purchases: 53.9B USD vs. 22.5B USD expected, 25.6B USD previous
- CA manufacturing sales: -2.1% vs. -0.5% expected, 2.7% previous
- Greece denies talks of capital controls
- RBA meeting minutes on tap
It was a busy session for forex traders, as they priced in some U.S. reports and a couple of strong, start-of-the-week trends.
The dollar lost a few pips against its counterparts after Uncle Sam’s reports came out weaker-than-expected. Industrial production fell by 0.2% in May when market players had been looking for a 0.2% growth. Ditto for the NY manufacturing index, which fell by 2% when a 6% growth was expected.
The upside surprise in NAHB house price index was mostly shrugged off, as investors were more worried over manufacturing in the U.S. It also didn’t help the Greenback that the FOMC statement is around the corner and is inspiring some risk averse traders to square their long dollar positions ahead of the big event.
USD/JPY found resistance at the 123.50 area and ended the day at 123.39 while USD/CHF ended the session with a 76-pip drop (-0.81%) to .9288.
Even the comdolls gained a few pips on the dollar. Canada released a weaker-than-expected manufacturing sales report and oil prices slipped on the day but USD/CAD still ended the session 41 pips lower (-033%) than its open price.
There were no reports from Australia and New Zealand but the overall dollar weakness and a $5-rise in gold prices might have also helped AUD/USD climb by 24 pips (+0.31%) to .7764 and NZD/USD inch 16 pips higher (+0.23%) to .6995.
As eventful as the dollar majors’ price action were though, it was actually the European currencies that caught more attention. For starters, the euro bulls got busy after the euro zone printed strong trade numbers. Heck, they even shrugged off rumors of Greece possibly imposing capital controls by this weekend if its leaders can’t reach a deal with its creditors by then.
EUR/USD popped up by 73 pips (+0.65%) to 1.1284 while EUR/JPY also saw a 72-pip rise (+0.52%) to 139.23. Even EUR/CHF jumped by 45 pips (+0.43%) to an intraday high of 1.0543 before levelling off to is 1.0481 closing price.
The pound also caught attention even though we didn’t see any U.K. reports yesterday. Whether it’s traders positioning ahead of this week’s major U.K. reports or because of technical reasons, the pound rose higher across the board.
GBP/USD rose by a whopping 103 pips (+0.67%) to 1.5603, GBP/JPY popped up by 105 pips (+0.55%) to 192.53, and GBP/NZD jumped by 68 pips (+0.34%) to 2.0097.
Will we see more volatility among major forex pairs today? The RBA has the opening salvo with its monetary policy meeting minutes out at 1:30 am GMT. RBA Governor Stevens recently talked about further easing if it would benefit economic growth. Will other RBA members echo his sentiment? Watch your newswires closely for any clues on the central bank’s short-term biases!
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Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!