Asian session got off with a bang…
So, a lot has happened so far in today’s Asian and early European trading session.
The AUD got a tremendous boost after much better than expected building approvals. The expectation was for a 0.0% increase and the release came in at a whopping 6.4%.
The highest expectation for this in a group of 15 analysts was 3.0%, so overall a very good print.
Also down under, the NZD were pressured a lot when the recent NBNZ Business Outlook survey dropped to the lowest reading from 2009 printing at -44.9%.
The graph below will illustrate the reason why the market reacted strongly to this release…
The CAD also got quite a beating when news was released that Canada was rejected to take part in the current NAFTA negotiations.
The highly anticipated BOJ monetary policy decision showed that the bank made no real major changes. This led to JPY softness as a lot of market participants were expecting major changes.
BOJ Governor Kuroda gave the JPY a little push higher during his press conference with some hawkish comments about inflation. However he maintained that the bank is nowhere close to tightening monetary policy.
Important Scheduled Economic events during today’s session to watch:
09:00 (GMT) | EUR HICP Flash YY – this inflation report for the Euro will be closely watched by the market after last week’s ECB press conference
09:00 (GMT) | EUR GDP Flash Prelim YY – not really expecting a big impact from this release today but a big surprise can move the market
12:30 (GMT) | USD Core PCE Price Index YY – with the inflation for the US keeping to rise at a steady pace this reading will be closely watched. It is important to note that the PCE is the FED’s more preferred inflation reading so big changes here can be enough to move the markets.
12:30 (GMT) | CAD GDP MM – the market is expecting a rebound in GDP after the weak April reading, it will be interesting to see how the market reacts to this release after the recent NAFTA developments
Our pair selection for today:
We have chosen the AUDJPY as one of the pairs we will be watching closely today to look for trading opportunities.
AUDJPY – Daily
AUDJPY – M30
Further comments on our pair selection:
This trade idea is based on the intraday weakness of the JPY and the recent strength of the AUD
We would be interested in taking long opportunities at the predefined support levels as seen above.
The pair has been moving sideways in a big range on the Daily TF between 84.500 and 80.500. There is a lot of room to the upside for this pair if the current sentiment continues.
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Risk Disclaimer: Forex Trading carries a high level of risk. It is possible for traders to lose entire trading accounts if they do not know what they are doing. This post is not an enticement, signal or recommendation to buy or sell any financial instruments. All of the information in this post should only be considered as general market commentary and should never be used as trading or financial advice.
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