Currency traders entered Tuesday’s Asia session not knowing what to expect. With the immense amount of economic data and rate decisions to be released later in the week, it seemed many investors weren’t willing to take longer term positions in the currency markets. Most of the majors began the early hours of the session trading in tight ranges, as many market participants looked for hints of the next directional move.
On the economic front, Australia Retail Sales was announced worse than expected. The data showed that sales only increased by .2% compared to the .6% economists had been forecasting. This sent AUDUSD plunging by 90+ pips from earlier highs near .8825 into the .8730s. The pair finally bounced back above .8750 into midsession trading. The somewhat correlated NZDUSD also moved lower by 40+ pips from the .7650s to lows near .7610.
USDJPY continued to hold medium support levels established in the New York morning around the 110.00 handle, after traders attempted several times to push the pair lower. Stops have likely been building below this level over the last session and a half. EURJPY impressively held support levels of its own around the 162.50 mark for the entire session. The longer term support area now hasn’t been breached for the better part of a week.
In the upcoming week Forex traders will have a lot on their plate. This week’s Asia sessions will be highlighted by key interest rate decisions from the Reserve Bank of Australia tomorrow, followed by the Reserve Bank of New Zealand on Thursday. In addition to these top tier releases from Asia, will be 3 other interest rate decisions from major Central Banks as well as Non Farm Payrolls due out on Friday to cap off the week.
Upcoming Data Releases (London Session):
- UK: 0930ET PMI Construction; Consensus 57
