Daily FX Trading Review: Markets in Profit-Taking Mode? – Sept 22, 2014

Daily FX Trading Review: Markets in Profit-Taking Mode? - Sept 22, 2014

The Greenback resumed its rally against most of its major FX trading counterparts on Friday, despite the lack of top-tier data from the US economy. For today, only the existing home sales report is up for release and it might show a climb from 5.15M to 5.21M, which might allow the dollar to extend its gains. Also for today, FOMC member Dudley is set to give a testimony and his monetary policy bias could also affect dollar movement.

The euro dropped to the dollar once more, as the weak demand for the ECB’s targeted long-term refinancing operations weighed on the shared currency. German PPI came in line with expectations of a 0.1% decline while the euro zone current account balance showed a better than expected result. The German central bank monthly report is due today, along with a speech by ECB Governor Draghi. Dovish remarks could lead to more FX trading losses for the euro.

FX Trading Fundamentals

The pound gave up some ground on Friday, as traders booked profits off their long FX trading positions after the Scottish referendum. There have been no reports released from the UK then and there are none due today, which might keep pound pairs in consolidation for the time being.

The franc resumed its decline in recent FX trading, although it did manage to hold on to its recent levels to the euro. There have been no reports released from Switzerland then and none are due today, which could leave the franc sensitive to risk sentiment.

The yen made a bit of a recovery on Friday, thanks to profit-taking. The all industries activity index showed a 0.2% decline instead of the projected 0.4% uptick, confirming speculations that the Japanese economy still hasn’t recovered. There are no reports lined up from Japan today, leaving the yen at the mercy of FX trading market sentiment.

The Aussie and Kiwi resumed their weak bout to the dollar on Friday, with the Loonie managing to advance on the heels of better than expected Canadian CPI. The core version of the report showed a 0.5% gain while the headline figure stayed flat instead of posting the projected 0.1% decline. This was enough for traders to ignore the weaker than expected Canadian wholesale sales report. For today, there are no reports due from the comdoll economies.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.