Asian Session Morning: USD and The Data Depended On

May 27, 2015

Asian Session Morning:
You may have noticed a slight re-naming of our morning blog this week. We are still letting the Vantage FX News Centre evolve naturally and the name and format is just a natural progression of the idea.

US Durable Goods Orders beat expectations to the upside overnight, pushing the USDX back inside it’s previously broken trend line and on target for new highs again. The Durable Goods print came in with a 1.0% jump on expectations, helping to confirm that the Fed was justified in not putting as much weigh on any Q1 economic slowdown.

USDX Daily:
usdx2
Click on chart to see a larger view.

The data dependent line has been repeated over and over throughout the Q1 slowdown and the market loves these sorts of prints actually backing up the talk and confirming that the Fed actually does have the foundation that it needs to begin raising rates.

With things starting to quickly unravel in Greece, there is now no hope that the government will be able to reach it’s upcoming repayment requirements. This heaps more pressure on an already unstable coalition government with yet another parliament re-shuffle likely. This would allow new reforms to pass parliament, taking yet more money from an already strangled nation but avoiding the uncertainty of elections or an exit from the Eurozone.

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On the Calendar Today:
Each of the notes on the Asian Session portion of the calendar are 2nd tier data but worth keeping an eye on none the less.

Greece will surely be top of the agenda at the G7 Meetings today in Germany while the major Central Bank risk comes out of Canada with their Rate Statement to finish the evening.

Wednesday:
JPY Monetary Policy Meeting Minutes
USD FOMC Member Lacker Speaks
AUD RBA Deputy Gov Lowe Speaks
AUD Construction Work Done

USD G7 Meetings
CAD BOC Rate Statement
CAD Overnight Rate

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Chart of the Day:
Yesterday on the @VantageFX Twitter and Facebook pages, we discussed the possibility of a USD/JPY breakout.

The idea was that two touches of resistance wasn’t able to reject price off the level and the third was likely to be the strew that broke the camels back and breakout.

USD/JPY Daily:
uj2
Click on chart to see a larger view.

Price really didn’t mess around when it got there either, hitting stops and momentum carrying the breakout through. A Core Durable Goods beat a bit later in the night kept the rally pushing through and the daily candle basically closed on it’s highs.

Where to now for USD/JPY? Interested in hearing your views so please leave a comment below or mention @VantageFX on Twitter.

Dane Williams – @VantageFX

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