When you trade forex you need to always be aware of what happens fundamentally in the countries which impact your currency pair as it will always create volatility and price movements. Regardless if you trade based on technical indicators or not, you need to keep track of fundamentals as well otherwise you will not fully understand price action and the charts may confuse you. Good forex traders are always aware of both sides.
Global trade data is a very important aspect which should always be carefully read as trade has a big impact on GDP data and therefore the country’s currency. Yesterday, forex traders received three important reports on trade which all had an impact on the currency market and one more report will be released today. Keep in mind that strong export data is a positive sign for an economy and weak import data can hint at severe economic issues.
Japan started this week’s trade data bonanza and forex traders received an unexpected disappointment out of the Japanese economy. Economists were looking for a smaller trade surplus in April with estimates calling for a trade surplus of ¥153.0 billion. Keep in mind that Japan reported a trade surplus of ¥671.4 billion in March. The disappointment yesterday came as Japan reported a trade deficit of ¥146.2 billion.
China reported a much bigger than expected trade surplus for May and continues to expand its coffers. Economists expected the Chinese trade surplus to rise in May as compared to April. The released data came in a lot stronger than want was expected. The trade surplus for May surged to $59.49 billion, expected was a trade surplus of $44.80 billion and April’s trade surplus was $34.13 billion. Exports decreased by 2.5% and imports decreased by 17.6%.
Germany also reported a bigger than expected trade surplus for April. Economists expected the trade surplus to decrease to €19.4 billion from the €23.1 billion reported in March. The released report showed a trade surplus of €22.1 billion. Exports rose 1.9% while imports decreased by 1.3%. Today the UK will report its trade deficit which is expected to decrease to £2.600 billion in April from the £2.817 billion trade deficit reported in March.