Yooo the FOMC meeting minutes is up today!
Will the event push USD higher against JPY? Or will it extend USD/JPY’s downtrend?
Before moving on, ICYMI, yesterday’s watchlist looked at NZD/USD retesting a rising trend line support on the 1-hour time frame. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. manufacturing PMI falls to 57.5 in May vs. 57.5 expected
U.S. flash services PMI slips from 55.6 to 53.5 vs. 55.1 expected in May
Richmond manufacturing index registers at -9 vs. 9 expected, 14 in April
Record high U.S. house prices, rising mortgages drag April new home sales by an annual rate of 16.6% to a two-year low of 591K vs. 751K expected, 709K in March
Lower tech stocks drag Wall Street lower
ECB’s Lagarde sees rate at zero or slightly above by September
AU quarterly construction work falls by 0.9% in Q1 2022 vs. 0.9% increase expected
NZD shoots up as RBNZ raises rates by 50 bps to 2.0%, revises terminal rate from 3.35% to 3.90%
Germany GfK consumer confidence -26.0 vs -25.5 expected in June
China’s policymakers pledge targeted steps to support the economy
Asia stocks up but investors worry about rate hikes, China lockdowns
Upcoming Potential Catalysts on the Forex Economic Calendar:
ECB President Lagarde to participate in a panel discussion in Davos at 8:00 am GMT
BOJ Governor Kuroda to give a speech at 11:04 am GMT
U.S. core durable goods at 12:30 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
FOMC meeting minutes at 6:00 pm GMT
RBNZ Governor Orr to give a speech at 9:10 pm GMT
AU quarterly private capital expenditures at 1:30 am GMT (May 26)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/JPY
USD/JPY has been on a downtrend since hitting highs just above the 131.00 psychological area.
If you look at the 1-hour chart, you’ll see that upswings were held back by the 100 and 200 SMAs as well as a trend line resistance.
Will USD/JPY extend its downtrend today? Or will USD bulls find enough reason to push the pair above its resistance areas?
The Fed will print its latest meeting minutes later today. If we hear that the Fed is confident about its tightening schedule, or if we hear whispers of pausing its tightening in the foreseeable future, then USD could swing higher against JPY.
Don’t discount the markets’ risk aversion though!
Fears of high inflation and tightening by the major central banks have traders worrying about the growth of major economies including the U.S.
USD/JPY is already having trouble making new highs above the previous support and the 38.2% Fibonacci level of its last downswing.
If concerns over global growth trump the Fed’s meeting minutes event, then we could see USD/JPY make new May lows in the next trading sessions.
