Missed the strong rally on USD/JPY early this week?
This triangle resistance retest might be your chance to hop in on the climb!
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/CAD’s double bottom after the RBA hiked rates. 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:
Fed head Powell: Did not expect the jobs report to be extraordinarily strong
Powell: Disinflationary process has begun but still has a long way to go
Powell: Fed could do more if data remains hot
BOC head Macklem: If inflation meets forecasts, might not need another hike
U.S. President Biden asks Congress to raise debt ceiling in SOTU
API shows private oil inventory draw of 2M barrels vs. expected build
Japanese PM Kishida still in the process of selecting next BOJ head
Japan’s Economy Watchers Sentiment index up from 47.9 to 48.5 in Jan
French private payrolls flat in Q4 vs. projected 0.3% q/q uptick
Upcoming Potential Catalysts on the Forex Economic Calendar:
FOMC member Williams’ speech at 2:15 pm GMT
FOMC member Barr’s speech at 3:00 pm GMT
EIA crude oil inventories at 3:30 pm GMT
FOMC member Waller’s speech at 6:45 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/JPY
This pair already filled its weekend gap while pulling back to an area of interest on its hourly time frame.
Price appears to be finding support at the 50% Fib, which coincides with the 100 SMA dynamic inflection point.
A larger correction could still reach the 61.8% level that’s closer to the former triangle top and the 130.00 major psychological mark.
Technical indicators are pointing to a continuation of the bullish move.
The 100 SMA is above the 200 SMA to confirm that support levels are more likely to hold than to break.
Also, Stochastic has room to climb before reaching the overbought zone, which means that buyers could stay in control for much longer.
If that’s the case, USD/JPY could make its way back up to the swing high near the 133.00 handle pretty soon.
Of course it could all depend on what FOMC members have to say in their upcoming speeches. Note that Fed head Powell delivered mixed messages in his latest testimony, citing that the disinflationary process has started but that they could keep hiking if data stays very strong.
Mostly hawkish remarks from the likes of Williams, Barr and Waller later today could mean more upside for the U.S. currency, so stay tuned!
