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The U.S. is printing growth numbers today!

Will the release affect the dollar’s intraweek trends? I’m looking at USD/JPY for clues.

Before moving on, ICYMI, yesterday’s watchlist explored a pullback play on USD/CAD ahead of the BOC and FOMC policy announcements. Be sure to check out if it’s still a valid trade!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

FOMC signals March rate hike, Powell hints there’s “quite a bit room” for higher rates

BOC surprisingly kept interest rates unchanged but signaled future rate hikes

U.S. new home sales surge to a nine-month high of 811K units in December

U.S. crude, gasoline stocks build, even as fuel demand surges – EIA

U.S. stocks shed gains, Treasury yields jump as Fed signals rate hikes could come ‘soon’

New Zealand consumer prices up by 5.9% from a year ago in Q4 2021, the highest in 30 years and much faster than the RBNZ’s 1.0% – 3.0% target range

Oil breaks $90/bbl for the first time since 2014 on Russia tensions

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.K.’s CBI realized sales at 11:00 am GMT
U.S. advance GDP at 1:30 pm GMT
U.S. core durable goods orders at 1:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
U.S. pending home sales at 3:00 pm GMT
Tokyo’s core CPI at 11:30 pm GMT
Australia’s quarterly PPI at 12:30 am GMT (Jan 28)

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 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

In case you missed it, the Fed stepped up its rate hike talks when Chairman Powell not only hinted that rate hikes are coming “soon” but also did NOT rule out four interest rate hikes this year.

The dollar ended up being king of pips, gaining against both risky and safe-haven currencies alike.

USD/JPY, in particular, gained another 60 pips or so after finding support from the 113.75 consolidation.

Can the bulls push the dollar to 115.50 before the bears step in?

The U.S. is publishing its Q4 2021 growth numbers today. Word around is that we’ll see a slowdown after a 6.7% annualized growth in Q3 2021.

Not-so-bad growth figures would support the Fed’s plan to take away its easy policies. USD/JPY could extend its intraweek gains and hit the major resistance near 115.50.

If we see much weaker than expected results, though, then the Fed might think twice about its hawkishness.

Dollar bears could take cues from Stochastic’s overbought signal and USD/JPY could dip back down to its 113.75 lows.