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The NFP report is up today!

Think we’ll see explosive moves from the dollar when the report is released?

Before moving on, ICYMI, yesterday’s watchlist looked at USD/CAD’s short-term trend retracement ahead of the U.S. ISM report. 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:

BOE raises interest rates by 25 bps as expected but 4 out of 9 members voted for a 50 bps rate hike

BOE Gov Bailey: “We have not raised interest rates today because the economy is roaring away…An increase in Bank Rate is necessary because it is unlikely that inflation will return to target without it

ECB kept policies steady as expected in February

ECB President Lagarde acknowledged “the situation has indeed changed” for inflation risks, declined to repeat previous guidance that 2022 rate hikes are “unlikely”

U.S. initial jobless claims fall to 238K vs. 245K expected, 261K previous

U.S. ISM services PMI dips from 62.0 to 59.9 in Jan, the slowest since Feb 2021

U.S. factory orders drop by 0.4% after 1.8% gain in November

New Zealand’s building consents rise by another 0.6% in December

Upcoming Potential Catalysts on the Forex Economic Calendar:

Eurozone retail sales at 10:00 am GMT
U.S. NFP reports at 1:30 pm GMT
U.S. unemployment rate at 1:30 pm GMT
Canada’s labor market numbers at 1:30 pm GMT
Canada’s IVEY PMI at 3:00 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

USD/JPY 1-hour Forex Chart

USD/JPY 1-hour Forex Chart

I know we only recently talked about USD/JPY but another major U.S. report means we gotta look at the more closely watched dollar pairs!

USD/JPY has made a trip below the trend line since we last checked it out, but it looks like dollar bulls got their mojo back because the pair is now trading above the trend line and SMA support zones that we’ve marked.

Today’s U.S. NFP reports could provide bulls and bears the catalyst they need to push USD/JPY into an upswing or downswing.

Traders are pricing in a net increase of 166K jobs or so in January with the unemployment rate remaining at 3.9%. Based on the leading indicators that we’ve seen earlier this week, though, a much weaker January reading is also possible.

Disappointing U.S. labor market numbers would make the Fed think twice about its aggressive policy tightening schedule. This may help high-yielding bets but weigh on the safe-haven dollar.

Meanwhile, upside surprises could make the Fed think about implementing more rate hikes this year. USD/JPY could firmly breach 115.00 to retest the 115.75 previous highs.

If you’re not sure where you should place your entry and stop loss levels, then you might want to check out USD/JPY’s average daily volatility for clues.