We’ve got a few busy trading sessions ahead with the ECB policy decision AND the U.S. inflation reports on tap.
What are traders expecting today?
Before moving on, ICYMI, yesterday’s watchlist checked out NZD/USD for a retracement play as commodity prices continue to rise. 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:
White House: “expect to see a high headline and headline inflation” in February’s inflation data
EIA: U.S. oil stockpiles fell across the board, down by 1.9 million barrels last weekRussia proposes nationalizing foreign-owned factories that shut operations
Oil jumps after UAE says it is committed to OPEC+ supply pact, will not raise output on its own
RBA Deputy Governor Debelle unexpectedly resigns to take on CFO role in Fortescue Future Industries
Japan wholesale price inflation sees biggest spike in 41 years (+9.3% y/y) in February
Westpac-Melbourne Institute consumer sentiment index slid by another 4.2% after 1.3% dip in February as high interest rate, inflation, and flooding concerns hit
RICS: U.K. house price increases hit a new eight-month high despite squeezed budgets
Asian shares rally as Russia-Ukraine talks buoy sentiment
Upcoming Potential Catalysts on the Forex Economic Calendar:
ECB’s monetary policy decision at 12:45 pm GMT
ECB press conference at 1:30 pm GMT
U.S. CPI report at 1:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
BusinessNZ manufacturing index at 9:30 pm GMT
RBA Gov. Lowe to give a speech in Sydney at 10:15 pm GMT
Japan’s BSI manufacturing index at 11:50 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
Forex traders are in for a busy couple of trading sessions as the ECB’s monetary policy decision and U.S. inflation reports are released.
Markets await the European Central Bank (ECB)’s revised growth and inflation estimates that will likely contain guidance on the impact of Russia’s Ukraine invasion on the Eurozone economy.Meanwhile, the White House has advised us to expect “high headline and high inflation” for the month of February as the economy continues to price in post-Omicron economic activity and higher commodity prices.
Much faster than expected inflation would support speculations that the Fed’s anticipated March rate hike is only the first in the “series” of rate hikes this year.
I’ll be watching USD/JPY because it’s already knocking on the 116.25 ascending triangle resistance on the daily chart.
An upside surprise in the U.S. CPI release could start a fresh upswing for USD/JPY that could last until next week’s FOMC decision. The hawkish expectations, along with a risk-friendly trading environment could bust USD/JPY above its triangle resistance and rise by a couple hundred pips.
I wouldn’t rule out a buy-the-rumor, sell-the-news scenario though! After all, Stochastic is almost hitting overbought levels and USD/JPY’s intraweek gains look ready for some profit-taking.
Make sure you don’t get caught in fakeouts if you’re trading the news today!