It’s raining top-tier headlines and it’s only the middle of the week!
Based on the reports scheduled in the next trading sessions, I’ve decided to check out AUD/JPY’s consolidation.
Before moving on, ICYMI, yesterday’s watchlist checked out a potential Inverted Head and Shoulders pattern on GBP/CAD after the U.K. printed strong labor market numbers. 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:
US inflation climbed to 8.5% in March, highest rate since 1981
Dollar rebounds as Brainard assures markets Fed will stay the course
Putin says talks with Ukraine are at ‘dead end’OPEC cuts 2022 world oil demand forecast due to Ukraine war
AU MI consumer sentiment index dipped by 0.9% in April
Japan’s machinery orders fell by 9.8% in February, the biggest decline since April 2020
Japan’s Tankan sentiment index for manufacturers improves from 8 to 11 in April
NZD firms as RBNZ raises rates by 0.50% to 1.5%, the biggest rate hike in 22 years
Japanese shares bounce on tech rebound
China reports its exports rose 15.7% in March over a year earlier, while imports were flat due to virus disruptions
New Zealand welcomes Australian visitors as border restrictions ease
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. PPI report at 12:30 pm GMT
BOC’s monetary policy decision at 2:00 pm GMT
U.S. EIA crude oil inventories at 2:30 pm GMT
BOC’s presser at 3:00 pm GMT
BusinessNZ manufacturing index at 10:30 pm GMT
AU MI inflation expectations at 1:00 am GMT
AU labor market numbers at 1:30 am GMT (Apr 14)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/JPY
“Dead end” peace talks between Russia and Ukraine didn’t stop AUD/JPY from bouncing from its trend line support on the 4-hour time frame.
In fact, AUD/JPY is still inside an ascending triangle and looks set to retest the pattern’s resistance near the 94.00 psychological level.Let’s see if Australia’s jobs data would make or break the pattern this week.
Markets expect a slower pace of hiring in March, with jobs showing a net increase of 30K (from February’s 77.4K gain) while the jobless rate slips from 4.0% to 3.9%.
Better-than-expected numbers would pile on the support that commodity-related currencies have been seeing since the Reserve Bank of New Zealand (RBNZ) raised its interest rates by an aggressive 50 basis points.
AUD/JPY could break above 94.00 and head for the 2015 inflection points near 96.00.
I wouldn’t discount risk aversion dragging high-yielding bets though!
If traders focus on market themes like high U.S. inflation, high interest rates, or the broadening economic impact of the Russia-Ukraine war, then AUD/JPY could break below the trend line and 100 SMA support on the chart.