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USD/JPY is hitting a key resistance area ahead of BOJ’s event!

Will the pair extend its short-term downtrend today?

Before moving on, ICYMI, yesterday’s watchlist checked out EUR/NZD’s chart for a Fibonacci retracement opportunity. 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:

U.S. durable goods orders inched up 0.8% vs. 1.0% expected in March

U.S. house price index up by 2.1% (+19.4% y/y) in February

U.S. new home sales drop to an annual rate of 763K as higher prices crimp demand

Crude oil rose after Russia cut natural gas supplies to Poland and Bulgaria

New Zealand index NZX 50 hits 19-month low after Wall Street sell-off

Australia’s inflation hits a 21-year high of 5.1%, prompting AU banks to pull forward rate hike calls

GfK: German consumer morale falls to a historic low of -26.5 heading into May

Euro hits 5-year low, stocks down again on mixed earnings

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.K. CBI realized sales at 10:00 am GMT
U.S. pending home sales at 2:00 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
BOC Gov. Macklem to testify before a Senate committee at 10:30 pm GMT
NZ trade balance at 10:45 pm GMT
Japan’s retail sales at 11:50 pm GMT
Japan’s industrial production at 11:50 pm GMT
BOJ’s policy decision scheduled during the Asian session

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

The U.S. has a light data calendar today but that doesn’t mean we won’t see volatility on USD/JPY’s charts!

That’s because Japan has a couple of economic reports lined up including the industrial production and retail sales releases.

And that’s before the Bank of Japan (BOJ) prints its policy decision during the Asian session!

Markets don’t expect huge policy changes from the central bank but, thanks to the members’ verbal and actual yen intervention, we could see more jawboning during the event.

Will the BOJ’s event affect USD/JPY’s short-term downtrend? Notice that the pair has been trading inside a descending channel since it flirted with the 129.50 levels last week.

Any anti-USD or pro-JPY news can drag USD/JPY from the 100 and 200 SMAs in the 1-hour time frame.

If USD/JPY finds resistance from its current levels, then the pair might revisit its weekly lows below 127.00.

But if today’s risk aversion headlines push the dollar higher across the board, then USD/JPY may head to the top of the channel before encountering some resistance.

What do you think?