Heads up for the U.S. core PCE price index!

Will the Fed’s preferred inflation measure and Powell’s Jackson Hole speech cause big waves for USD/JPY today?

Before moving on, ICYMI, yesterday’s watchlist looked at EUR/USD forming a double bottom ahead of the U.S. preliminary GDP release. 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. Q2 GDP reading upgraded from 0.9% contraction to just 0.6%

U.S. preliminary GDP price index up from 8.7% to 8.9% in Q2

U.S. suspends 26 China-bound carrier flights on COVID-19 cases

Fed official Bullard: Inflation is to be more persistent than many on Wall St. think

RBNZ head Orr: At least a couple more rate hikes likely

Asian markets and commodities mostly flat ahead of Powell’s speech

Tokyo core CPI rose from 2.3% to 2.6% vs. 2.5% forecast

German GfK consumer climate index slumped from -30.9 to -36.5 vs. -32.1 estimate

European indices steady ahead of Jackson Hole events

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. core PCE price index at 12:30 pm GMT
U.S. personal income and spending data at 12:30 pm GMT
Fed Chairperson Powell’s speech at 2:00 pm GMT
U.S. revised UoM consumer sentiment index at 2:00 pm GMT
ECB and SNB officials to give testimonies in Jackson Hole Symposium

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 Greenback is stuck in consolidation against the yen, as dollar traders are likely holding out for main man Powell‘s speech.

Many expect the Fed head to drop more hints on what the central bank has up its sleeve, particularly when it comes to keeping inflation in check.

To add to the excitement, the U.S. core PCE price index is also up for release, likely underscoring Powell’s policy-related remarks.

How might USD/JPY react to all this?

The pair is currently in a steady uptrend, finding support at a short-term rising trend line that’s been holding all month.

The 100 SMA is above the 200 SMA to confirm that the climb is likely to gain traction. Also, Stochastic is heading higher to confirm that buyers have the upper hand.

I’ve got my eyes on the 50% Fib that’s just above the 135.00 handle, but the 38.2% level already seems to be holding as a floor. It even lines up with the 200 SMA dynamic support!

If any of the Fibs are able to keep losses in check, USD/JPY could rally back up to the swing high close to the 138.00 mark and beyond.