European markets are looking extra jittery, as tensions in Russia are back in the spotlight.
Can this pair follow through on its breakdown?
Before moving on, ICYMI, yesterday’s watchlist checked out retracement levels on USD/CAD ahead of the Canadian CPI 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:
Canada’s headline CPI slipped by 0.3% vs. projected 0.1% dip, previous 0.1% uptickCanadian core CPI flat in August, following earlier 0.5% increase
New Zealand dairy prices rose 2.0% in latest GDT auction
Australia’s MI leading index down by 0.1% in Sept
New Zealand credit card spending surged 29.4% y/y in Aug
API crude oil inventories show smaller than expected build of 1.035M barrels
RBA Deputy Gov. Bullock: Policy rate level not yet restrictive
BOJ conducts unscheduled bond-buying of 10 to 25-year JGBs
Russian President Putin announces partial military mobilization
Putin: Our aim is to defend territories and Russia
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. existing home sales at 2:00 pm GMT
U.S. EIA crude oil inventories at 2:30 pm GMT
FOMC statement and economic projections at 6:00 pm GMT
FOMC press conference at 6:30 pm GMT
New Zealand Westpac consumer sentiment index at 9:00 pm GMT
New Zealand trade balance at 9:45 pm GMT
BOJ monetary policy decision (Sept. 22)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/JPY
The euro is on the move, fellas!
Earlier today, Russian President Putin surprised the markets with his announcement of partial military mobilization. He reiterated their goal of defending Russia and its territories from the West, citing an increase in armed forces and funding for their war efforts.Not surprisingly, this led to a lower open for European equities, dragging the shared currency down as well.
This bearish pressure was enough for EUR/JPY to break below the neckline of its head and shoulders pattern, confirming that a reversal from the uptrend is in the works.
If this keeps up, the pair could tumble by the same height as the chart pattern or around 200 pips!
Moving averages suggest that the odds are in favor of more losses, as the 100 SMA is below the 200 SMA. The pair is also trading below both indicators, so these could keep holding as dynamic resistance levels.
Stochastic seems to be turning lower again, reflecting a return in bearish momentum before the oscillator even reached the overbought region.
Don’t forget that the BOJ decision is lined up in the next Asian trading session and that officials have been paying close attention to the yen’s FX moves lately!