Gutsy enough to trade the U.S. CPI release today?
Here’s a neat pullback setup I’m watching on the hourly chart of USD/JPY.
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/AUD closing in on a key resistance level after the BOE’s warning to banks. 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:
Treasury Secretary Yellen worried about loss of adequate liquidity in Treasuries
U.S. headline producer prices up by 0.4% in Sept vs. projected 0.2% uptick
ECB head Lagarde: Discussion on QT has started and will continue
Fed official Bowman: Inflation expectations appear to be well-anchoredFed official Kashkari: May be a housing downturn but not necessarily a crash
FOMC minutes: Many policymakers see rates on hold for some time after reaching sufficient level
BOE accepts nearly 2 billion GBP worth of inflation-linked bonds in buyback operation
API reports surprise 7.05 million build in oil stockpiles
Hong Kong central bank intervened in forex market
Japanese producer prices jumped from 9.4% to 9.7% y/y in Sept
Japanese Finance Minister Suzuki: Excess FX volatility can hurt economy
Japanese cabinet secretary Masuno says they’re closely watching yen movements
Australia’s MI inflation expectations unchanged at 5.4%
German final CPI unchanged at 1.9% m/m or 10% on year-over-year basis
Swiss PPI rebounded by 0.2% after previous 0.1% dip
Upcoming Potential Catalysts on the Forex Economic Calendar:
G20 meetings still ongoing
U.S. headline and core CPI at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
EIA crude oil inventories at 3:00 pm GMT
Chinese CPI and PPI at 1:30 am GMT (Oct. 14)
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
This pair has climbed so far past “yen-tervention” territory that bulls might want to take it easy!
Despite so much jawboning from Japanese authorities, USD/JPY has zoomed up to the 147.00 handle, which seems to be holding as a ceiling for now.
Can it go any higher from here?
Price might need to pull back from its climb in order to gather more buying energy, and the Fibonacci retracement tool shows where more buyers might be waiting.The 61.8% level is lookin’ like a good spot to hop in, as it lines up with a short-term rising trend line and the 146.00 major psychological mark.
Stochastic is still on the move down for now, which suggests that the correction could go on until the oscillator reaches the oversold region.
Meanwhile, the 100 SMA is safely above the 200 SMA and is increasing its lead, confirming that the uptrend is likely to carry on.
Just don’t forget that the highly-anticipated U.S. CPI release is lined up today, so we might see a lot of action on the dollar front.
Analysts are expecting to see a 0.2% increase in price pressures for September, slightly higher than the earlier 0.1% uptick.
However, the year-over-year figure is slated to slow from 8.3% to 8.1% which might be enough reason for traders to book profits on their long dollar positions.
Do you think this pair can aim for fresh highs or will Japanese policymakers intervene again?
