We don’t have a lot of top-tier reports on tap so market sentiment will likely push the major currencies around.
Think USD/JPY will pop up to a cool pullback level?
Before moving on, ICYMI, yesterday’s watchlist looked at EUR/USD’s Head and Shoulders pattern ahead of the U.S. 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:
BOC Gov. Macklem shares need to “rebalance the labour market” to reach 2% inflation
U.S. revokes Russia’s market economy statusBusinessNZ manufacturing PMI slumps from 52.0 into a contractionary 49.3 in October
New Zealand’s food price increase hits 14-year high at 10.1% y/y in October
Japan producer inflation jumped 9.1% y/y in October, slower than September’s 10.2% gain but above expected 8.8% increase
Japan’s Finance Minister Suzuki and head of FX Kanda watching JPY moves with a “high sense of urgency,” ready to take action if needed
Oil prices headed for sharp weekly drop as demand concerns overshadowed fears of tighter supply
Crypto lender BlockFi limits platform activity, including a halt on client withdrawals
China Covid cases top 10,000, Beijing highest in over a year
European stock investors on alert for heightened balance sheet stress
Upcoming Potential Catalysts on the Forex Economic Calendar:
EU’s economic forecasts at 10:00 am GMT
SNB Chairman Jordan to give a speech at 12:45 pm GMT
US preliminary UoM consumer sentiment at 3:00 pm GMT
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, which broke below a descending triangle consolidation on the 4-hour time frame, is now consolidating just above the 140.00 psychological handle.Will USD/JPY see more losses today? Or will there be enough demand to push USD/JPY to a pullback zone?
Stochastic is on the bulls side with its “oversold” signal on the chart.
On the other hand, both the 100 and 200 SMAs have turned lower and it looks like the 100 SMA is ready for a bearish crossover.
The economic calendar is pretty light today with both the U.S. and Canada observing holidays.
If more traders price in yesterday’s slower-than-expected CPI, then USD/JPY could drop lower to the 139.00 or 137.50 previous inflection points.
But if we see some profit-taking, or if today’s headlines encourage USD-buying, then USD/JPY could retest its broken support near 145.30.