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The yen made pips rain earlier today.

Can a short-term bounce keep USD/JPY from breaking a support level?

Before moving on, ICYMI, yesterday’s watchlist looked at GBP/AUD’s key support level after Australia printed its December jobs report. Be sure to check out if it’s still a valid trade!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

The Philadelphia Federal Reserve’s manufacturing conditions rose by 8 points to 23.2 in Jan.

U.S. initial jobless claims rise from 227K to 286K vs. 227K expected

U.S. existing home sales break three-month gains streak with 4.6% dip in Dec.

U.S. crude oil stockpiles up by 515K barrels last week, the first since Nov.

Russia’s central bank proposes banning crypto mining, trading

Business NZ’s manufacturing index improves from 50.6 to 53.7 in Dec.

Fuel costs and weak yen lift Japan’s annualized core consumer prices by 0.5% in Dec

U.K. consumer confidence falls from -15 to -19 amid inflation and interest rate concerns

U.K. retail sales slump by 3.7% (-0.6% expected) in Dec. after Nov. shopping spree and Omicron variant concerns

Upcoming Potential Catalysts on the Forex Economic Calendar:

ECB President Lagarde to talk “Global Economic Outlook” at 12:30 pm GMT
Canada’s retail sales reports at 1:30 pm GMT
Eurozone’s consumer confidence at 3:00 pm GMT
U.S. Treasury Secretary Yellen to speak at the World Economic Forum at 4:30 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 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

If you had traded the Asian session, then you’ll know that traders tracked Wall Street’s (weak) performance as they priced in disappointing earnings reports and concerns over the pace of Fed’s tapering/tightening schedule.

USD/JPY also saw some of the yen buying earlier today but the bulls kept it together around the 113.65 area. And why not? Japan’s yields weren’t that hot either.

Look out for bullish momentum now that USD/JPY has bounced from an inflection point that’s been keeping bulls and bears on their toes since December.

Bulls who believe that the dollar can regain some of its intraweek losses can target the 114.40 – 114.50 zone near the 100 and 200 SMAs as well as January’s trend line resistance.

Don’t discount more dollar selling though. Tons of traders can take out their USD exposure ahead of next week’s FOMC meeting.

If you see USD/JPY dipping back down, then you should be ready for a trip back to the 113.65 triangle support or even the 113.25 previous area of interest.