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We’ve got Canada’s CPI readings lined up!

CAD/JPY might be in for a big move from its triangle pattern today, so better keep your eyes on these inflection points.

Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY pulling back on its climb ahead of this week’s top-tier events. Be sure to check out if it’s still a good play!

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

Fresh Market Headlines & Economic Data:

U.S. Empire State manufacturing index declined sharply from +10.8 to -31.8 vs. -3.7 forecast in April, marking its steepest drop since April 2020 as orders and shipments fell

Fed official Bostic shared that he is inclined to pause tightening but that the FOMC has yet to decide what to do, citing that it’s appropriate to wait for rate hike effects to kick in

U.S. House Majority Leader McCarthy says that the White House isn’t making any serious negotiations for the debt ceiling

Canadian wholesale sales rebounded by 46% month-over-month in March versus an estimated 0.3% decline and an earlier 1.4% slump

Australia’s Westpac consumer sentiment index slipped from 9.4% to -7.9% to reflect worsening confidence levels, reaching the lowest level since the pandemic hit

RBA May meeting minutes kept the door open for rate hikes, as policymakers remain wary of upside risks to inflation

Chinese fixed asset investment slumped from 5.1% to 4.7% year-to-date/year in April versus an estimated improvement of 5.7%

Chinese industrial production accelerated from 3.9% to 5.6% year-over-year in April, short of the expected 10.9% increase

China’s retail sales rose from 10.6% year-over-year to 18.4% in April, still below the expected 22% jump

U.K. claimant count increased by 46.7K versus the expected 31.2K figure in April, adding to the previous 28.2K rise in joblessness

Price Action News

Overlay of Comdoll Pairs 15-min Chart

Overlay of Comdoll Pairs 15-min

Higher-yielding commodity currencies were off to a good run in the previous trading day, as the Aussie, Kiwi, and Loonie were able to sustain their rallies despite downbeat U.S. updates.

Either that or these riskier holdings took advantage of dollar weakness stemming from the lack of developments in U.S. debt ceiling talks and the disappointing Empire State manufacturing index.

However, the comdoll gang was forced to cough up some of its recent profits when China’s data dump came in mostly in the red during today’s Asian session.

Upcoming Potential Catalysts on the Economic Calendar:

Canadian CPI readings at 12:30 pm GMT
U.S. headline and core retail sales at 12:30 pm GMT
U.S. industrial production and capacity utilization at 1:15 pm GMT
FOMC member Williams’ speech at 4:15 pm GMT
FOMC member Goolsbee’s speech at 6:30 pm GMT and 11:15 pm GMT
Australia’s quarterly wage price index at 1:30 am GMT (May 17)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

CAD/JPY: 1-hour

CAD/JPY 1-hour Forex Chart

CAD/JPY 1-hour Forex Chart by TV

This forex pair has formed lower highs and higher lows since the start of the month, consolidating in a triangle pattern.

Price is currently testing the resistance at the 101.00 major psychological mark and might be considering a break higher.

If that happens, CAD/JPY could bust through the next upside barrier at R1 (101.22) and aim for R2 (102.35).

On the other hand, if the triangle resistance holds, the pair could retreat to the triangle support at the pivot point (100.29) or even attempt a break lower.

Any big Loonie moves could depend on the outcome of Canada’s CPI reports today, as strong inflation figures could revive hopes of interest rate hikes from the BOC.

However, analysts are pricing in mostly lower readings, which might bring some downside for the Canadian currency.