The Fed’s meeting minutes will be published today!
Will the event give the dollar bears a chance to short at higher prices?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at AUD/NZD possibly extending its downtrend ahead of Australia’s data release. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- Australia’s construction index hits a record high in March
- Australia services PMI improves to 55.5 in March – Markit
- Japan’s leading index hits highest since June 2018
- Asian shares climb to three-week highs on vaccine optimism, dollar retreats
- Oil prices rise on stronger economic outlook, U.S. stockpile draw
- Spanish services contraction narrows in March -PMI
- Italian service activity shrinks for 8th month running in March -PMI
- German private sector growth hits highest in more than 3 years – PMI
- Euro zone business activity returns to growth in March: PMI
Upcoming Potential Catalysts on the Economic Calendar:
- U.S. trade balance at 12:30 pm GMT
- Canada’s trade balance at 12:30 pm GMT
- Canada’s IVEY PMI at 2:00 pm GMT
- EIA crude oil inventories at 2:30 pm GMT
- FOMC’s meeting minutes at 6:00 pm GMT
What to Watch: USD/JPY
Asian session traders saw a relatively chill session today but that doesn’t mean we won’t see increased volatility the whole day.
I’m talking about the upcoming Fed’s meeting minutes, yo! I’m sure traders will look for a more specific tapering or interest rate hike schedule from Powell and his team.For now, USD/JPY is vibin’ its way up the charts after hitting support at 109.50.
If this upswing hits the 110.00 – 110.20 zone, then I’ll be watching for ways to short the Greenback. After all, 110.20 is around the 50% Fib retracement and area of interest back in late March.
It also looks like the combo of falling U.S. bond yields and global economic recovery-related optimism could pull the dollar to new April lows.
If the Fed squad even hint at tapering or talking interest rate hikes sooner than markets had expected, though, then I’ll be on the lookout for the dollar bulls partying above USD/JPY’s 1-hour trend line resistance.
A trip above the SMAs would make a good case for an upside breakout but it’s the trend line that we gotta watch for a more sustained upswing.