A bit of profit-taking knocked USD/JPY back down to last week’s levels.
Will USD/JPY extend its uptrend today?
Before moving on, ICYMI, yesterday’s watchlist looked at EUR/USD’s Fibonacci retracement levels for bearish entry opportunities. 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:
New Zealand building consents rise by 10.5% in February vs. 8.7% drop in January
UK retailers raise prices by 2.1% in March, the fastest in nearly 11 years - BRC
Japan Feb retail sales fall by 0.8% in February - the first decline in 5 months - on Omicron curbs
New Zealand ANZ business confidence improves from -51.8 to -41.9 in March
Swiss KOF leading indicator slumps from 105.3 to 99.7 on war concerns
Germany declares ‘early warning’ for supply emergency as it prepares shift away from Russian gas
European stocks slip as bond markets suggest pain for U.S. economy
Oil rebounds on tight supply, prospects of new Russia sanctions
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. ADP report at 12:15 pm GMT
U.S. final GDP at 12:30 pm GMT
SNB’s quarterly bulletin at 1:00 pm GMT
U.S. EIA crude oil inventories at 2:30 pm GMT
AU building approvals at 12:30 am GMT (Mar. 31)
China’s manufacturing and non-manufacturing PMIs at 1:30 am GMT (Mar. 31)
Japan’s housing starts at 5:00 am GMT (Mar. 31)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/JPY
In case you weren’t watching USD/JPY’s charts, you should know that USD has been weakening against JPY since the start of the week.
Heck, JPY has been strengthening across the board in the past few days!
One reason could be skepticism around the Russia-Ukraine peace talks and concerns over China’s COVID-related lockdowns.
Or it could be that the Japanese are repatriating their JPY near the end of Japan’s fiscal year.
In any case, USD/JPY is now hanging out at 121.50, which was a key inflection point last week. Not only that, but it’s also near the 61.8% Fibonacci retracement of the last big upswing and the 200 SMA on the 1-hour time frame!
Bulls who are betting on USD/JPY going back to its uptrend can buy at current levels or put long orders at the first signs of bullish momentum.
Uncle Sam is printing its ADP report later today and if we see a much stronger showing than the 455K net employment that markets are expecting, then USD could head back to its monthly highs.
Don’t bet the farm on further USD/JPY strength though!
Germany has just issued an “early warning” on its gas supplies as it prepares for Russia possibly cutting off its deliveries. China’s official PMIs, due in the Asian session, could also weigh on risk sentiment if they miss market expectations.
If we see more risk-averse market themes, then USD/JPY may extend its intraweek downswing and break its uptrend on the 1-hour time frame.
