The Japanese yen is finding some support amidst threats of currency intervention from Japan!
How will today’s themes affect USD/JPY’s short-term consolidation?
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/JPY’s consolidation ahead of the BOJ’s core CPI report. Make 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:
In a panel interview, FOMC voting member Raphael Bostic repeated his expectation of one interest rate cut this year
In an interview, FOMC voting member Lisa Cook shared her preference for a “cautious approach” to policy adjustments
U.S. new home sales for February: 662K (675K forecast, 664K previous)
Westpac: Australia’s consumer sentiment index dipped by 1.8% in March (vs. 6.2% gain in February) on easing RBA rate cut bets and renewed concerns for the near-term economic outlook
China’s PBOC shifted its USD/CNY fix 1% higher at 7.0943 and marked the biggest adjustment since January
Japan’s services producer price index rose by another 2.1% y/y as expected in February
BOJ’s measure of underlying inflation came in at 2.3% y/y in February (2.5% y/y forecast, 2.6% in January)
Germany’s GfK consumer climate improved slightly from -28.8 to -27.4 in March; “The high degree of consumer uncertainty, paired with low confidence in Germany’s economic development, is holding back the willingness to buy”
Price Action News
Overlay of CHF vs. Major Currencies Chart by TradingView
With not a lot of fresh catalysts in the markets, the Swiss franc extended a downswing that started from last week’s surprise SNB interest rate cut.
It also didn’t help the safe haven that traders were cautiously optimistic ahead of this week’s anticipated data releases like the U.S. core PCE report.
CHF is in the red across the board and is trading the weakest against NZD, AUD, and GBP. It’s also registering the least losses against fellow safe havens like USD and JPY.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. core durable goods orders at 12:30 pm GMT
U.S. S&P house price index at 1:00 pm GMT
U.S. CB consumer confidence at 2:00 pm GMT
U.S. Richmond manufacturing index at 2:00 pm GMT
Australia’s MI leading index at 11:30 pm GMT
Australia’s CPI report at 12:30 am GMT (Mar 27)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
USD/JPY: 15-min
USD/JPY 15-min Forex Chart by TradingView
Depending on how far you’re looking, USD/JPY could be consolidating in a symmetrical triangle or a potential bullish pennant pattern in the 15-minute time frame.
A technical breakout may be on the table in the next trading sessions when the U.S. prints its core durable goods orders. And if USD/JPY sees an upside breakout first, then there will be increased odds of a currency intervention by Japanese officials.
What do you think? Which way will USD/JPY trade for the rest of the week?