We’ve got the Canadian CPI readings waiting!
CAD/JPY could be in a big triangle move today, so it’s best to keep your eyes on these inflection points.
Before we move on, ICYMI, yesterday’s watchlist looked at USD/JPY pulling back from its rally ahead of this week’s higher level events. Be sure to check if it’s still a good game!
And now for the main headlines that rocked the markets in the last trading sessions:
Headlines and recent economic data for the market:
The Empire State Manufacturing Index in the United States It fell sharply from +10.8 to -31.8 vs. -3.7 expected in April, marking its biggest drop since April 2020 as orders and shipments fell
Bostick Federal Reserve official He shared that he tends to pause tightening but that the FOMC has yet to decide what to do, noting that it is appropriate to wait for the effects of a rate hike to kick in.
Majority Leader in the US House of Representatives McCarthy He says the White House is not conducting any serious debt ceiling negotiations
Canadian wholesale It rebounded 46% m/m in March versus an estimated decline of 0.3% and a previous drop of 1.4%.
Australian Westpac Consumer Confidence Index It fell from 9.4% to -7.9% to reflect deteriorating levels of confidence, reaching the lowest level since the outbreak of the pandemic.
RBA meeting minutes May It kept the door open for rate hikes, as policymakers remain wary of the risks of higher inflation
Chinese fixed asset investment Declining from 5.1% to 4.7% YoY in April versus an estimated improvement of 5.7%
Chinese industrial production Acceleration from 3.9% to 5.6% yoy in April, below the expected 10.9% increase
Retail sales in China It rose from 10.6% yoy to 18.4% in April, still less than the expected jump of 22%.
Number of claimants in the UK It rose by 46.7k against the expected figure of 31.2k in April, adding to the previous rise of 28.2k in unemployment.
Price action news
Higher-yielding commodity currencies were well positioned in the previous trading day as the Australian, New Zealand and Looney managed to maintain their gains despite the downbeat US updates.
Either that or these riskier holdings benefited from dollar weakness stemming from lack of developments in US debt ceiling talks and a disappointing Empire State Manufacturing Index.
However, the comdoll gang was forced to hike some of its recent profits when the China data dump came into the red during today’s Asian trading session.
Possible catalysts coming in the economic calendar:
Canadian CPI readings at 12:30pm GMT
US Core and Core Retail Sales at 12:30pm GMT
Energy exploitation and industrial production in the US at 1:15pm GMT
FOMC Member Williams Speech at 4:15pm GMT
FOMC Member Goolsby’s Speech at 6:30pm GMT and 11:15pm GMT
Quarterly Wage Price Index in Australia at 1:30 AM GMT (May 17).
Use our new file Currency heat map To quickly see a visual overview of the forex market price movement! 🔥 🗺️
Canadian dollar / Japanese yen for an hour in forex Planned by TV
This forex pair has formed lower highs and higher lows since the beginning of the month, consolidating in a triangle pattern.
The price is currently testing the resistance at the key psychological level of 101.00 and might consider a breakout higher.
If that happens, CAD/JPY could break the next upside barrier at R1 (101.22) and target R2 (102.35).
On the other hand, if the triangle resistance holds, the pair may fall back to the triangle support at the pivot point (100.29) or even try to break down.
Any significant moves in the Canadian dollar could depend on the outcome of today’s Canadian CPI reports, as strong inflation numbers could revive hopes of a rate hike from the Bank of Canada.
However, analysts are mostly expecting lower readings, which could send the Canadian currency lower.