On the daily chart, a natural pullback happened after USD/JPY reached 88.6% target of the “Bat” pattern. If bears manage to hold the pair within inside the downward trading channel, chances of a sharp decline’s continuation will increase substantially.
On the hour chart, a break of resistance at 109.50 will increase the risks of activation of the “Shark” pattern with a target of 88.6%. In an obvious bearish trend, rebounds from levels of 110.05-110.15 and 110,65 should be used for selling.
On January 12, the Bureau of Statistics will publish the Consumer Price Index (CPI) figures, a key index for determining interest rates. While we await the release, experts forecast a decline in the CPI data, a hint at weaker Dollar values in the global markets.
The trend in the scenario above is clearly bearish. We have also had a recent break of structure at the marked horizontal arrows, which means we can expect price to react from the supply zone that broke the structure.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.