On the daily chart, bulls showed their strength as they managed to lead the pair outside of the long-term descending trend channel. Before that, the pair returned inside the medium-term uptrend channel. If buyers manage to keep the USD above 110.52, the odds of continuation towards 88.6% target of the Shark pattern will significantly increase.
On H1, USD/JPY formed a “Widening wedge” pattern. Pullbacks towards 23.6%, 38.2%, and 50% are usually used for opening longs.
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.