On the daily chart of USD/JPY, after the pair reached the 127.2% target of the “AB=CD” pattern there is a correction to the downtrend. Bulls are trying to implement the “Wolfe waves” pattern and push the pair at least to the resistance at 108 (23.8% from the long-term bearish wave).
On H1, if the pair hits the resistance at 107, the “AB=CD” pattern with the 161.8% target will be implemented and odds of the rise to targets of “Shark” (113%) and “Wolfe waves” patterns will increase.
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.