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.
USD/JPY: yen is in the limbo
2019-11-11 • Updated
SELL 108.30 SL 108.85 TP 107.3 TP2 106.3 TP3 105.3
BUY 110.25 SL 109.7 TP 111.25 TP2 111.6 TP3 111.8
On the daily chart, USD/JPY formed an Inside bar. To continue the decline, bears need to pull the pair below support at 108.90 and 108.30. On the other hand, a break of resistance at 109.9-110.15 with the following triggering of the “Bat” pattern will increase the risks of a pullback.
On H1, USD/JPY went outside of a triangle. This increases the odds of formation of the “Crab” pattern with the target at 161.8%. The condition needed to resume the downtrend is the decline below support at 108.90.
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.
The most prominent technical factor that jumped at me as soon as I saw the chart though was the wedge I marked above.
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?
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