The Fed’s meeting minutes is up today!
How will the release affect USD/JPY’s consolidation near the 145.00 major area of interest?
Before moving on, ICYMI, yesterday’s watchlist checked out CAD/JPY’s short-term uptrend ahead of Canada’s CPI release. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Canada CPI for July: 0.6% m/m (0.4% m/m forecast; 0.1% m/m previous); core CPI was 0.5% m/m (0.5% m/m forecast; -0.1% m/m previous)
U.S. Retail Sales for July 2023: 0.7% m/m (0.3% m/m forecast/previous); Core Retail Sales was up 1.0% m/m (0.3% m/m forecast; 0.2% m/m previous)
NY Empire State Manufacturing Index for August: -19.0 (4.0 forecast, 1.1 previous)
U.S. Import Prices for July 2023: 0.4% m/m (0.2% m/m forecast; -0.1% m/m previous)
NAHB Housing Market Index for August fell to 50.0 vs. 56.0 forecast/previous
Minneapolis Fed President Neel Kashkari said “I’m not ready to say that we’re done” raising rates; adding that the Fed can “take a little bit more time, get some data” before deciding whether they need to do more
API report showed a 6.2M-barrel draw in U.S. commercial oil stockpiles for the week ending August 11 after last week’s surprise 4.07M-barrel build
Melbourne Institute Leading Index lifted slightly from -0.67% to -0.60% in July; “Below-trend growth momentum set to extend into 2024.”
As expected, the RBNZ kept its official cash rate unchanged at 5.5% in August, and said rates “need to remain at a restrictive level for the foreseeable future”
PBoC injected 297B CNY cash via seven-day reverse repurchase contracts; sets yuan fixing that was 783 pips stronger than the average estimate
Average new home prices in China’s 70 major cities fell 0.1% m/m in July, reversing the 0.01% m/m increase in June. Annual declines deepened from 0.51% to 0.64% in July.
U.K.’s headline inflation cooled from 7.9% to 6.8% as expected in July; core inflation remained at 6.9% (vs. 6.8% expected)
U.K.’s producer input prices fell by 3.3% y/y in July, down from June’s 2.2% y/y decline. Output (factory) prices also fell by 0.8% y/y from a 0.3% y/y increase in June.
Price Action News
Speculations of higher-for-longer interest rates in the U.S. as well as concerns for China’s economy dragged on “risky” currencies like NZD early in the day.
Fortunately for the New Zealand dollar, the Reserve Bank of New Zealand (RBNZ) also released a “hawkish hold” statement today. While the central bank kept its interest rates steady as markets are expecting, the central bank also believes that rates “need to remain at a restrictive level for the foreseeable future.” No rate cuts in sight!
RBNZ’s hawkish hold event was enough to pull NZD higher against its major counterparts except for the British pound which found support from a strong U.K. inflation read.
Eurozone quarterly employment at 9:00 am GMT
Eurozone flash GDP at 9:00 am GMT
Eurozone industrial production at 9:00 am GMT
Canada’s housing starts at 12:30 pm GMT
U.S. building permits at 12:30 pm GMT
U.S. industrial production at 1:15 pm GMT
FOMC meeting minutes at 6:00 pm GMT
NZ quarterly PPI at 10:45 pm GMT
Japan’s core machinery orders at 11:50 pm GMT
Australia’s labor market data at 1:30 am GMT (Aug 17)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
If you’re looking for USD pairs to trade ahead of the FOMC’s meeting minutes, then you’ll want to take a look at USD/JPY’s consolidation.
Specifically, the pair is forming a symmetrical triangle pattern right around the Pivot Point line in the 15-minute time frame.
Will we see a decisive breakout today?
A clear break below the trend line support sets USD/JPY up for a move back to the 145.20 previous support. It would also mean that USD/JPY will be trading below the 100 and 200 SMAs for the first time this week.
But if traders focus on the Fed’s continued hawkishness, then USD/JPY could bust above its trend line resistance and revisit previous highs closer to 145.70 or 145.80.
Whichever direction USD/JPY decides to go, make sure you’ve got your entries, exits, and trading plans locked in so you can trade for another day!