BOJ Gov. Ueda backed up earlier comments from Uchida and downplayed potential rate hikes, saying that “Even if we end minus rates, the accommodative financial conditions will likely continue”
German Bundesbank President Nagel to give a speech at 10:30 am GMT Canada’s January jobs data at 1:30 pm GMT
Germany’s inflation rate confirmed at 0.2% m/m (2.9% y/y) as expected in January
As you can see, the pair dropped like a rock earlier today as European currencies found it difficult to gain traction amidst expectations of central banks like the ECB and BOE not cutting interest rates as aggressively as the doves originally bet on.
Banking and financial services company ANZ is forecasting the RBNZ to raise its interest rates by 25bps in February and in April, taking the official cash rate to 6.0%
Chinese banks’ loan issuance hit an all-time high of 4.92 trillion CNY in January, beating January 2023’s 4.9 trillion figure and estimates of 4.67 trillion
We wouldn’t discount a buy-the-rumor, sell-the-news situation, though.
EUR/CAD, which is fast approaching a short-term range support, could bust through the area of interest and make new monthly lows.
If you are, then you’ll want to take a closer look at EUR/CAD’s potential range support!
If we see EUR-buying or CAD-selling in the next trading sessions, then you’ll want to look at previous inflection points like the Pivot Point (1.4500) mid-range zone or the 1.4520 range resistance area as potential profit targets.
If you’re looking for CAD setups to trade ahead of today’s Canadian jobs data release, then you’ll want to take a closer look at EUR/CAD’s range setup.
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
NZD saw a bit more volatility, though, thanks to bank and financial services firm ANZ sharing its forecast that the Reserve Bank of New Zealand (RBNZ) would raise its interest rates by 25 basis points in February AND in April, bringing the official cash rate to a whopping 6.0%. Wowza!
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
Italy’s industrial production grew by 1.1% (0.8% expected, -1.3% previous) in December
Price Action News
The Japanese yen caught some decent moves earlier today after Bank of Japan (BOJ) Governor Ueda backed up his fellow official and downplayed the impact of the central bank exiting its negative interest rate policies.
Who else is watching CAD ahead of Canada’s jobs data release?
Meanwhile, CAD may be getting an extra push from higher crude oil prices and/or pricing in Canada’s labour market data release.
If Canada sees another month of stronger-than-expected job creation, then the Bank of Canada (BOC) can join the RBA and RBNZ’s hawkish stances.
The New Zealand dollar popped up on the news, clocking in the biggest gains against European currencies like CHF, EUR, and GBP while limiting its gains against fellow comdolls like AUD and CAD.
Upcoming Potential Catalysts on the Economic Calendar:
RBA Gov. Bullock said “The Board hasn’t ruled out a further increase in interest rates but neither has it ruled it in,” adding that “an inflation rate with a four in front of it is not good enough and still some way from the midpoint of our target.”
Before moving on, ICYMI, yesterday’s watchlist checked out USD/JPY’s range resistance after BOJ official Uchida downplayed the impact of their potential monetary policy adjustments. Be sure to check out if it’s still a good play!
FOMC member Barkin favors patient approach when it comes to timing of rate cuts, suggests that recent uptick in inflation may be “head fake” in that a rebound in prices is due soon
While EUR/CAD hasn’t hit the halfway mark of its daily average volatility, the pair could still draw in buyers around the 1.4485 range support area that’s also close to the S1 (1.4480) Pivot Point line.
U.S. weekly initial jobless claims fell to 218K vs. 220K forecast
A few bullish candlesticks around EUR/CAD’s current levels (or a few pips lower) could draw in buyers during the event and hold EUR/CAD inside its week-long range.
