The Fed’s important man despatched the greenback surging throughout the board whereas risk-off flows dragged the Loonie down.

Will the BOC choice and the upcoming speech by Powell ship USD/CAD on one other leg larger?

Earlier than transferring on, ICYMI, yesterday’s watchlist checked out AUD/USD after the RBA’s dovish hike. You’ll want to take a look at if it’s nonetheless a legitimate play!

And now for the headlines that rocked the markets within the final buying and selling periods:

Recent Market Headlines & Financial Knowledge:

Fed head Powell: If financial knowledge warrants quicker tightening, they’re ready to extend the tempo of rate of interest hikes

Powell acknowledged that newest knowledge has been stronger than anticipated however famous that choices will nonetheless be on a per assembly foundation

U.S. 2-year bond yield rose greater than 10 foundation factors to maneuver above 5% whereas 10-year yield remained underneath 4%, leading to largest yield curve inversion in virtually 40 years

SNB Chairperson Jordan says that inflation remains to be above their worth stability goal, so they can’t rule out the opportunity of additional tightening

RBA Governor Lowe reiterated that they’re closing in on a degree the place they should cease mountain climbing, particularly if knowledge suggests a pause is warranted

Japanese present account surplus narrowed from 1.18 trillion JPY to 0.22 trillion JPY in February as a consequence of rising gas costs and weaker exports to China throughout Lunar New Yr

Japanese Economic system Watchers Sentiment index improved from 48.5 to 52.0 vs. 49.1 forecast in February, reflecting shift to optimism

German industrial manufacturing rebounded by 3.5% m/m in January vs. projected 1.4% improve, following earlier 2.4% slide

German retail gross sales slipped 0.9% m/m in January vs. estimated 2.3% acquire, earlier 4.9% slide

Value Motion Information

Overlay of USD Pairs 15-min

Fed Chairperson Powell‘s testimony rocked the markets when his remarks turned out waaay extra hawkish than many anticipated.

Not solely did he acknowledge that the newest set of financial figures has been stronger than anticipated, however he additionally stored the door open for extra aggressive tightening strikes (a.ok.a. a lot larger rates of interest) if knowledge retains comin’ in sizzling.

Consequently, the greenback surged throughout the board and left threat property like shares and commodities consuming mud. The Australian greenback was the weakest of the bunch, because the forex prolonged its slide when RBA head Lowe reiterated his dovish remarks.

ECB head Lagarde’s testimony at 10:00 am GMT
U.S. ADP non-farm employment change at 1:15 pm GMT
BOC rate of interest assertion at 3:00 pm GMT
Fed head Powell’s testimony at 3:00 pm GMT
JOLTS job openings at 3:00 pm GMT
Fed Beige E-book at 7:00 pm GMT
Chinese language CPI at 1:30 am GMT (Mar. 9)

Use our new Forex Warmth Map to rapidly see a visible overview of the foreign exchange market’s worth motion! 🔥 🗺️

Technical Chart of the Day: USD/CAD

USD/CAD 15-min Foreign exchange Chart by TradingView

It’s shaping as much as be a busy session for each the Buck and the Loonie because the BOC choice is occurring alongside one other speech by Fed head Powell!

Now the Canadian central financial institution already hinted that they’re planning on hitting the pause button with their price hikes for now, so we would hear some cautious remarks explaining their choice to face pat.

On the flip aspect, if Powell decides to repeat his hawkish views from his earlier speech AND main U.S. jobs indicators are available sturdy, we would see one other pop larger for USD/CAD.

The pair appears to be caught inside a bullish flag consolidation sample for now, as merchants are biting their nails to see how the upcoming catalysts would end up.

A break above at present’s highs at 1.3773 might be sufficient to sign continuation, which could take the pair up by its common day by day volatility of 89 pips and all the best way as much as the R2 of its Commonplace Pivot Factors.