Kickstart the NA forex trading day with a technical look at the EURUSD, USDJPY and GBPUSD

In the kickstart video, I take a look at the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD – from a technical perspective to start the US trading day. The USD is largely unchanged as the final day of the week begins. THe biggest mover is the USDJPY which rose 0.34% despite better data in Japan. BOJ Ueda did discount the recent rise in inflation to cost-push factors that he expects will fade away. The EURUSD is down -0.11% (USD higher). The GBPUSD is unchanged.

A day after the ECB rate cut, ECB policymaker Madis Müller stated that it is realistic for inflation to approach 2% by mid-2025, with interest rates nearing a level where they no longer hinder investment. Meanwhile, fellow ECB member Olli Rehn expressed confidence that inflation will stabilize at the 2% target as projected, adding that monetary policy is expected to stop being restrictive in the spring or summer.

BOJ Governor Kazuo Ueda stated that underlying inflation remains slightly below 2%, with recent inflation mainly driven by cost-push factors expected to fade by mid-to-late 2025. As a result, the BOJ will maintain an accommodative policy to support price trends while acknowledging the economic impact of FX movements but not targeting them directly. Ueda reaffirmed that rate hikes will continue if economic conditions align with forecasts, emphasizing that markets understand the BOJ’s policy stance. Traders anticipate the next rate hike debate to take place in July, with the OIS market pricing in a ~72% probability of an increase.

Meanwhile, Tokyo’s core inflation rose to 2.5% in January, its fastest annual increase in nearly a year, surpassing the BOJ’s 2% target. The core CPI, which excludes fresh food, aligned with expectations after a 2.4% rise in December. This marks the third consecutive month of acceleration, matching last year’s peak in February.

There was a bit of a data dump in Japan with unemployment, industrial production and retail sales all being released with better/higher/stronger than expected results

• Tokyo Core CPI y/y: Actual 2.5%, Forecast 2.5%, Previous 2.4%.
• Unemployment Rate: Actual 2.4%, Forecast 2.5%, Previous 2.5%.
• Prelim Industrial Production m/m: Actual 0.3%, Forecast -0.1%, Previous -2.2%.
• Retail Sales y/y: Actual 3.7%, Forecast 3.4%, Previous 2.8%.

In the US debt market today, yields are moving modestly higher..

• 2 year yield 4.215%, +1.2 basis points
• 5 year yield 4.327%, +1.1 basis points
• 10 year yield 4.526%, +1 0 basis points
• 30 year yield 4.771% , +1.2 basis points

US stocks are trading higher in premarket trading implied by the futures

• Dow industrial average is trading up 133 points after risng 168.61 points or 0.38% yesterday
• S&P is trading up 27.19 points after rising 31.86 points or 0.83% yesterday
• Nasdaq is up 156 points after rising 49.42 points or 0.28% yesterday

for the trading week, the major indices are mixed coming into the day:

• Dow +1.03%
• S&P, -0.49%
• NASDAQ index -1.37%

With the premarket gains, the broader indices are chipping away at the declines

After the close yesterday, Apple reported earnings with EPS coming in at $2.40 vs $2.35 and revenues at $124.3B vs $124.12B est. Shares are trading higher by 3.96% in premarket trading. Visa beat and it’s shares are up 1.94%

US PCE data will be released at the bottom of the hour with the number crunchers expecting a 0.2% for the core reading and 2.8% year on year, while the headline is expected 0.3% and 2.6%. Personal income and personal spending is released with that data. Q4 employment costs are expected to rise by 0.9% versus 0.8% in the third quarter

Fed Bowman is expected to speak at 8:30 AM. There is no Q&A planned.

Pres. Trump tariff news will also be a focus. US Senior trade advisor Navarro on CNBC said that he has no breaking news provide are the tariffs. Yesterday Trump said that a 25% tariff will be imposed on Canada and Mexico imports (among others) but he was unsure of whether or not there would be a tariff on oil imports from Canada. He is posting “America first drug prices” on the Truth Social site.

Gold reached a another all-time high at $2807.76. The price is currently trading just below that at $2805.50.

Crude oil is trading up $0.10 and $72.83. Bitcoin is little changed at $104,834.

This article was written by Greg Michalowski at www.forexlive.com.