Forex Volatility Expected After Major Market Reports
After the release of the Royal Bank of Australia’s policy minutes on Monday night signaling a rate increase may be on the horizon, the Australian Dollar rose over 1%. On Wednesday night, at 9:30 pm New York time the Australian Employment Change numbers and Unemployment rate will be announced. With the hawkish minutes, all eyes will be on these reports to ensure that the rate increase is still on track.
Both the daily and 60 minute AUDUSD charts are overextended to the upside but the uptrend is still intact. This means that we may likely see a retracement prior to the reports. I would look for the 60 minute ATR at around .7850 to act as support for a continuation of the upmove.
Additionally, late Wednesday night into early Thursday morning the Bank of Japan will release its Monetary Policy Statement, Outlook Report, Policy Rate and Press Conference. The daily USDJPY chart shows that the USDJPY has broken throught the ATR support level at 112.40 and will more than likely test the new ATR, which will probably be around 113.50 or 114. If this test occurs, we could see the USDJPY begin to fall.
Then on Thursday morning, the Euro Minimum Bid Rate followed by the ECB Press Conference will be held. All eyes are on the ECB President Draghi to indications on how he will implement unwinding the record stimulus that was implemented after the global financial crisis. Although currently both the daily and 60 minute charts indicate that the EURUSD will continue up, the ECB Press Conference can either fuel the EURUSD into higher ground or create the EURUSD to fall, depending on the clues that ECB President Draghi provides during his press conference.