The Asian session does not bring a change in the market balance of power. EUR/USD is close to 1.22. GBP/USD is at 1.39. Volatility on the market is low.The US Dollar remains strong after yesterday's Powell speech before the US Congress. Stock markets are reversing downwards: Wall Street is more than 1.0% down already, and SP500 futures are again under 2,750 points.
On Wednesday 28th of February, the event calendar is busy with the important news releases, so the global investors should keep an eye on PMI Manufacturing data from China, GfK Consumer Climate, Unemployment Rate and Unemployment Change data from Germany, French GDP, and Consumer Spending data, KOF Economic Barometer data from Switzerland, Consumer Price Index data from the Eurozone. During the US session, Canada will post Raw Materials Price Index data and the US will present GDP Second Release, GDP Price Index, Chicago Purchasing Manager Index and Pending Home Sales data.
USD/JPY analysis for 28/02/2018:
The biggest overnight price movement on the market is the strengthening of the yen, which moved 50 pips off the night highs as a consequence of the Bank of Japan decision to limit the purchase of Treasury bonds at the long end of the yield curve. Such a step should not be considered in terms of the announcement of abandoning the ultra-soft monetary policy, but it still triggered a market reaction. Just recently, the Bank of Japan Governor Kuroda reassured the global investors that the BoJ will maintain the ultra-loose monetary policy as the inflation is still well below the BoJ target of 2.0%.
Let's now take a look at the USD/JPY technical picture at the H4 time frame. The market bounced from the level of 106.41 and tried to rally towards the recent local high at the level of 107.90, but so far it made only a high at the level of 107.68. If bulls want to gain the control over this market, then they must break out above the technical resistance zone located between the levels of 108.10 - 108.43. Otherwise, the downtrend might continue or the market might start to consolidate in a horizontal zone.
