Forex fundamental analysis

A review of last week's important events 

Last week, the forex market analysts' and traders' eyes were on the US inflation data (CPI). As mentioned last week, the market participants' expectation was for disinflation continuation, and according to the expectations the data was released within the forcasts' range. Therefore, with disinflation and moving away from the peak, market participants increased the possibility of a 25% increase in interest rates in the Federal Reserve's next meeting. As a result, the US dollar weakened in related symbols. In a way that the dollar index (DXY) reached 102 units and symbols such as gold, stock market index, EURUSD currency pairs, etc., which have a negative correlation with the dollar, rose.

The economic calendar review from January 16 to 20

In this week's economic calendar review, the significant data and events are respectively related to JPY, GBP, USD, CAD, and CNY, which we will discuss further.

This week, the Japanese yen will be under the supervision of market participants due to the important data and events; it seems to have good volatility too. In the last few months, the Japanese yen had very high fluctuations, so the USDJPY currency pair rose from 110 to almost 150 and is currently trading at 128. During this period, the JPY had become so weak that Japan's central bank had to enter the forex market at high costs and strengthen the JPY.

On Wednesday at 03 am UTC, the annual BOJ outlook report on Japan's future economic outlook and the central bank's interest rate determination will be released. Note that market participants do not expect an interest rate increase. And any interest rate increase from -0.1% to zero or positive numbers can make the JPY extremely strong. At 05 am, there will be a BOJ press conference, where significant points are given. So far, the BOJ has continued its expansionary policies and faced contractionary policies and interest rate increases, so this time it's possible that contractionary points will be presented in the press conference. In the case of providing contractionary points, we can hope for the JPY to strengthen in the long term.

On Thursday at 11:30 pm, the annual core consumer price index (previously: 7.3% | forecast: 4%) will release. Considering that Japan's inflation, unlike other countries, remained at a low level and has recently started to grow, it will be under the traders' observation. The inflation growth, which represents the BOJ contractionary policy, can strengthen the JPY.