The EURUSD is mired in a very narrow trading range awaiting the next shove. The USDJPY moved higher on comments from BOJ Ueda that food inflation was temporary and not a reason to tighten policy. However, the price has come back down in the European session after his chirping. The GBPUSD broke below the 100 bar MA on the 4-hour chart that stalled the falls over the last 2 trading days. The shift below that MA gives the sellers something to lean against and gives buyers some “cause-for- pause”. Traders look for more downside momentum, can use that MA as a barometer/risk defining level today.

In the above video, I outline these technical levels and more. Be aware. Be prepared as the US session begins.

On the economic calendar today:

US durable goods for February is expected to decline by -1.0% vs 3.1% last month. Ex Trans is expected at 0.2% vs 0.0% last month, while Nondefense cap ex-air is expected at 0.2% vs 0.8% last month.
The weekly oil inventory data is expected at 10:30 with crude stocks expected to show a drawdown of -0.956M vs 1.7545M last week. Gasoline is expected to show a drawdown of -1.83M vs -0.527M last week. Distilates are expect to show a draw of -1.568M. The private data released late yesterday showed:

U.S. MBA mortgage applications fell by 2.0% in the week ending 21 March 2025, a smaller drop compared to the prior week’s 6.2% decline. The decrease was mainly due to continued weakness in refinancing activity, as the refinance index dropped to 752.4 from 794.4. In contrast, purchase activity saw a slight uptick, with the purchase index rising to 155.8 from 154.7. The overall market index declined to 247.5 from 252.5. The average 30-year mortgage rate held relatively steady at 6.71%, just below the previous week’s 6.72%.

From central bankers today

European Central Bank policymaker Francois Villeroy de Galhau stated that a proposed 25% increase in U.S. tariffs—potentially enacted in Q2 under former President Trump—would likely have only a limited effect on euro area inflation. However, he warned that such tariffs could lead to a 0.3% decline in GDP for the region over the year. Villeroy criticized Trump’s approach as destabilizing to the multilateral system, posing risks to global financial stability and to climate initiatives. He labeled the strategy as “lose-lose,” noting it would also negatively affect the U.S. economy. With the 2 April tariff deadline approaching, the ECB’s next policy meeting remains uncertain.
Bank of Japan Governor Kazuo Ueda struck a cautiously optimistic tone in his remarks today, stating that Japan’s economy is recovering moderately despite some lingering weaknesses and is expected to continue growing above potential. He anticipates that underlying inflation will gradually accelerate toward the 2% target, though it remains somewhat below that level. Ueda emphasized that recent inflation has been driven largely by past import cost increases and rising food prices—factors he expects will gradually dissipate. He warned that temporary food inflation should not prompt a monetary policy response, but sustained price rises leading to broader inflation, particularly in services, may necessitate rate hikes.

Ueda affirmed that interest rates will be raised if economic and price conditions evolve in line with the Bank’s quarterly outlook, though Japan’s real interest rates remain deeply negative at around -2%. He reiterated the need for vigilance against faster-than-expected inflation and noted that the BoJ will base its decisions on a wide range of indicators rather than any single measure. A key consideration is whether wage growth—particularly around the 3% level—is sustained and broadens beyond large firms, which would support a more durable inflation trend.

He also addressed the BoJ’s ETF holdings, saying there is no immediate plan to offload them and that premature commentary on their future could have unintended market impacts. Ueda concluded by noting that if inflation risks overshoot expectations, the BoJ stands ready to take stronger action. While watching foreign exchange movements closely, he declined to comment on specific FX levels. His overall remarks weighed on the yen as markets interpreted them as dovish despite hints at future tightening.
Chicago Fed President Austan Goolsbee, in comments to the Financial Times, said the U.S. economy is moving into a new phase, departing from the “golden path” of the past two years. He acknowledged increased uncertainty, likening the current environment to having “a lot of dust in the air.” Goolsbee warned that if market-based long-run inflation expectations continue to drift higher, aligning more closely with household expectations, it would be a serious red flag. While he believes interest rates should be “a fair bit lower” over the next 12 to 18 months, he noted that economic uncertainty could delay the next rate cut. For now, he views a “wait and see” approach as appropriate, though he admits it carries its own risks.

On the US Fed speaker front:

Minneapolis Fed Pres. Kashkari will speak at 10 AM
St. Louis Fed Pres. Musalem will speak at 1:10 PM

Looking at snapshot of some of the current market levels to start the new trading day in the US, the US stock futures implying a mixed open:

Dow industrial average +19.5 points
S&P index -1.4 points
NASDAQ index -13.58 points

in the US debt market, the US treasury yields are higher

2 year yield 4.008%, +2.4 basis points
5-year yield 4.089%, +3.1 basis points
10 year yield 4.344%, +3.6 basis points
30 year yield 4.695%, +4.0 basis points

In other markets to start the US trading day:

Crude oil rose $0.58 or 0.84% at $69.58. Yesterday the price settled down modestly after four days of gains
Spot gold is trading up $7.93 or 0.25% at $3027.47.
Silver is trading little changed at $33.72
Bitcoin is trading up $457 and $87,895