RBNZ could hint that they are looking for further easing amidst escalation of the US-China trade war. NZD/JPY could fall further.
With risk sentiment shifting towards risk-off, a stronger NFP will only provide a better short entry. USD/JPY could break critical support at the 106.80 price level.
As Fed’s cut is most likely a preventive move and insurance against risk, Fed may not open doors for additional easing. USD/JPY could fall initially after rate cut is announced before rising.
Despite the increase in the probability of a cut tonight, Draghi may change his forward guidance while keeping rates unchanged. EUR/USD may rise higher as market may start to price in Fed’s cut later this month.
Both Powell’s testimony and Bank of Canada’s monetary policy announcement are happening tonight. We should expect huge volatility in USD/CAD.