A sense of tension and anticipation gripped financial markets on Wednesday as investors digested new inflation readings ahead of the US Federal Reserve’s monetary policy decision.

Watch this space as the GBPUSD could enter into the holiday season with a bang!

Later this week, investors will be served a super combo of top-tier economic data and central bank meetings featuring not only the Federal Reserve (Fed) but European Central Bank (ECB) and Bank of England (BoE). With so much going on over the next few days, volatility could be the name across currency, commodity, and equity markets.

Some of the world’s largest central banks are about to make their final rate decisions of the year, while offering their updated policy outlooks for 2023.

Throw into that mix: the latest inflation data out of major economies such as the US and the UK.

All that could make for some spicy market action!

The USDJPY currency pair (nickname “the Yen”) on the H4 time frame was in a downtrend until 2 December, when a last lower bottom was recorded at 133.611.

The mood across financial markets turned gloomy on Wednesday as disappointing data from China fuelled fears about slowing global economic growth.

Asian shares were under attack on Tuesday, following the negative cues from Wall Street overnight as unexpectedly strong US data revived expectations of the Fed raising rates more than expected.

This could be a wild week for the USDCAD due to the Bank of Canada’s (BoC) rate decision on Wednesday.

A sense of tension can already be felt when observing the currency pair which remains wedged within a small range on the hourly timeframe. The USDCAD’s choppy price action and indecision are likely based on last Friday’s jobs report from both the United States and Canada which sent prices on a mini rollercoaster ride.

Fasten your seatbelts because the next few days could be wild for oil markets.

The global commodity may be injected with fresh volatility due to not only the OPEC+ meeting but developments revolving around European Union sanctions on Russian oil. Other factors like geopolitical risks, economic data and overall sentiment may play an important role in shaping the global commodities outlook for the rest of 2022.

The S&P 500 was in a downtrend until a lower bottom formed on 13 October.  Bulls found the price attractive at those levels and the momentum in the market started shifting. 

A closer look at the Momentum Oscillator reveals positive divergence between points “a” and “b” when comparing the bottoms at 3559.0 and 3492.4. This could have alerted technical traders that the current trend might be losing steam. 

A strong sense of anticipation gripped financial markets on Wednesday as investors awaited a speech by Federal Reserve Chair Jerome Powell later in the day.

European shares and US equity futures climbed, while the dollar weakened as market players closely observed the developments in China. The prospects of the world’s second-largest economy loosening its Covid zero policy have boosted sentiment, stimulating risk appetite ahead of a series of key speeches and top-tier economic releases.