Markets are again under strong pressure because of yesterday's statements by world central banks. Fed chief Jerome Powell said their committee is attempting a more moderate economic growth, so, if necessary, the bank will tighten further its monetary policy. St. Louis Fed President James Bullard echoed this rhetoric, even calling for a 0.75% rate hike.

Similarly, ECB President Christine Lagarde said they will take a more aggressive approach in interest rates, that is, a 0.50% rate increase instead of just 0.25%. This made everyone nervous, particularly the stock, commodity and currency markets.

Ahead is the release of inflation data in Germany, which should slowdown in monthly terms to 0.3% and stabilize in annual terms at around 7.9%. If the figure does not exceed expectations, EUR/USD will rise because market sentiment will shift to positive.

Likewise, stock markets will turn up if the upcoming reports on personal consumption expenditures, jobless claims and business activity in the US show an increase.

Forecasts for today:

EUR/USD

The pair is currently trading below 1.0470. If inflation in Germany does not exceed expectations and statistics from the US is positive, the quote will rise further to 1.0525 after overcoming 1.0470.

USD/JPY

The pair may drop to 134.60 after breaking 136.00. This, however, will only happen if positive market sentiment prevails today.