Markets await the key US data that are due out tomorrow as those will affect the decision of the Federal Reserve on interest rates. Players are increasingly nervous because the Fed could either continue its aggressive rate hikes, or take a pause after raising the rate to 1.02% in February. The latter will happen if the upcoming data indicates the worsening of the situation, especially in the area of the labor market.

Previously, it was the strong labor market that encouraged the Fed to declare an aggressive rate hike. However, recent media reports on massive job cuts in leading companies indicate that there will be a sharp decrease in the number of new jobs from this month onwards. This will have an effect on earnings and expenses, which will reinforce the lowering of inflationary pressures. In such a scenario, there would really be no reason for the Fed to continue its interest rate hike cycle.

That is why there is a low chance of a rise in dollar and Treasury yields, while there could be a surge in risk appetite. Of course, today, markets will still not have a definite direction as volatility will be quite high.

Forecasts for today:

AUD/USD

The pair rose above 0.7065, thanks to Australia's latest inflation data, which may encourage the RBA to raise interest rates further. A consolidation above this level could prompt a jump to 0.7260.

EUR/USD

The pair is trading below 1.0920. Positive economic data from Germany may push the pair to 1.1025 after a consolidation above this resistance level.