Caution Over Price Movements During U.S. Trading Hours at the Start of the Month?
01.10.2021
- U.S. ISM Manufacturing Index
- University of Michigan Consumer Sentiment Index (U.S.)
In the New York market the previous day, the market saw falling stock prices, lower interest rates, and higher crude oil prices, leading to a widespread risk-off sentiment characterized by dollar selling and yen buying. The decline was particularly pronounced toward the close, with the U.S. dollar falling in tandem with the drop in stock prices.From a technical perspective, if the dollar continues to weaken, it could fall to around 110.917, which is near the 50% retracement level on the hourly chart. If a rebound occurs, the pair could target 111.33, which is near the 23.6% Fibonacci retracement level.However, since the RSI on the daily chart remains high at around 70, it would be prudent to remain cautious about further downside moves.
Today, German retail sales are scheduled for 3:00 p.m., the Turkish Manufacturing PMI for 4:00 p.m., the UK Manufacturing PMI for 5:30 p.m., the Eurozone Consumer Price Index [Preliminary] for 6:00 p.m.,at 9:30 PM, Canadian GDP, U.S. personal income, and the U.S. core PCE deflator; at 10:45 PM, the U.S. manufacturing PMI; at 11:00 PM, the U.S. ISM Manufacturing Index and the University of Michigan Consumer Sentiment Index; and at 12:00 AM, remarks by U.S. Federal Reserve Bank of Philadelphia President Harker;Remarks by Harker, President of the Federal Reserve Bank of Philadelphia; and at 26:00, remarks by Mester, President of the Federal Reserve Bank of Cleveland, are scheduled.
Since the USD/JPY formed a harami candle on yesterday’s daily chart—the last trading day of the month—we should remain cautious about price movements as traders close out positions this Friday, the first trading day of the month, and watch for further downside in the U.S. dollar.
Author: Keisuke Sakurai
