Will the decline in European currencies, which are currently showing signs of weakness, continue?

Will the decline in European currencies, which are currently showing signs of weakness, continue?

01.11.2021

Last weekend, the three major U.S. stock indices all rose, resulting in a market environment characterized by rising stock prices, falling interest rates, and stable crude oil prices.The U.S. September PCE deflator, released over the weekend, came in at 4.4%, in line with market expectations, marking the highest growth rate in 30 years. Although concerns about inflation have not been dispelled, the impact on the markets was limited.

With no notable gaps in the foreign exchange market, cross-yen pairs have been trading sideways during today’s Asian session. European currencies, in particular, have been weak, with the euro/yen falling from 132.93 to 131.61.From a technical perspective, the EUR/JPY has found support at the 20-day moving average (MA) on the daily chart, halting its decline for the past three days or so. We need to carefully assess whether it can hold the 20-day MA support level around 131.57.

Today’s economic indicators include German retail sales at 4:00 p.m., Hong Kong’s third-quarter real GDP at 5:30 p.m., the Swiss SVME Purchasing Managers’ Index at 5:30 p.m., and GermanManufacturing PMI at 5:55 p.m., Eurozone Manufacturing PMI at 6:00 p.m., UK Manufacturing PMI at 6:30 p.m., Canada’s Leading Economic Index at 9:30 p.m., and the U.S. ISM Manufacturing Index and U.S. Construction Spending at 11:00 p.m.This week is packed with events, starting with the U.S. FOMC meeting on Wednesday, the 3rd, followed by policy rate announcements from Australia and the UK, and ending with the U.S. employment report on Friday, the 5th. We will closely monitor these economic indicators to assess currency strength and weakness.