Will the European currencies, which are showing signs of weakness, continue to fall?

Will the European currencies, which are showing signs of weakness, continue to fall?

01.11.2021

Last weekend, the three major U.S. stock indices all rose, resulting in a market environment characterized by higher stock prices, lower interest rates, and flat 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 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 euro/yen 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 16:00, Hong Kong’s third-quarter real GDP at 17:30, the Swiss SVME Purchasing Managers’ Index at 17:30, and GermanManufacturing PMI at 17:55, Eurozone Manufacturing PMI at 18:00, UK Manufacturing PMI at 18:30, Canada’s Leading Economic Index at 21:30, and the U.S. ISM Manufacturing Index and U.S. Construction Spending at 23:00.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.