Market participants may be keeping a close eye on the euro’s movements as it declines amid worsening PMI data
24.06.2022
- Germany's Ifo Business Climate Index
- University of Michigan Consumer Sentiment Index
Yesterday, the U.S. dollar faced resistance due to a decline in the 10-year Treasury yield, leading to a drop against the yen and the pound. The USD/JPY pair fell by approximately 2 yen, from 136.171 to 134.265, breaking below the 200-period simple moving average (SMA) support on the hourly chart.During today’s Asian session, the pair has been consolidating around the 134.739 level. On the 4-hour chart, the RSI is falling toward 30, so we will be watching price action starting in the European session to see if the decline continues.
European currencies weakened more sharply than the U.S. dollar, plunging following yesterday’s PMI releases. The EUR/USD pair fell by approximately 100 pips from 1.0580 to 1.0483.Yesterday’s PMI releases showed declines from the previous readings for Germany, the Eurozone, and the UK. However, since the EUR/USD has entered a range-bound trading pattern on the 4-hour chart with a lower bound of 1.0466 and an upper bound of 1.0606, a wait-and-see approach seems advisable for the time being.
Today’s schedule includes UK retail sales at 3:00 PM Asia time, Turkey’s Economic Sentiment Index and Capacity Utilization at 4:00 PM Europe time, Germany’s Ifo Business Climate Index at 5:00 PM, remarks by RBA Governor Lowe at 8:30 PM, and U.S. Federal Reserve Governor Brainard:St. Louis Fed President, at 22:30 US time, remarks by UK MPC member Pill, at 22:45 remarks by UK MPC member Haskell, at 23:00 the US University of Michigan Consumer Sentiment Index, and US New Home Sales. We should remain vigilant regarding the euro’s movements, which have been declining due to worsening PMI data.
Author: Keisuke Sakurai
