Concerns over the pound's upside potential as its rise shows no signs of stopping
04.10.2022
- Eurozone Producer Price Index
- Logan, U.S.: Remarks by the President of the Dallas Federal Reserve Bank
In yesterday’s U.S. trading session, the U.S. dollar fell after the September ISM Manufacturing PMI, released during U.S. trading hours, declined to 50.9 from the previous reading of 52.8. The USD/JPY pair touched 145.306 before reversing lower, dropping to 144.153. The decline halted as the pair found support at the 200-period SMA on the hourly chart.During today’s Asian session, the pair is attempting to rise, but since the RSI continues to show divergence on the daily chart, we will closely monitor whether the upside will be limited.
European currencies rose yesterday as the pound gained ground following the Truss administration’s withdrawal of a plan to lower the top income tax rate—one of its major tax cut proposals. The GBP/JPY pair rose from 160.560 to 163.869.During today’s Asian trading session, it has hit a new high, rising to 164.099. GBP/JPY has already gained more than 3.6 yen this week alone, but since the daily RSI has not reached 70 and there are no signs of overheating, it will be worth watching to see if it continues to rise.
Today, the Eurozone Producer Price Index will be released at 6:00 p.m. CET, and at 10:00 p.m. EST, Logan:, remarks by Williams, President of the New York Fed, at 22:15, remarks by Mester, President of the Cleveland Fed, at 22:15, U.S. Manufacturing Orders and the JOLTS report at 23:00, remarks by Lagarde, ECB President, at 24:00, and remarks by Daly, President of the San Francisco Fed, at 26:00.We should be wary of the upside potential for the pound, which shows no signs of stopping its rise.
Author: Keisuke Sakurai
