With the PPI hitting a record high, all eyes are on the direction of the euro

With the PPI hitting a record high, all eyes are on the direction of the euro

05.10.2022

In yesterday's U.S. currency trading, the U.S. dollar faced resistance as the yield on the 10-year Treasury note fell to 3.62%, causing the EUR/USD pair to rise by just under 200 pips from 0.9806 to 0.9999.Following yesterday’s sharp rise, the EUR/USD broke above the 200-period simple moving average (SMA) on the 4-hour chart with a real body candle and reached the upper boundary of the downtrend line on the daily chart that has been in place since February of this year. We will be watching to see if it breaks above parity on the daily chart in the near future.

European currencies saw the euro emerge as the strongest currency during U.S. trading hours after the August Eurozone Producer Price Index (PPI), released yesterday, hit a record high, rising to 43.3% year-on-year from 37.9% the previous month. The euro/yen pair rose by more than 2 yen, climbing from 141.940 to 144.078.Yesterday’s rally pushed the euro/yen pair to the high levels seen on September 20. Since the 4-hour RSI has signaled a reversal, we will be watching closely to see if the upward trend continues.

Today, during Asian trading hours, Germany’s trade balance will be released at 15:00, followed by France’s industrial production and manufacturing production index at 15:45. During European trading hours, France’s services PMI will be released at 16:50,at 16:55 German Services PMI, at 17:00 Eurozone Services PMI, at 17:30 UK Services PMI, at 20:00 US MBA Mortgage Applications Index, at 21:15 US ADP National Employment Report, at 21:30 US time Canadian Trade Balance, US Trade Balance,22:45 US Services PMI, 23:00 US ISM Non-Manufacturing PMI, 23:30 US Weekly Crude Oil Inventories, and 29:00 remarks by Bostic, President of the Atlanta Fed. We will be watching the direction of the euro, which is rising as the PPI hits a record high.