With the PPI hitting a record high, all eyes are on the direction of the euro
05.10.2022
- U.S. ISM Non-Manufacturing Purchasing Managers' Index
- Bostic (U.S.): Remarks by the President of the Atlanta Federal Reserve Bank
In the U.S. currency market the previous day, the U.S. dollar faced resistance as the yield on the 10-year U.S. 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 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 European Union’s August Producer Price Index (PPI), released yesterday, hit a record high, rising to 43.3% year-over-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 reached 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, Germany’s services PMI at 16:55, and the Eurozone’s services PMI at 17:00,at 17:30 the UK Services PMI, at 20:00 the US MBA Mortgage Applications Index, at 21:15 the US ADP National Employment Report, at 21:30 US time the Canadian trade balance and the US trade balance,at 22:45, the U.S. Services PMI; at 23:00, the U.S. ISM Non-Manufacturing Index; at 23:30, U.S. weekly crude oil inventories; and at 29:00, remarks by Bostic, President of the Atlanta Fed, are scheduled.We’ll be watching the direction of the euro as the PPI hits a record high and continues to rise.
Author: Keisuke Sakurai
