Market participants may be wary of the direction of the GBP/JPY pair, which is falling amid a strengthening yen

Market participants may be wary of the direction of the GBP/JPY pair, which is falling amid a trend of yen appreciation

06.10.2022

In the previous day’s U.S. currency trading, the EUR/USD pair fell back as the Dollar Index recovered to 111, dropping approximately 150 pips from 0.9994 to 0.9834.EUR/USD was pushed back at the upper boundary of the daily downtrend line, falling to the 75-period moving average (MA) on the 4-hour chart. However, on the daily chart, the pair has rebounded with the 20-period MA acting as support. We will be watching closely to see if the decline stops and the rebound continues.

In European trading, the GBP/JPY pair, which had been rising gradually along the 20-period moving average on the hourly chart, reversed course and fell. The pair dropped by approximately 3 yen, from 165.713 to 162.617. The decline halted as the pair found support at the downtrend line originating on June 9 of this year. With price action lacking a clear direction during today’s Asian session, we will be watching closely to see if economic data releases during European trading hours bring greater clarity to the market’s direction.

Today’s schedule includes German manufacturing orders at 3:00 PM, the UK construction PMI at 5:30 PM, Eurozone retail sales at 6:00 PM, the release of the ECB meeting minutes at 8:30 PM, U.S. initial jobless claims at 9:30 PM, remarks by U.S. Federal Reserve Bank of Cleveland President Mester at 9:50 PM,the Ivey PMI at 11:00 PM, U.S. weekly natural gas inventories at 11:30 PM, remarks by Bank of Canada Governor Macklem at 12:35 AM, remarks by Federal Reserve Governor Cook at 2:00 AM, remarks by Federal Reserve Governor Waller at 6:00 AM the following day, and remarks by Cleveland Fed President Mester at 7:30 AM the following day.I want to wait and see whether this will lead to a renewed trend of yen weakness and what direction the GBP/JPY pair will take.