Market participants are likely keeping a close eye on the downside potential of European currencies, which are trending higher against the yen.
07.10.2022
- U.S. Employment Report
- Bostic (U.S.): Remarks by the President of the Atlanta Federal Reserve Bank
In the previous day’s U.S. currency trading, the dollar strengthened as interest rates rose and the Dollar Index recovered to 112.2. The EUR/USD pair fell by approximately 140 pips from 0.9925 to 0.9788. The decline occurred as the pair was capped by the 200-period simple moving average (SMA) on the 4-hour chart.EUR/USD has now fallen for two consecutive days. It broke below the daily 20-day moving average (MA) with a real body candle, and the rebound after touching the upper boundary of the downtrend line that has been in place since February of this year was pronounced. Therefore, we will be closely monitoring whether the decline continues.
Among European currencies, the euro continued to decline against the yen, with the EUR/JPY pair falling by approximately 150 pips from 143.459 to 141.928. Although a slight rebound was seen during today’s Asian session, the pair remains below the 20-period moving average on the 4-hour chart. With the 4-hour RSI showing a reversal near the 50 level, traders should remain cautious of further declines heading into the U.S. session.
Today’s schedule includes German industrial production and retail sales at 3:00 PM, UK Halifax house prices at 3:00 PM, French trade balance at 3:45 PM, remarks by UK BOE Deputy Governor Ramsden at 7:25 PM, Canadian and U.S. employment reports at 9:30 PM, U.S. wholesale inventories at 11:00 PM, and remarks by U.S. Federal Reserve Governor Williams:NY Fed President, at 12:00 AM: US Kashkari: Minneapolis Fed President remarks, at 1:00 AM: US Bostic: Atlanta Fed President remarks, and at 4:00 AM: US consumer credit balances. We will be closely monitoring the downside potential for European currencies, which are currently trending toward a stronger yen.
Author: Keisuke Sakurai
