Market Participants May Be Watching for Further Downside Potential in European Currencies, Which Have Been 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 U.S. currency market the previous day, the dollar strengthened as interest rates rose and the Dollar Index rebounded 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 SMA on the 4-hour chart.The EUR/USD pair has now fallen for two consecutive days. It broke below the daily 20-day moving average (MA) with a real body candle, and the pullback after touching the upper boundary of the downtrend line—which has been in place since February of this year—was pronounced. We will be closely monitoring the situation to see if the decline continues.
Among European currencies, the euro continued to fall against the yen, with the EUR/JPY pair dropping approximately 150 pips from 143.459 to 141.928.Although a slight rebound was seen during today’s Asian trading session, the pair remains below the 20-period moving average on the 4-hour chart, and with the 4-hour RSI showing a reversal near the 50 level, traders should remain cautious of a continued decline heading into the U.S. trading session.
Today, at 15:00: German industrial production, German retail sales, and UK Halifax house prices; at 15:45: Frenchtrade balance, at 19:25 UK BOE Deputy Governor Ramsden’s remarks, at 21:30 Canadian employment data and U.S. employment data, at 23:00 U.S. wholesale inventories and remarks by U.S. NY Fed President Williams, and at 24:00 U.S. Minneapolis Fed President Kashkari’sSpeech by Kashkari, President of the Minneapolis Fed; at 25:00, U.S. Speech by Bostic, President of the Atlanta Fed; and at 28:00, U.S. Consumer Credit Balance. We will be closely monitoring the downside potential for European currencies, which are currently trending toward a stronger yen.
Author: Keisuke Sakurai
