All eyes are on whether the resurgent yen-buying trend will continue during U.S. trading hours
01.11.2022
- Rice · Manufacturing PMI
- MIS Manufacturing Index
In the previous day’s trading, the U.S. dollar showed strength against both the yen and the euro, while the euro/dollar pair fell for the third consecutive day. The euro/dollar pair dropped by just over 90 pips from 0.9965 to 0.9873, breaking below the 200-period SMA on the hourly chart.Although the pair attempted a rebound during today’s Asian session, it was capped by the 200 SMA and has since reverted to a downward trend. If the euro continues to face resistance during the U.S. session, the decline could extend toward the retest level around 0.9834, so traders should be cautious about chasing the downside.
European currencies came under selling pressure as the Eurozone’s October consumer price index, released yesterday, came in at 10.7% year-over-year, indicating that the CPI had not yet peaked. The EUR/JPY pair traded in a range-bound pattern, fluctuating wildly between 146.617 and 147.745. Since the EUR/JPY is facing significantly stronger resistance compared to the GBP/JPY—another European currency pair—traders should be cautious of potential declines during European trading hours.
Today’s schedule includes the UK Nationwide House Price Index, Turkey’s Manufacturing PMI, and Germany’s Import Price Index at 16:00 European time; remarks by RBA Governor Lowe at 17:20; Switzerland’s Manufacturing PMI at 17:30; and the UK Manufacturing PMI at 18:30. During U.S. trading hours, the U.S. Manufacturing PMI is scheduled for 22:45,at 11:00 PM, the U.S. ISM Manufacturing Index, U.S. Construction Spending, and U.S. JOLTS Survey, and at 5:00 AM, the RBNZ Financial Stability Report. We will be watching to see if the recent trend of yen buying continues into U.S. trading hours.
Author: Keisuke Sakurai
