All eyes are on whether the resurgent trend of yen buying will continue during U.S. trading hours.

All eyes are on whether the resurgent trend of yen buying will continue during U.S. trading hours.

01.11.2022

In the previous day’s U.S. trading session, 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.During today’s Asian session, the pair attempted a rebound but was capped by the 200 SMA, causing it to revert to a downward trend. If the euro continues to face resistance during the U.S. session, the decline could extend to the retest level around 0.9834; therefore, traders should remain cautious about further downside moves.

European currencies came under selling pressure as the euro, following yesterday’s release of the Eurozone’s October Consumer Price Index—which came in at 10.7% year-over-year—showed no signs of peaking. The euro/yen pair traded in a choppy range, fluctuating wildly between 146.617 and 147.745.Since the euro/yen pair is facing significantly heavier resistance on the upside compared to the pound/yen—another European currency pair—traders should be cautious of potential declines during European trading hours.

Today, at 16:00 CET, the UK Nationwide House Price Index, Turkey’s Manufacturing PMI, and Germany’s Import Price Index will be released; at 17:20, RBA Governor Lowe will deliver remarks; at 17:30, Switzerland’s Manufacturing PMI will be released;at 18:30, the UK Manufacturing PMI; during U.S. trading hours, at 22:45, the U.S. Manufacturing PMI; at 23:00, the U.S. ISM Manufacturing Index, U.S. Construction Spending, and the U.S. JOLTS Survey; and at 29:00, the release of the RBNZ Financial Stability Report.It will be interesting to see if the recent trend of yen buying, which has been gaining momentum, continues into U.S. trading hours.