All eyes are on whether the rising pound will enter a corrective decline
21.11.2022
- Germany: Producer Price Index
- Remarks by Nagel, President of the German Central Bank
Last weekend, the Canadian dollar was the weakest currency against the US dollar from European trading hours through to US trading hours. The CAD/JPY pair fell by approximately 100 pips from 105.416 to 104.339.A descending triangle is forming on the 4-hour chart, with the upper boundary gradually lowering. If this downward trend continues into U.S. trading hours, there is a risk of breaking below the current support level at 104.353, so caution is advised regarding further downside potential.
Among European currencies, the pound, which had been showing strength against the U.S. dollar, consolidated near the upper boundary of its uptrend line. GBP/USD traded within a range of 1.1854–1.1948 as it sought direction, fluctuating above and below the 20-period moving average (MA) on the hourly chart throughout the day.During today’s Asian session, the pair broke below the hourly 20-MA and fell to 1.1845. Since GBP/USD is also breaking below the 20-MA on the 4-hour chart, we will be watching closely to see if it falls to the recent 4-hour low of 1.1764.
Today, during European trading hours, the German Producer Price Index and Sweden’s Capacity Utilization Rate will be released at 16:00; Turkey’s Foreign Visitor Arrivals at 17:00; Hong Kong’s Consumer Price Index at 17:30; and the UK’sremarks by BOE Deputy Governor Kanliff, followed by the US Chicago Fed National Activity Index at 22:30 US time, Turkey’s central government debt at 23:30, the US 2-year Treasury auction at 25:30, remarks by German Bundesbank President Nagel at 26:30, and the US 5-year Treasury auction at 27:00.We will be watching closely to see if the pound, which had been rising, will enter a corrective decline.
Author: Keisuke Sakurai
