Should investors be wary of the direction of cross-yen pairs, given the pronounced trend of yen selling?
06.12.2022
- Canada's Trade Balance
- Canada-Ivey Purchasing Managers' Index
In yesterday’s U.S. currency markets, the U.S. dollar emerged as the strongest currency after the November ISM Non-Manufacturing PMI, released yesterday, came in at 56.5, exceeding the market forecast of 53.4. The EUR/USD pair fell by approximately 110 pips from 1.0594 to 1.0481. This decline followed the pair’s rise to a five-month high.Since the EUR/USD has firmly broken above the 200-day SMA on the daily chart, we should watch for a technical correction and a pullback over the coming days.
Among European currencies, the euro rose sharply against the yen. It climbed approximately 2.1 yen, from 141.430 to 143.606.After consolidating just above the 200-period simple moving average (SMA) on the hourly chart, the EUR/JPY broke through the resistance without pulling back, touching 143.919. It then rebounded up to the 75-period SMA on the 4-hour chart. Since the EUR/JPY is currently rising from the lower boundary to the upper boundary of a downtrend line, we will be watching closely to see if the rebound continues up to the upper boundary of the trend line, around the 145 yen level.
Today’s schedule includes German manufacturing orders at 16:00 CET, the Norwegian Regional Network Survey at 18:00, the UK Construction PMI and South Africa’s Q3 GDP at 18:30, New Zealand dairy prices and Mexico’s total fixed capital formation at 21:00, and the U.S. trade balance and Canada’s trade balance at 22:30 EST.and at 12:00 AM, the Canadian Ivey PMI. We should remain cautious regarding the direction of cross-yen pairs, where the trend toward yen selling is particularly pronounced.
Author: Keisuke Sakurai
