All eyes are on whether the euro and the U.S. dollar, which have been trading in a range, will break out of it.

All eyes are on whether the euro and the U.S. dollar, which have been trading in a range, will break out of it.

20.12.2022

In U.S. trading the previous day, the Canadian dollar strengthened, with the CAD/JPY pair rising from 99.214 to 100.456. It tested the upside again in early Asian trading today, climbing as high as 100.750, but then fell back during today’s Bank of Japan Monetary Policy Meeting.It fell by approximately 3.5 yen to 97.301. From a technical perspective, the CAD/JPY pair has been observed falling toward the monthly 20-day moving average (MA), and since the Bollinger Bands have not yet reached -3σ—indicating there is still room to move—investors should be cautious of a potential decline following a period of consolidation.

Among European currencies, the euro traded sideways against the U.S. dollar. The EUR/USD pair has been trading in a range between 1.0576 and 1.0657, with both the lower and upper bounds of the range narrowing slightly.On the 4-hour chart, the EUR/USD pair is seeking direction with the 20-period moving average (MA) serving as the central line; therefore, we should expect the current range to persist until the release of the University of Michigan Consumer Sentiment Index later this week.

Today, at 16:00, South Africa’s Leading Index, Germany’s Producer Price Index, Switzerland’s Trade Balance, and Turkey’s Consumer Confidence Index will be released; at 17:30, Hong Kong’s Consumer Price Index; at 18:00, the Philippines’ Industrial Production, the Philippines’ Producer Price Index, and the Eurozone’s Current Account Balance;at 9:00 p.m., Mexico’s Retail Sales; and at 10:30 p.m., Canada’s Retail Sales, U.S. Housing Starts, and U.S. Building Permits. We will be watching closely to see if the euro and the U.S. dollar, which have been trading in a tight range, will break out of this range.