Should we be wary of whether the downward momentum in cross-yen pairs will continue?
13.01.2023
- Harker (U.S.): Remarks by the President of the Federal Reserve Bank of Philadelphia
- France: Consumer Price Index
In the U.S. currency market yesterday, the U.S. dollar became the weakest currency as the December U.S. Consumer Price Index (CPI), released yesterday, fell to 6.5% from 7.1% the previous month, signaling that inflation may have peaked and leading to expectations that the Federal Open Market Committee (FOMC) will reduce the magnitude of interest rate hikes at its meeting next month.The EUR/USD pair rose from 1.0731 to 1.0863. It hit a new high for the year and broke above the weekly 75-day moving average (MA), which had been acting as resistance. From a technical perspective, the EUR/USD pair is rising with support from the weekly 10-day MA, so we should watch for a rally following a period of consolidation.
Among European currencies, the Swiss franc saw the sharpest decline against the yen, with the CHF/JPY pair falling from 142.192 to 139.028. Following yesterday’s decline, the CHF/JPY pair has entered a downtrend along the weekly 20-day moving average (MA), and the weekly RSI has reversed near the 40 level.On the higher timeframe—the monthly chart—the pair is trading below the 10-day moving average, so we need to assess the direction to determine whether the franc’s weakness will continue.
Today, at 16:00: UK Industrial Production, UK Trade Balance, UK Manufacturing Output, and Sweden’s Consumer Price Index; at 16:45: France’s Consumer Price Index; and at 19:00: EurozoneIndustrial Production, and the Eurozone Trade Balance; at 22:30, the U.S. Import Price Index; at 23:15, remarks by U.S. Federal Reserve Bank of New York President Williams; at 24:00, the U.S. University of Michigan Consumer Sentiment Index; remarks by U.S. Federal Reserve Bank of Minneapolis President Kashkari;Minneapolis Fed President, at 24:20: U.S. remarks by Harker, President of the Philadelphia Fed, and at 25:00: Russia’s Consumer Price Index. I want to carefully assess the direction to determine whether the downward momentum in cross-yen pairs will continue.
Author: Keisuke Sakurai
