We need to watch closely to see if 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 Consumer Price Index (CPI), released yesterday, fell to 6.5% from 7.1% the previous month. This signaled that inflation may have peaked, 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. Technically, the EUR/USD 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, and the weekly RSI has reversed near the 40 level. On the higher timeframe of 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 4:00 PM: UK Industrial Production, UK Trade Balance, UK Manufacturing Output, and Sweden’s Consumer Price Index; at 4:45 PM: France’s Consumer Price Index; at 7:00 PM: Eurozone Industrial Production and Eurozone Trade Balance; at 10:30 PM: US Import Price Index; and at 11:15 PM: US Federal Reserve’s Williams:Remarks by NY Fed President Williams, at 12:00 AM: US University of Michigan Consumer Sentiment Index and remarks by Kashkari, President of the Minneapolis Fed, at 12:20 AM: Remarks by Harker, President of the Philadelphia Fed, and at 1:00 AM: Russian Consumer Price Index. We want to carefully assess the direction to determine whether the downward momentum in cross-yen pairs will continue.
Author: Keisuke Sakurai
