All eyes are on whether the pound, which has been falling against the yen, will recover
26.01.2023
- U.S. Fourth-Quarter GDP
- Rice · Personal Consumption
In U.S. currency trading yesterday, the euro/dollar pair rose as the Dollar Index fell to 101.6. The euro/dollar pair climbed by just under 70 pips, from 1.0857 to 1.0923. Since the start of this week, the pair has continued to trade in a range near its highs. However, on the 4-hour chart, the 20-period moving average is acting as support at the lower end, causing the pair to rise slightly; therefore, it will be worth watching to see if the dollar’s weakness becomes apparent heading into the weekend.
European currencies saw the pound weaken against the yen after yesterday’s release of the UK’s December Producer Price Index (PPI) showed that input prices fell year-on-year to 16.5% from the previous reading of 18.0%, while output prices also unexpectedly dropped to 14.7%. The GBP/JPY pair fell by approximately 140 pips from 160.932 to 159.506.The pair temporarily dipped below the 200-period EMA on the hourly chart. However, on the daily chart, it is forming a triangle consolidation pattern with widening upper and lower boundaries, so caution is advised regarding the direction of the market during European trading hours.
Today’s schedule includes: Japan’s machine tool orders at 3:00 PM, South Africa’s Producer Price Index at 6:30 PM, the UK’s CBI Retail Trade Survey at 8:00 PM, U.S. initial jobless claims at 10:30 PM, U.S. fourth-quarter GDP, U.S. personal consumption,US Core PCE Deflator, US Durable Goods Orders, US Wholesale Inventories, US Chicago Fed National Activity Index, US New Home Sales at 12:00 AM, US Weekly Natural Gas Inventories at 12:30 AM, US Kansas City Fed Manufacturing Activity Index at 1:00 AM, and a US 7-Year Treasury Auction at 3:00 AM.We want to carefully assess whether the pound, which has been falling against the yen, will recover.
Author: Keisuke Sakurai
