Should we wait and see how the cross-yen pairs perform after opening with a gap up?
06.02.2023
- UK Construction PMI
- German Manufacturing Orders
Last weekend, the U.S. dollar surged as the January U.S. employment report exceeded market expectations.The EUR/USD pair fell by approximately 150 pips from 1.0940 to 1.0780. The decline came after the pair broke significantly below the 200-period simple moving average (SMA) on the hourly chart. However, on the higher timeframe 4-hour chart, the 200-period SMA is acting as support, and the uptrend that began on November 3 of last year remains intact. The daily RSI has shifted from its previous position near the 70 line, and it will be worth watching to see if the pair enters a downtrend.
European currencies saw the pound rise against the yen after the UK non-manufacturing PMI, released last weekend, rose to 48.7 from the previous reading of 48.0. The GBP/JPY pair climbed to 159.408, breaking above the 20-period moving average on the 4-hour chart. On the daily chart, the pair appears to be entering the final stage of a triple bottom formation, so we will be closely monitoring price movements this week.
Today, during European trading hours, German manufacturing orders will be released at 16:00, Hungarian retail sales at 16:30, remarks by a member of the Bank of England’s Monetary Policy Committee (MPC) at 17:40, the UK Construction PMI and the Eurozone Investor Sentiment Index at 18:30, Eurozone retail sales at 19:00,at 8:00 PM, the Canadian Leading Economic Index; and during U.S. trading hours, at 12:00 AM, the Canadian Ivey PMI; at 1:30 AM, the U.S. 6-month Treasury bill auction; and at 2:00 AM, remarks by UK MPC member Pill. We intend to carefully monitor the movement of cross-yen pairs, which opened with a gap up.
Author: Keisuke Sakurai
