Should investors be wary of further downside potential in the EUR/JPY pair, where divergence is occurring?
20.02.2023
- Eurozone Consumer Price Index
- Remarks by Mr. Woods, Deputy Governor of the Bank of England
Last weekend, the U.S. dollar traded in a tight range against the euro, with the EUR/USD pair fluctuating between 1.0612 and 1.0698. The EUR/USD has reached the upper boundary of its 4-hour downtrend and faces resistance from the daily 10-day moving average. However, since the daily 75-day moving average provided support and triggered a rebound, it will be worth watching whether the EUR/USD rises this week.
European currencies faced resistance as the euro struggled to gain ground following the release of Germany’s January Producer Price Index (PPI) on Friday, which came in at 17.8% year-over-year, down from 21.6% the previous month.EUR/JPY traded in a range between 143.021 and 143.674, with the RSI showing divergence on the 4-hour chart. On the weekly chart, EUR/JPY is beginning to form a triple top pattern, so traders should be wary of a decline during European trading hours.
Today, at 4:00 p.m. CET, Sweden’s Consumer Price Index and Turkey’s Consumer Confidence Index will be released; at 5:20 p.m., Taiwan’s fourth-quarter current account balance;at 6:00 PM Philippine Industrial Production and Producer Price Index, at 7:00 PM Eurozone Construction Output, at 11:00 PM U.S. time Israel’s Policy Rate, at 12:00 AM Eurozone Consumer Price Index, and at 4:00 AM UK Deputy Governor Woods of the BOE is scheduled to speak. We should remain vigilant regarding the downside potential in the EUR/JPY pair, where divergence is occurring.
Author: Keisuke Sakurai
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