Should investors be wary of further downside potential in the EUR/JPY pair, where a divergence is occurring?
20.02.2023
- European Consumer Price Index
- Remarks by BOE Deputy Governor Woods
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 is now facing 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 interesting to see if the EUR/USD rises this week.
The euro faced resistance as Germany’s January Producer Price Index (PPI), released last Friday, 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 take on the appearance of a triple top, 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, the Philippines’ Industrial Production and Producer Price Index; at 7:00 PM, the Eurozone’s Construction Output; at 11:00 PM (U.S. time), Israel’s Policy Rate; at 12:00 AM, the Eurozone’s Consumer Price Index; and at 4:00 AM, remarks by Woods, Deputy Governor of the Bank of England. We should remain cautious about the downside potential in the EUR/JPY pair, where divergence is occurring.
Author: Keisuke Sakurai
