Markets are likely to keep a close eye on the euro’s movements following the decline in Germany’s PPI, which posted its lowest growth rate since January 2021

Markets are likely to keep a close eye on the euro’s movements following the decline in Germany’s PPI, which posted its lowest growth rate since January 2021

21.06.2023

In the U.S. currency market yesterday, the U.S. dollar rose against the euro after the U.S. May housing permits report, released yesterday, showed an increase from 1.41 million in the previous month to 1.49 million.The EUR/USD pair fell by just over 50 pips from 1.0946 to 1.0892. It briefly dipped below the 20-period moving average on the 4-hour chart. The EUR/USD is forming an ascending wedge on the daily chart, with both the upper and lower boundaries narrowing; therefore, we should remain vigilant for the possibility of increased price volatility during U.S. trading hours.

European currencies fell against the yen as Germany’s May Producer Price Index (PPI), released yesterday, dropped sharply year-over-year from the previous reading of 4.1% to 1.0%.The EUR/JPY pair fell by approximately 130 pips from 155.379 to 154.040, breaking below the 75-period moving average (MA) on the hourly chart. On the higher-timeframe 4-hour chart, the pair found support at the 20-period MA, halting its decline. Since it avoided touching the 23.6% Fibonacci retracement level based on the recent low, attention will be focused on whether the euro recovers during European trading hours.

Today, at 3:00 PM, UK Consumer Price Index, UK Producer Price Index, and UK Retail Price Index; at 4:00 PM, Turkey Capacity Utilization Rate; at 5:00 PM, South Africa Consumer Price Index; at 5:30 PM, Hong Kong Current Account Balance; at 8:00 PM, US MBA Mortgage Applications Index; at 9:30 PM, Canada Retail Sales;at 10:45 PM, remarks by German Bundesbank President Nagel; at 11:00 PM, congressional testimony by Fed Chair Powell, Fed Governor Cook, and Fed Governor Jefferson; and at 2:00 AM, a U.S. 20-year Treasury auction.We will closely monitor the euro’s movements following the decline in German PPI, which showed the lowest growth since January 2021.