Should We Keep an Eye on the Upside Potential for the Euro/Yen, Which Has Reached Levels Not Seen Since the Lehman Shock?
23.06.2023
- UK Retail Sales
- European Manufacturing/Services PMI
In U.S. currency trading yesterday, the U.S. dollar rose against the yen after the U.S. May existing home sales figure, released yesterday, came in at 4.3 million—exceeding the market forecast of 4.2 million. The USD/JPY pair rose by just under 170 pips, from 141.162 to 143.238.Combined with hawkish remarks from Federal Reserve Chair Powell—which followed those made the day before yesterday—the pair hit a new high for the year. During today’s Asian trading session, USD/JPY touched 143.407. We will be closely monitoring the market to see if this upward trend continues.
European currencies rose against the yen as the Eurozone’s June consumer confidence index, released yesterday, improved to -16.1 from the previous reading of -17.4. The euro/yen pair rose by approximately 130 pips, from 155.595 to 156.930.This marks a rise to levels not seen since September 2008. While the RSI on the 4-hour chart has exceeded 70 and shows signs of divergence, the RSI on the weekly chart has not yet reached its recent high of 78, leaving some room to maneuver. Therefore, it will be important to monitor whether the upward momentum continues during U.S. trading hours.
Today’s schedule includes UK retail sales at 3:00 p.m., Turkey’s trade balance at 4:00 p.m.,Turkey’s Economic Confidence, remarks by ECB President Lagarde, France’s Manufacturing/Services PMI at 4:15 p.m., Germany’s Manufacturing/Services PMI at 4:30 p.m., the Eurozone’s Manufacturing/Services PMI at 5:00 p.m., the UK’smanufacturing/services PMI at 5:00 p.m., remarks by U.S. St. Louis Fed President Bullard at 6:15 p.m., U.S. manufacturing/services PMI at 10:45 p.m., and remarks by U.S. Cleveland Fed President Mester at 2:40 a.m.We’ll be watching for further upside potential in the euro/yen pair, which has reached levels not seen since the Lehman Shock.
Author: Keisuke Sakurai
