With the ECB meeting just two days away, investors may be wary of how much further the euro could fall

With the ECB meeting just two days away, investors may be wary of how much further the euro could fall

25.07.2023

In U.S. currency trading the previous day, the U.S. dollar fell against the yen after the U.S. July PMI (Purchasing Managers’ Index) was released during U.S. trading hours and showed a decline from 53.2 the previous month to 52.0. The USD/JPY pair fell from 141.813 to 140.740.Although the pair had been trading above the 20-period moving average (MA) on the hourly chart, the decline caused it to fall below the 20-MA. However, as we are seeing an upward move during today’s Asian session, we will wait and see how the pair performs during U.S. trading hours.

European currencies saw the euro fall sharply against the yen after yesterday’s release of the July Eurozone PMI showed declines in both the services and manufacturing sectors compared to the previous month. The euro/yen pair fell from 157.778 to 157.245, breaking well below the 20-period moving average (MA) on the 4-hour chart.As the euro/yen pair remains below the 20-period moving average on the 4-hour chart during today’s Asian trading session, we will be closely monitoring whether the euro continues to weaken ahead of the ECB meeting scheduled for the day after tomorrow.

Today, the Norwegian Mining Confidence Index will be released at 14:00 Asia time, followed by the Swedish Producer Price Index at 15:00. During European trading hours, the Turkish Economic Sentiment Index and Turkish Capacity Utilization Rate will be released at 16:00, and the GermanIFO Business Climate Index and the Philippine Unemployment Rate, at 19:00 the UK CBI Business Survey, at 22:00 U.S. time the U.S. S&P/Case-Shiller Home Price Index, at 23:00 the U.S. Consumer Confidence Index, and a U.S. 5-year Treasury auction.With the ECB meeting just two days away, investors should remain cautious regarding the euro’s downside potential as it continues to decline.