Should we keep a close eye on the euro’s movements, which are rising against the yen despite a decline in the Eurozone CPI?

Should we keep a close eye on the euro’s movements, which are rising against the yen despite a decline in the eurozone CPI?

01.08.2023

In yesterday’s U.S. trading session, the Canadian dollar rose against the yen. As cross-yen pairs generally rose on the last day of July, the CAD/JPY pair also followed the trend, moving into a yen-weakening pattern. The CAD/JPY pair rose from 106.183 to 108.095. On the hourly chart, the 20-period moving average provided support at the lower end, establishing an upward trend. We will be closely monitoring the strength of the Canadian dollar to see if this trend continues into European trading hours.

Despite the final reading of the Eurozone’s July Harmonized Index of Consumer Prices (HICP), released yesterday, falling to 5.3% year-on-year from the previous reading of 5.5%, the euro rose against the yen.The EUR/JPY pair rose from 155.123 to 157.268. The upward trend was supported by the 20-period moving average (MA) on the hourly chart. From a technical perspective, the EUR/JPY has broken above the 200-period simple moving average (SMA) on the 4-hour chart with a real body, and the 4-hour RSI is rising from below 30 toward 70. We will monitor whether the euro continues to strengthen during European trading hours.

Today’s schedule includes UK Nationwide house prices at 3:00 PM, Turkey’s Manufacturing PMI at 4:00 PM, France’s Manufacturing PMI at 4:50 PM, Germany’s unemployment rate and Manufacturing PMI at 4:55 PM, the Eurozone Manufacturing PMI at 5:00 PM, the UK Manufacturing PMI at 5:30 PM, and the Eurozoneunemployment rate and South Africa’s Manufacturing PMI at 6:00 PM, the U.S. Manufacturing PMI at 10:45 PM, the U.S. ISM Manufacturing Index, U.S. JOLTS Job Openings, U.S. Construction Spending, and remarks by U.S. Federal Reserve Bank of Chicago President Goolsbee at 11:00 PM. We will be closely monitoring the euro’s movements against the yen, as it continues to rise despite the decline in the Eurozone CPI.