Market participants may be wary of further downside potential in the EUR/JPY pair amid a strengthening yen
04.08.2023
- European Retail Sales
- Canada-Ivey Purchasing Managers' Index
In the U.S. currency market yesterday, the U.S. dollar traded in a tight range against the euro after the U.S. July Purchasing Managers' Index (PMI), released yesterday, came in at 52.0, matching the previous month's reading.The EUR/USD pair traded in a range between 1.0912 and 1.0961, lacking a clear direction. However, during today’s Asian session, a rebound was observed with support at the 20-period moving average (MA), and the hourly RSI is beginning to trend upward. Therefore, we should be cautious about whether the US dollar will weaken during the European session.
European currencies fell against the yen after the Eurozone’s June Producer Price Index (PPI), released yesterday, showed a year-on-year decline of 3.4%, worsening from the previous month’s 1.5% drop.The euro/yen pair fell from 157.211 to 155.545. On the daily chart, a triple top pattern appears to be forming. We will monitor the situation closely, considering today’s retail sales data, to see if the euro continues to weaken against the yen into U.S. trading hours.
Today’s schedule includes German manufacturing orders at 3:00 PM (Asia time), Hungarian industrial production at 3:30 PM, French industrial production and the French manufacturing production index at 3:45 PM, followed by Thailand’s foreign exchange reserves at 4:30 PM (Europe time), the UK construction PMI at 5:30 PM, and Eurozone retail sales at 6:00 PM.at 20:15, remarks by MPC member Pill; during U.S. trading hours at 21:30, Canadian and U.S. employment reports; and at 23:00, the Canadian Ivey PMI. We should remain highly vigilant regarding the downside potential for EUR/JPY, which has been trending toward a stronger yen.
Author: Keisuke Sakurai
