Market participants may be watching the Canadian dollar’s direction as the CPI rises again
16.08.2023
- Canada: Housing Starts
- Release of the FOMC Minutes (July 25–26)
In yesterday’s U.S. trading session, the Canadian dollar fell against the yen despite the release of Canada’s July Consumer Price Index, which rose to 3.3% year-over-year from the market forecast of 2.9%. The CAD/JPY pair fell from 108.277 to 107.661, dropping below the 75-period moving average on the hourly chart.Technically, the pair is positioned just below the 4-hour 20-MA, and on the higher-timeframe daily chart, it has entered a corrective phase from the upper boundary of the uptrend line. Therefore, we should be cautious of further downside movement in CAD/JPY during U.S. trading hours.
European currencies saw the euro rise against the yen after Germany’s August ZEW Economic Sentiment Index, released yesterday, improved to -12.3 from -14.7 the previous month. The euro/yen pair rose from 158.537 to 159.329 before falling back.During today’s Asian trading session, the euro has faced resistance at higher levels and is currently trading around 158.678. We will be watching the euro’s direction closely to see if the pullback has paused and a renewed upward trend is emerging.
Today’s schedule includes the UK Consumer Price Index and UK Producer Price Index at 3:00 PM, Eurozone Q2 GDP and Eurozone Industrial Production at 6:00 PM, the US MBA Mortgage Applications Index at 8:00 PM, Canadian Housing Starts at 9:15 PM, and Canadian Wholesale Sales at 9:30 PM,US Housing Starts, at 10:15 PM US Industrial Production, at 11:30 PM US Weekly Crude Oil Inventories, at 3:00 AM the release of the US FOMC Minutes, and at 3:10 AM a speech by RBNZ Governor Orr. We need to remain highly vigilant regarding the direction of the Canadian dollar following another rise in the CPI.
Author: Keisuke Sakurai
