Will the currency strength dynamics—which have seen selling of the U.S. dollar and the yen—change? Should we be on guard?

Will the currency strength dynamics—which have seen selling of the U.S. dollar and the yen—change? Should we be on guard?

29.08.2023

In the U.S. currency market the previous day, a trend of selling both the yen and the U.S. dollar emerged, causing the U.S. dollar to fluctuate back and forth against the yen. The USD/JPY pair traded in a narrow range of just under 50 pips between 146.269 and 146.743, showing a lack of clear direction.On the hourly chart, prices are moving across the 20-period moving average (MA), and on the 4-hour chart, they are trading above the 10-period MA. On the daily chart, the RSI has not yet reached 70, leaving some room to spare; therefore, we should remain cautious regarding the dollar’s price movements during U.S. trading hours.

Among European currencies, the euro rose slightly against the yen.The euro/yen pair rose from 158.015 to 158.570. The candlestick, which had fallen below the 20-day moving average (MA) on the daily chart, has recovered to trade above the 20-day MA. On the 4-hour chart, the price appears to be moving toward the upper boundary of the uptrend line, so we will be watching for further upside potential in the euro during European trading hours.

Today’s schedule includes the German GfK Consumer Confidence Survey at 15:00, the French Consumer Confidence Index at 15:45, Turkey’s trade balance at 16:00, Hungary’s policy rate and statement at 21:00, Mexico’s second-quarter GDP at 21:00, and the U.S.S&P/Case-Shiller Home Price Index, at 23:00 the U.S. JOLTS Job Openings, and the U.S. Conference Board Consumer Confidence Index, at 26:00 the U.S. 7-year Treasury auction, and at 28:00 remarks by U.S. Federal Reserve Vice Chair Bar.I want to carefully monitor price movements to see if the currency strength dynamics—which have seen selling of the U.S. dollar and the yen—will shift.