Should We Be Wary of Currency Strength and Weakness in Cross-Yen Pairs, Given the Shift from Yen Weakness to a Trend Toward Yen Buying?

Should We Be Wary of Currency Strength and Weakness in Cross-Yen Pairs, Given the Shift from Yen Weakness to a Trend Toward Yen Buying?

31.08.2023

In the U.S. currency market yesterday, the U.S. dollar fell against the yen despite the fact that the U.S. July existing home sales figure, released yesterday, improved to 0.9% month-over-month from 0.3% the previous month. The USD/JPY pair fell from 146.525 to 146.534.It broke below the 200-period SMA on the hourly chart. As prices continue to test lower levels during today’s Asian session, we will be watching carefully to see if the U.S. dollar weakens against the yen ahead of tomorrow’s U.S. employment report.

Among European currencies, the pound emerged as the strongest during U.S. trading hours and rose against the yen. The GBP/JPY pair climbed from 184.319 to 186.050.It is now just a short distance away from this month’s high in the mid-186 yen range. However, during today’s Asian trading session, the pair has pulled back and has already fallen to around 185.400. Since the price has risen to the +3σ level on the Bollinger Bands on the 4-hour chart, we will be closely monitoring any pullback movements for the time being.

Today, Swiss retail sales will be released at 15:30, followed by the French Consumer Price Index and Producer Price Index at 15:45, German employment statistics at 16:55, and the Eurozone employment statistics and Consumer Price Index (HICP) at 18:00,at 8:30 PM, U.S. Challenger Layoffs; at 9:30 PM, U.S. Initial Jobless Claims, Canada’s Current Account, U.S. Personal Income, and U.S. PCE Deflator; at 10:00 PM, U.S. Collins:Remarks by Boston Fed President Collins, and at 22:45, the U.S. Chicago Purchasing Managers’ Index. Be wary of currency strength and weakness in cross-yen pairs, as the trend has shifted from yen weakness to yen buying.