Market participants are keeping a close eye on the downside potential of the GBP/JPY pair, which is falling due to the strengthening of the yen and the U.S. dollar.

Market participants are keeping a close eye on the downside potential of the GBP/JPY pair, which is falling due to the strengthening of the yen and the U.S. dollar.

03.10.2023

In the U.S. currency market yesterday, the U.S. dollar emerged as the strongest currency during U.S. trading hours after the September U.S. PMI, released yesterday, came in higher than expected at 49.8, up from 48.9 the previous month.The USD/JPY pair rose from 149.401 to 149.697. Furthermore, the US dollar’s strength has been further fueled by comments made by Japanese Finance Minister Suzuki during Asian trading hours today, in which he stated that “exchange rate trends are not a matter of levels but of volatility.” We should remain vigilant regarding whether today’s economic data releases during US trading hours will accelerate the US dollar’s strength.

Among European currencies, the pound fell toward the end of U.S. trading hours. The GBP/JPY pair dropped from 182.812 to 180.976. It has broken below the 75-day moving average (MA) and continues to trend lower during today’s Asian session. On the weekly chart, it has already broken below the 10-day MA, and if it breaks below the 20-day MA as well, there is a possibility of a double top or triple bottom forming, so traders should pay close attention to the downside potential.

Today, the RBA will announce its policy rate and statement at 12:30, India will release its Manufacturing PMI at 14:00, Sweden will release its Money Market Inflation Rate at 15:00, Switzerland will release its Consumer Price Index at 15:30, and France will release its Budget Balance at 15:45.at 4:00 PM, Turkey’s Consumer Price Index and Producer Price Index; at 9:00 PM, Brazil’s Industrial Production and remarks by Bostic, President of the Atlanta Fed; at 10:00 PM, Singapore’s Manufacturing PMI; and at 11:00 PM, the U.S. JOLTS Job Openings. We should pay close attention to the downside potential for GBP/JPY, which is falling due to the strengthening of the yen and the U.S. dollar.