Will the strength of European currencies seen since yesterday continue? All eyes are on price movements ahead of the ECB meeting.

Will the strength of European currencies seen since yesterday continue? All eyes are on price movements ahead of the ECB meeting.

24.10.2023

In the previous day’s U.S. currency trading, the U.S. dollar fell toward the end of the U.S. trading session, ultimately becoming the weakest currency. The USD/JPY pair plummeted from 149.993 to 149.557.As the key 150 yen level approached, selling pressure continued to cap the upside. However, on the 4-hour chart, price action remained confined to a narrow range around the 20-period moving average (MA), and since the pair is trading above the 75-period MA, we need to carefully assess whether any distinctive price movements will emerge before next week’s FOMC meeting.

In European trading, the pound emerged as the strongest currency alongside the euro, strengthening against all other currencies. GBP/JPY rose from 182.036 to 183.489. It surged sharply from just below the 200-period SMA on the 4-hour chart without retesting the level. GBP/JPY continues to target higher levels during today’s Asian session and is attempting to test the recent high of 183.800. We will be watching to see if the pound continues to rise against the yen heading into European trading.

Today’s schedule includes UK employment figures and the German GfK Consumer Confidence Survey at 3:00 PM, French Manufacturing/Services PMI at 4:15 PM, German Manufacturing/Services PMI at 4:30 PM, Eurozone Manufacturing/Services PMI at 5:00 PM, and UKmanufacturing/services PMI, the Hungarian central bank’s policy rate and statement at 9:00 PM, remarks by ECB President Lagarde at 9:30 PM, U.S. manufacturing/services PMI at 10:45 PM, and the Richmond Fed Manufacturing Activity Index at 11:00 PM. We will be watching price movements ahead of the ECB meeting to see if the strength in European currencies seen since yesterday continues.