Investors should keep a close eye on the movements of cross-yen pairs, which appear to be entering a rebound phase following the yen’s appreciation.

Investors should keep a close eye on the movements of cross-yen pairs, which appear to be entering a rebound phase following the yen’s appreciation.

25.12.2023

Last weekend, the U.S. dollar recovered slightly during U.S. trading hours after the release of U.S. November personal income data on Friday, the 22nd, showed an increase from 0.2% the previous month to 0.4%, while personal spending remained unchanged at 0.2%. The EUR/USD pair, which had risen to 1.1040, plummeted to 1.0998.The price fell just below the 20-period moving average on the hourly chart. From a technical perspective, since the EUR/USD has risen to just below the +2σ level of the daily Bollinger Bands, we should be wary of a sharp decline in the pair over the Christmas holiday.

European currencies saw the euro rebound slightly against the yen after Germany’s November import price index, released last weekend, recovered to a year-on-year decline of 9.0% from the previous month’s 13.0% drop. The euro/yen pair rose from 156.134 to 156.994, returning to an upward trend on the 4-hour chart.Since the 200-day SMA is functioning as a clear support line on the daily chart as well, we will be watching closely to see if the euro will trend higher against the yen in the final week of 2023.

Aside from the Japanese Economic Sentiment Index scheduled for 2:00 PM and Taiwan’s Industrial Production data at 5:00 PM, no major economic indicators or key speeches are expected today, as Europe and the U.S. are on Christmas holiday. Markets in major European countries such as the UK, Switzerland, and Germany will remain closed tomorrow as well. We should pay close attention to the movements of cross-yen pairs, which are currently rebounding from their recent strength.