Should We Keep an Eye on the Upside Potential of the Canadian Dollar Against the Yen, Which Rallied on the Back of Improved Manufacturing Sales?
16.01.2024
- Germany's Consumer Price Index
- U.S. New York Fed Manufacturing Index
In U.S. currency trading yesterday, the Canadian dollar rose against the yen after Canada’s November manufacturing sales—released yesterday—improved to +1.2% from the previous month’s -2.8%. The CAD/JPY pair rose from 107.856 to 108.757.It temporarily broke above the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, CAD/JPY appears to be rebounding with support from the 75-period MA, so we will be watching to see if the Canadian dollar continues to gain ground heading into the middle of the week.
European currencies fell against the U.S. dollar, even though Germany’s December wholesale price index—released yesterday—improved year-over-year from the previous month’s -3.6% to -2.6%.The EUR/USD pair fell from 1.0967 to 1.0933, dropping to the -3σ level of the hourly Bollinger Bands. The pair has continued to decline during today’s Asian trading session, already falling to 1.0915. We will closely monitor the situation to determine whether the euro will continue to weaken.
Today’s economic indicators include the UK Employment Report and the German Consumer Price Index at 16:00, the German ZEW Economic Sentiment Index and the Eurozone ZEW Economic Sentiment Index at 19:00, and Israel’s Real GDP at 20:00,at 22:15: Canadian housing starts and the Canadian Consumer Price Index, as well as the U.S. New York Fed Manufacturing Index; at 24:00: remarks by Bank of England Governor Bailey; and at 25:00: remarks by Federal Reserve Governor Waller.We will be watching for further upside potential in the CAD/JPY pair, which has risen on the back of improved manufacturing sales.
Author: Keisuke Sakurai
