Will the euro fall across the board following the ECB announcement? Caution is advised.
26.01.2024
- U.S. PCE Deflator
- Europe: Money Supply
In U.S. trading the previous day, the Canadian dollar rose against the yen following the Bank of Canada’s policy rate announcement. The CAD/JPY pair climbed from 108.928 to 109.681, breaking above the 20-period moving average on the 4-hour chart. Furthermore, the 4-hour RSI rebounded without reaching the oversold level of 30, and since the RSI on the higher-timeframe daily chart continues to trend upward, we should keep an eye on the Canadian dollar’s upside potential during U.S. trading hours.
European currencies fell against the yen after the ECB announced yesterday that it would keep its policy rate unchanged at 4.75%, in line with market expectations. The euro/yen pair dropped by approximately 1.3 yen, from 160.966 to 159.699.Although the euro/yen pair fell sharply, it has held the support line at the 20-day moving average on the daily chart. With the daily RSI at 55, there is room for an upward move, so traders should remain cautious regarding the euro’s price action during European trading hours.
Today’s economic indicators include the Japan Tokyo Consumer Price Index at 8:30, the UK GfK Consumer Confidence Index at 9:01, Singapore Industrial Production at 14:00, the Germany GfK Consumer Confidence Index at 16:00, the France Consumer Confidence Index at 16:45, the Eurozone Money Supply at 18:00, and the Mexico Trade Balance at 21:00,22:30: US PCE Deflator and US Personal Income; 23:00: US Dallas Fed Consumer Price Index; 24:00: US Pending Home Sales; and 25:00: Canada’s Fiscal Balance. We will be closely monitoring whether the euro will see across-the-board weakness following the ECB meeting.
Author: Keisuke Sakurai
