With the yen weakening, attention is focused on whether the GBP/JPY pair’s upward momentum will continue

With the yen weakening, attention is focused on whether the GBP/JPY pair’s upward momentum will continue

05.02.2024

Last weekend, the Canadian dollar rose in tandem with the U.S. dollar, which was buoyed by strong U.S. employment data. The CAD/JPY pair climbed to a range of 109.336–110.369, rising by about 1 yen as it approached last month’s high.Technically, the CAD/JPY pair is showing an upward trend with the daily RSI hovering just below 70. Since no divergence is currently visible, we should watch to see if the Canadian dollar continues to rise against the yen at the start of the week.

In European currency markets, the pound rose against the yen ahead of today’s non-manufacturing PMI release. GBP/JPY climbed from 186.446 to 187.720. The pair rebounded as the daily 20-day moving average provided support. However, on the higher-timeframe weekly chart, the RSI and the direction of the candlesticks are showing divergence, and since the weekly RSI is trending downward, we need to carefully assess whether there is still room for further gains.

Today’s schedule includes Thailand’s Consumer Price Index at 12:30, Indonesia’s Real GDP at 13:00, Singapore’s Retail Sales and India’s Services PMI at 14:00, Germany’s Trade Balance at 16:00, Turkey’s Consumer Price Index at 16:00, France’s Services and Manufacturing PMI at 17:50, andat 6:00 PM: Eurozone Services and Manufacturing PMI; at 6:30 PM: UK Services and Manufacturing PMI; at 11:45 PM: US PMI Purchasing Managers' Index; at 12:00 AM: US ISM Non-Manufacturing Index; and at 2:30 AM: Remarks by MPC member Pill. We will carefully assess whether the rebound in GBP/JPY, which rose amid a weakening yen, will continue.