Europe: With May HICP on the Rise, Attention Turns to the Euro’s Upside Potential

Europe: With May HICP on the Rise, Attention Turns to the Euro’s Upside Potential

03.06.2024

Last weekend, the Canadian dollar rose against the yen following the release of Canada’s first-quarter GDP on May 31, which rebounded to 1.7% from the previous reading of 1.0%. The CAD/JPY pair rose from 114.442 to 115.484.It broke out from below the 20-period moving average on the hourly chart to trade above it. On the 4-hour chart, the price has surged to the +2σ level of the Bollinger Bands, so traders should be wary of corrective price movements during U.S. trading hours.

European currencies rose against the yen as the Eurozone’s May Harmonized Index of Consumer Prices (HICP), released last weekend, showed a year-over-year increase of 2.6%, up from 2.4% the previous month.The euro/yen pair rose from 169.443 to 170.761. It has moved back above the 200-period simple moving average (SMA) on the hourly chart. On the 4-hour chart, the pair is rebounding with the 75-period MA acting as support, and on the daily chart, the upward trend along the 20-period MA continues; therefore, we will be watching for further gains during European trading hours.

Today’s economic indicators include Japan’s capital expenditure at 8:50, Indonesia’s Manufacturing PMI and South Korea’s Manufacturing PMI at 9:30, China’s Caixin Manufacturing PMI at 10:45, Indonesia’s Consumer Price Index at 13:00, and India’smanufacturing PMI, at 13:00 Indonesia’s Consumer Price Index, at 14:00 India’s manufacturing PMI, at 16:00 Turkey’s Producer Price Index and Consumer Price Index, at 16:30 Switzerland’s manufacturing PMI, at 16:55 Germany’s manufacturing PMI, at 17:00 the Eurozone’s manufacturing PMI,U.S. PMI at 22:45, U.S. Construction Spending and U.S. ISM Manufacturing Index at 23:00. We will be closely monitoring the euro’s upside potential following the rise in the Eurozone’s May HICP.