With the Eurozone’s May HICP on the rise, attention may turn to the euro’s upside potential

With the Eurozone’s May HICP on the rise, attention may turn 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 climbed from 114.442 to 115.484, breaking above the 20-period moving average on the hourly chart.On the 4-hour chart, the price has surged to the +2σ level of the Bollinger Bands, so we 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 EUR/JPY 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 75-period SMA is acting as support, driving a rebound, and on the daily chart, the upward trend along the 20-period SMA continues, so 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 and South Korea’s manufacturing PMIs at 9:30, China’s Caixin manufacturing PMI at 10:45, Indonesia’s consumer price index at 13:00, and India’smanufacturing PMI, 4:00 PM for Turkey’s Producer Price Index and Consumer Price Index, 4:30 PM for Switzerland’s Manufacturing PMI, 4:55 PM for Germany’s Manufacturing PMI, 5:00 PM for the Eurozone’s Manufacturing PMI, 10:45 PM for the U.S. PMI Purchasing Managers’ Index, and 11:00 PM for U.S. Construction Spending and the U.S. ISM Manufacturing Index.We will be closely monitoring the euro’s upside potential following the rise in the Eurozone’s May HICP.