Should We Wait and See How Much the Euro Can Rebound After Its Decline Due to Lower Eurozone HICP?

Should We Wait and See How Much the Euro Can Rebound After Its Decline Due to Lower Eurozone HICP?

02.09.2024

Last weekend, the Canadian dollar rose sharply against the U.S. dollar during U.S. trading hours. The CAD/JPY pair rose from 107.287 to 108.530. The hourly RSI surged from 43 to 80.On the 4-hour chart, the candlesticks have extended to the +3σ level of the Bollinger Bands, and on the weekly chart, a rebound is occurring near the 200 EMA. It will be interesting to see if the Canadian dollar can maintain its momentum into the beginning of the month.

European currencies fell against the U.S. dollar as the preliminary August Harmonized Index of Consumer Prices (HICP) for the eurozone, released on August 30, showed a year-over-year rate of 2.2%, down 0.4 percentage points from the previous month’s 2.6%.The euro fell against the U.S. dollar from 1.1094 to 1.1044. The 20-period moving average (MAP) on the hourly chart acted as a resistance level. On the daily chart, the price has pulled back from the +2σ line of the Bollinger Bands to the centerline.

Today’s schedule includes Japan’s second-quarter capital expenditure data at 8:50, Indonesia’s Manufacturing PMI, South Korea’s Manufacturing PMI, and Malaysia’s Manufacturing PMI at 9:30, Australia’s housing construction permits at 10:30,at 10:45 China’s Caixin Manufacturing PMI, at 1:00 p.m. Indonesia’s Consumer Price Index, at 3:30 p.m. Switzerland’s Manufacturing PMI, at 4:50 p.m. the Manufacturing PMI, at 4:55 p.m. Germany’sManufacturing PMI, 17:00: Eurozone Manufacturing PMI, and 17:30: UK Manufacturing PMI. We intend to cautiously monitor the potential for a rebound in the euro, which fell following the decline in the Eurozone HICP.