Should we keep a close eye on the direction of the pound, which is facing resistance?

Should we keep a close eye on the direction of the pound, which is facing resistance at higher levels?

12.09.2024

In the U.S. currency market yesterday, the U.S. dollar rose immediately after the release of the August U.S. Consumer Price Index (CPI), as the core index rose by 0.1 percentage points month-over-month, from 0.2% to 0.3%. The USD/JPY pair rebounded from 140.707 to 142.545.During today’s Asian session, it extended its gains to 142.960. However, since the pair continues to trade below the 10-day moving average on the daily chart, we should watch to see if the US dollar’s rally will continue.

European currencies fell against the yen despite the fact that the UK’s July industrial production, released yesterday, improved year-on-year from -1.4% in the previous month to -1.2%. The GBP/JPY pair fell from 186.370 to 183.713.The pair was capped by the 20-period moving average on the hourly chart. On the daily chart, a band walk along the -2σ line of the Bollinger Bands has been confirmed, so we should remain cautious of further declines in the pound during European trading hours.

Today, the UK RICS House Price Index is scheduled for 8:01, followed by Japan’s Business Sentiment Index (BSI) and Domestic Corporate Goods Price Index at 8:50, and Japan’s Foreign and Domestic Securities Investment data at 8:50. At 15:00, Sweden’s Consumer Price Index will be released, followed by Turkey’s Current Account Balance at 16:00,at 9:00 PM, Brazil’s Retail Sales and India’s Consumer Price Index; at 9:15 PM, the ECB’s policy rate decision and statement; at 9:30 PM, Canada’s Housing Starts, the U.S. Producer Price Index, and U.S. Initial Jobless Claims; at 9:45 PM, remarks by ECB President Lagarde; and at 11:25 PM, remarks by SNB Governor Jordan.We want to carefully assess the direction of the pound, which is facing resistance on the upside.