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?

12.09.2024

In U.S. currency trading the previous day, the U.S. dollar rose immediately after the release of the U.S. August 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 trading session, it extended its gains further to 142.960. However, since the pair continues to trade below the 10-day moving average (10MA) on the daily chart, traders should monitor whether the U.S. dollar’s rally will continue.

European currencies saw the pound fall against the yen, despite yesterday’s release of UK July industrial production figures showing an improvement to a year-over-year decline of 1.2% from the previous month’s 1.4% decline. The GBP/JPY pair fell from 186.370 to 183.713.The pair’s upside 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 traders should remain cautious of further declines in the pound during European trading hours.

Today, the UK RICS Housing Price Index will be released at 8:01, followed by Japan’s Business Sentiment Index (BSI) and Domestic Corporate Goods Price Index at 8:50, Japan’s Foreign and Domestic Securities Investment data at 8:50, Sweden’s Consumer Price Index at 15:00, 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 andU.S. Producer Price Index, U.S. Initial Jobless Claims, 21:45: Remarks by ECB President Lagarde, and 23:25: Remarks by SNB Governor Jordan. We want to carefully assess the direction of the pound, which is facing resistance on the upside.