Should we wait and see which direction cross-yen pairs will take following the reversal from the strong yen?

Should we wait and see which direction cross-yen pairs will take following the reversal from the strong yen?

05.12.2024

In yesterday’s U.S. currency trading, the Canadian dollar rose against the yen despite the fact that Canada’s third-quarter labor productivity, released yesterday, deteriorated from the previous reading of -0.2% to -0.4%. The CAD/JPY pair rose from 106.258 to 107.503. The price broke above the 20-period moving average (MA) on the hourly chart and extended its gains to just below the 75-period MA.On the 4-hour chart, the pair is trading just below the 20-period moving average, so it will be worth watching whether the Canadian dollar can maintain its momentum during U.S. trading hours.

European currencies rose against the yen after the European Union’s October Producer Price Index (PPI), released yesterday, showed an improvement to a year-over-year decline of 3.2% from the previous month’s 3.4% drop. The euro/yen pair rose from 156.985 to 158.642. On the 4-hour chart, the price has recovered to the centerline of the Bollinger Bands, just below the 20-period moving average.

Today’s schedule includes: Australia’s trade balance at 9:30, remarks by Bank of Japan Board Member Nakamura at 10:30, Switzerland’s unemployment rate at 15:45, Germany’s manufacturing orders at 16:00, France’s industrial production and manufacturing production index at 16:45, and the UK’sConstruction PMI, 7:00 PM for Eurozone Retail Sales, 9:30 PM for U.S. Challenger Layoff Announcements, 10:30 PM for Canada’s Trade Balance, U.S. Initial Jobless Claims, and U.S. Trade Balance, 12:00 AM for Canada’s Ivey PMI, and 12:30 AM for U.S. Weekly Crude Oil Inventories. We want to carefully assess the direction of cross-yen pairs, which have rebounded and risen.