Should we keep a close eye on the euro’s upside potential as it strengthens following the Japanese yen?

Should we keep a close eye on the euro’s upside potential as it strengthens following the Japanese yen?

04.08.2025

Last weekend, the Canadian dollar weakened against the yen starting in Asian trading hours. The CAD/JPY pair fell from 108.958 to 106.806. It moved from above the 20-period moving average (MA) on the hourly chart to below it, plummeting along the -3σ line of the Bollinger Bands. On the 4-hour chart, the RSI has dropped from 67 to 32, and on the daily chart, the pair has broken well below the 20-period MA line, which had served as support until the latter half of last month.Since trading opened with a downward gap during today’s Asian session, traders should watch for continued weakness in the Canadian dollar.

European currencies rose as the euro strengthened against the pound following the release on the 1st of the preliminary flash estimate for the Eurozone’s July Harmonized Index of Consumer Prices (HICP), which remained unchanged at 2.3% year-on-year.The euro rose against the pound from 0.8636 to 0.8728. It moved higher while finding support at the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the 200-period simple moving average (SMA) served as a support level, leading to a rebound, and on the daily chart, the pair has recovered sharply from a stagnation below the 20-period MA to a level above it.

Today’s economic calendar includes Japan’s monetary base at 8:50 a.m., Switzerland’s consumer price index at 3:30 p.m., Switzerland’s manufacturing PMI at 4:30 p.m., and U.S. new manufacturing orders and durable goods orders (final figures) at 11:00 p.m. No other major economic indicators or key speeches are scheduled. We will closely monitor the upside potential of the euro, which has been strengthening alongside the Japanese yen.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed