Market participants are likely to keep a close eye on the euro’s upside potential as it strengthens following the Japanese yen

Market participants are likely to keep a close eye on the euro’s upside potential as it strengthens following the Japanese yen

04.08.2025

In U.S. currency markets 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, plunging 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 the market 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 gained 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 trended upward 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, triggering a rebound, while on the daily chart, the pair has recovered sharply from a stagnation below the 20-period MA to a position 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 be closely monitoring the upside potential of the euro, which has been strengthening alongside the Japanese yen.