Should we be wary of the euro's continued decline, given its limited upside potential?

Should we be wary of the euro's continued decline, given its limited upside potential?

05.08.2025

In yesterday’s U.S. trading session, the Canadian dollar continued to decline against the yen. The CAD/JPY pair fell from 107.426 to 106.581. A pullback occurred when the price touched the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the pair is in the process of breaking below the 200-period simple moving average (SMA) that had been providing support, and on the daily chart, it is currently on the verge of breaking through the support line formed by the 200-period SMA.We will be watching closely to see if today’s economic data releases during U.S. trading hours will push the Canadian dollar to new lows.

Among European currencies, the euro weakened, following the Swiss franc. The euro/yen pair fell from 171.156 to 169.909. The downtrend along the 20-period moving average (MA) on the hourly chart continued. On the 4-hour chart, the pair has already broken below the support line of the 200-period simple moving average (SMA), and on the daily chart, it is falling at a pace that threatens to reach last month’s low.We will be watching closely to see if the euro recovers following today’s economic data releases during European trading hours.

Today, the BOJ meeting minutes will be released at 8:50 a.m. JST; at 3:45 p.m. JST, France will release its industrial production and manufacturing production index; at 4:50 p.m. JST, France will release its non-manufacturing PMI; at 4:55 p.m. JST, Germany will release its non-manufacturing PMI; at 5:00 p.m. JST, the Eurozone will release its non-manufacturing PMI; at 5:30 p.m. JST, the UK will release its non-manufacturing PMI; and at 6:00 p.m. JST, the Eurozone will release itsProducer Price Index, Canada’s trade balance and the U.S. trade balance at 9:30 PM, the U.S. non-manufacturing PMI at 10:45 PM, the U.S. ISM Non-Manufacturing Index at 11:00 PM, a U.S. 3-year Treasury auction at 2:00 AM, and New Zealand’s Q2 unemployment rate at 7:45 AM the following day. We should remain cautious about the possibility of further declines in the euro, as upside potential appears limited.