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 upon touching 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 provided by 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, at 8:50 AM, the BOJ meeting minutes will be released; at 3:45 PM, France’s industrial production and manufacturing production index will be released; at 4:50 PM, France’s non-manufacturing PMI will be released; at 4:55 PM, Germany’s non-manufacturing PMI will be released; at 5:00 PM, the Eurozone’s non-manufacturing PMI will be released; at 5:30 PM, the UK’s non-manufacturing PMI will be released; and at 6:00 PM, the Eurozone’sProducer 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 PMI at 11:00 PM, the 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 potential for the euro to continue its decline, given its limited upside.

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