Market Analysis: Yen and European Currencies Rise Ahead of US Inflation Data

FXOpen

At the beginning of the week, the major currency pairs made attempts to begin a corrective pullback after a strong upward trend in the US dollar. Thus, the euro/US dollar pair found support at 1.0700 and strengthened by more than 50 pp, buyers of the pound/US dollar pair tried to push it above 1.2500, and the US dollar/yen pair opened the week with a downward gap of more than 100 pp. However, the upcoming fundamental data of the current five-day period are so saturated that they can both contribute to the development of corrective rollbacks and continue the main trends at lightning speed.

USD/JPY

The sharp growth of the USD/JPY pair last week slowed down slightly near 148, which allowed US dollar sellers to temporarily seize the initiative. The price tested the resistance level of 147.80 three times, and yesterday, the market opened with a downward gap in the direction of 145.80. During the day, the pair corrected after the price gap but is still far from reaching Friday's closing level. The main reason for the sharp decline in the pair is the comments of the head of the Bank of Japan (BOJ), Kazuo Ueda that at the end of this year, the Japanese regulator may end the policy of negative rates. If the situation continues, the USD/JPY pair may decline to 144.70-143.60. At the same time, strong fundamental data from the US may help break the resistance at 148.00 and resume growth in the direction of 150.

Today at 21:00 GMT+3, it is worth paying attention to the publication of a report on the execution of the US federal budget. Tomorrow at 15:30 GMT+3, we are waiting for important data on the consumer price index in the United States for August.

EUR/USD

The single European currency managed to stay above 1.0700 last week and is currently trying to develop an upward correction in the direction of 1.0800-1.0900. The development of the situation will largely depend on tomorrow's US inflation data for August. If inflation shows a slowdown, this may serve as a signal for a pause in interest rate increases by the American regulator. As a result, a full-scale downward correction in the US dollar may begin.

GBP/USD

We are seeing an upward correction in the pound/US dollar pair. Last week, the price was trading at 1.2440, and yesterday, it managed to correct by more than 100 pps. However, it makes no sense to consider the likelihood of a full-fledged upward correction without a confident strengthening above 1.2600. If the range of 1.2600-1.2640 remains in resistance status, the downward movement may continue in the direction of 1.2400-1.2300. Tomorrow morning, we are waiting for UK GDP data for July.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Commodity Currencies at Strategic Levels. What Can Affect a Breakdown Downwards? Market Analysis: AUD/USD and NZD/USD Turn Red The Dollar is Corrected after the Comments of the Head of the Federal Reserve USD/JPY Analysis: Prospect of a Breakout of the Level of 155 Yen per Dollar Market Analysis: EUR/USD Nosedives While USD/JPY Extend Rally

Latest articles

Weekly Market Wrap With Gary Thomson: UK100, USD, GOLD, OIL
Financial Market News

Weekly Market Wrap With Gary Thomson: UK100, USD, GOLD, OIL

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

  • UK100 Share Index Rises
Trader’s Tools

What Is a Darvas Box Theory and How Does It Work in Trading?

The Darvas Box Theory, pioneered by Nicolas Darvas in the 1950s, has transcended its stock market origins to become a valuable tool for forex traders. This method leverages specific price movements and patterns, known as the Darvas Box, to track

Shares

NFLX Stock Price Falls Despite Subscriber Growth

Yesterday, after the close of the main trading session on the stock market, Netflix reported to investors for the 1st quarter of 2024.

The report turned out better than expected:
→ earnings per share: actual = USD 5.28, forecast = USD 4.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.