Will the pound's rise continue?
27.07.2021
- U.S. 5-Year Treasury Auction
- Rice and Durable Goods Orders
In yesterday’s stock market, European markets saw a pullback, with Germany’s DAX closing at 15,618, down 0.32% from the previous day. The German IFO Business Climate Index, released yesterday, fell to 100.8—its first decline in six months—and the result, which missed market expectations, weighed on sentiment. Meanwhile, U.S. markets saw a slight rise in stock prices.U.S. new home sales for June, released yesterday, fell by about 6.6% from the previous month to an annualized rate of 676,000 units, missing market expectations. This appears to reflect a decline in demand for new homes due to the overall surge in housing prices.
In the foreign exchange market, the pound continues to show strength, and among the yen crosses, GBP/JPY has seen the largest gain, rising 120 pips from 151.4 to 152.6. Technically, while the pair has pulled back at the 200-period moving average (MA) on the 4-hour chart, it has broken above the 20-period MA on the daily chart; therefore, we need to carefully assess whether the upward trend will continue into this week.
Today, at 19:00 CET, the UKCBI Retail Trade Survey, followed by U.S. Durable Goods Orders at 21:30 U.S. time, remarks by RBA Deputy Governor Devel at 21:35, the U.S. S&P/Case-Shiller Home Price Index at 22:00, the U.S. Consumer Confidence Index and the U.S. Richmond Fed Manufacturing Index at 23:00, and a U.S. 5-year Treasury auction at 02:00.With tomorrow’s FOMC meeting on the horizon, we will be closely monitoring the battle between European currencies and the U.S. dollar.
Author: Keisuke Sakurai
