Investors should keep an eye on the U.S. dollar's movements against European currencies

Investors should keep an eye on the U.S. dollar's movements against European currencies

19.08.2021

Yesterday, the three major U.S. stock indices all fell, resulting in a market environment characterized by lower stock prices, flat interest rates, and falling oil prices. The yield on the 10-year U.S. Treasury note remained flat in the 1.26% range, while gold failed to reach $1,800 and resumed its downward trend, currently trading in the $1,777 range.

In the foreign exchange market, the U.S. dollar has emerged as the strongest currency, with GBP/USD hitting a new low for the month, falling to 1.371. From a technical perspective, GBP/USD is declining as it faces resistance at the 20-period moving average (MA) on the 4-hour chart. Since it has already fallen below the 20-period MA on the daily chart, caution is warranted regarding a potential downtrend for the time being. Similarly, AUD/USD is also falling and is currently trading around 0.719.

Today, the Swiss trade balance is scheduled for release at 3:00 PM Asia time, followed by U.S. initial jobless claims, the Canadian house price index, and the Philadelphia Fed Business Outlook Index at 9:30 PM U.S. time. The U.S. Leading Economic Index is set for release at 11:00 PM, and U.S. weekly natural gas inventories at 11:30 PM.We want to carefully assess how the U.S. dollar, which is once again on an upward trend, will perform against European currencies.