Will the rise in the euro-dollar exchange rate pause?
25.08.2021
- U.S. MBA Mortgage Applications Index
- U.S. 5-Year Treasury Auction
Yesterday, the three major U.S. stock indices all rose, creating a risk-on market characterized by higher stock prices, higher interest rates, and higher oil prices. The yield on the 10-year U.S. Treasury note rose slightly to 1.29%, just shy of 1.3%, while WTI crude oil recovered to $67.30.Yesterday’s U.S. July existing home sales report came in at 708,000 units, exceeding the market forecast of 697,000 units, indicating solid housing demand.
In the foreign exchange market, the Dollar Index has fallen for two consecutive days, dropping to 92.8. As a result, the EUR/USD pair has risen slightly. The EUR/USD is currently trading around 1.174.Technically, the EUR/USD pair appears to be finding support at the 200-period simple moving average (SMA) on the hourly chart, and on the 4-hour chart, it is also finding support at the 20-period moving average (MA). While the future direction will depend on the US dollar, the key focus will be whether the pair can break above the recent high of 1.180.
Today’s economic indicators include Turkey’s Economic Sentiment Index and Capacity Utilization at 16:00 CET, Germany’s IFO Business Climate Index at 17:00 CET, the U.S. MBA Mortgage Applications Index at 20:00 CET, U.S. Durable Goods Orders at 21:30 ET, U.S. Weekly Crude Oil Inventories at 23:30 ET, and the U.S. 5-Year Treasury Auction at 02:00 ET.With the Jackson Hole Symposium just two days away and volatility across various currencies on the decline, we will carefully assess how today’s economic indicators affect currency strength.
Author: Keisuke Sakurai
