Will Attention Turn to the Resilience of Weakening European Currencies?
19.01.2022
- U.S. 20-Year Treasury Auction
- U.S. MBA Mortgage Applications Index
Yesterday, on the U.S. markets following the long weekend, the three major stock indices all fell, resulting in a market environment characterized by falling stock prices, rising interest rates, and higher crude oil prices. The Dow Jones Industrial Average closed at $35,368, down about 1.51% from the previous day.The fear index (VIX) rose by about 18%, surpassing its benchmark of 20 to reach 22.7. While commodity markets were generally on the rise, gold fell slightly, trading around $1,812.
In the foreign exchange market, the euro is showing signs of weakness, with the EUR/USD pair falling from 1.141 to 1.131. On the hourly chart, the EUR/USD has already broken below the 200 SMA, and on the 4-hour chart, it is positioned just above the 200 SMA.From a technical perspective, the EUR/USD pair appears to be capped by the weekly 20-day moving average (MA). If the downtrend continues, a decline to 1.080 is possible in the long term, so it is important to carefully assess the relative strength between the euro and the U.S. dollar.
Today’s schedule includes the UK Consumer Price Index and UK Retail Price Index at 16:00 European time, the German Consumer Price Index at 17:00, and the South African Consumer Price Index at 17:00; followed by the U.S. MBA Mortgage Applications Index at 21:00 U.S. time, the Canadian Consumer Price Index and Canadian House Price Index at 22:30,U.S. Housing Starts, at 23:15 remarks by Bank of England Governor Bailey and Deputy Governor Kanrif, and at 27:00 a U.S. 20-year Treasury auction. I intend to watch the market carefully to see if the euro, which has been weakening, can stage a solid rebound.
Author: Keisuke Sakurai
