Attention is turning to the resilience of European currencies, which have been weakening
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 oil prices.The Dow Jones Industrial Average fell about 1.51% from the previous day, closing at $35,368. The VIX (fear index) rose by about 18%, surpassing its benchmark of 20 to reach 22.7. While commodity markets were generally rising, gold fell slightly, trading around $1,812.
In the foreign exchange market, the euro is weakening, with the EUR/USD pair falling from 1.141 to 1.131.The EUR/USD pair has already broken below the 200-period simple moving average (SMA) on the hourly chart and is currently positioned just above the 200-period SMA on the 4-hour chart. Technically, the EUR/USD pair appears to be capped by the weekly 20-period moving average (MA). If the decline continues, a drop 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 Retail Price Index, and the German Consumer Price Index at 16:00 European time; the South African Consumer Price Index at 17:00; the US MBA Mortgage Applications Index at 21:00 US time; the Canadian Consumer Price Index, Canadian House Price Index, and US Housing Starts at 22:30; and remarks by UKremarks by BOE Governor Bailey and remarks by BOE Deputy Governor Kanrif, and at 03:00, a US 20-year Treasury auction. I intend to watch the situation carefully to see if the weakening euro can stage a solid rebound.
Author: Keisuke Sakurai
