All eyes are on the euro’s movements following ECB President Lagarde’s dovish remarks
08.02.2022
- U.S. NFIB Small Business Optimism Index
- Canada's Trade Balance
In yesterday's U.S. trading session, the Australian dollar rose from 0.706 to 0.713 against the U.S. dollar, driven by the strength of Oceania currencies.During today’s Asian session, the currency pair is testing higher levels in a similar fashion. Meanwhile, the GBP/USD pair lacks clear direction and is trading in a range between 1.349 and 1.355. However, as the Asian session began today, the USD/JPY pair rose by about 50 pips from 114.91 to 115.41, driven by the rise in the U.S. 10-year Treasury yield to 1.93%.
European currencies are facing resistance, as ECB President Lagarde’s clearly dovish remarks yesterday—stating that “interest rate hikes will not come before the end of asset purchases”—have weighed on the euro. As a result, the EUR/USD pair has shifted to a very narrow trading range between 1.141 and 1.146.If this gradual decline continues, we would like to position ourselves for a decline with some room to fall, targeting the area around 1.137, which is the 10-day moving average on the daily chart.
Today, the French trade balance and current account balance are scheduled for 4:45 p.m. CET, the U.S. NFIB Small Business Optimism Index for 8:00 p.m. CET, the Canadian trade balance and U.S. trade balance for 10:30 p.m. CET, and the U.S. 3-year Treasury auction for 3:00 a.m. CET. We will be closely monitoring whether the rising USD/JPY pair will test further upside.
Author: Keisuke Sakurai
