Should we focus on the upside potential for European currencies amid geopolitical risks?
15.02.2022
- Germany's ZEW Economic Sentiment Survey
- Europe: Trade Balance
In the U.S. currency market the previous day, while the Dollar Index remained flat at 96.2, the euro fell by about 80 pips against the dollar, from 1.136 to 1.127.This decline offset the gains seen immediately following the ECB’s policy rate decision earlier this month. With yesterday’s drop, the EUR/USD pair has returned to the 1.123–1.137 range, so it is worth noting that price action may remain directionless for the time being.
In European currency trading, the euro has risen slightly during today’s Asian session, and the EUR/GBP pair—which had fallen yesterday—has rebounded slightly today. It is currently trading around 0.836. However, since the EUR/GBP pair continues to decline with its upside capped by the 20-period moving average (MA) on the hourly chart, we will first be watching closely to see if it can break above the 20-MA level of 0.836 with a solid candlestick.
Today, at 16:00 CET, the UK unemployment rate and UK jobless claims will be released, followed by the Eurozone/Germany’s ZEW Economic Sentiment Survey, Eurozone Q4 GDP, and Eurozone trade balance, followed by Canada’s housing starts at 22:15 during U.S. trading hours, the U.S. Producer Price Index and the New York Fed Manufacturing Index at 22:30, Canada’s existing home sales at 23:00, and U.S. foreign direct investment in U.S. securities at 6:00 the following day.Amid the escalating situation in Ukraine, we will be watching to see if European currencies can stage a rebound.
Author: Keisuke Sakurai
