Caution Advised Against Chasing the Falling Pound Lower
08.03.2022
- U.S. 3-Year Treasury Auction
- U.S. Wholesale Inventories (Final Figures)
In the U.S. currency market the previous day, the Dollar Index rose to 99.2, strengthening even against the currencies of commodity-producing nations, which had been hitting new highs day after day. The AUD/USD pair touched a year-to-date high of 0.744 before pulling back approximately 130 pips to 0.731.From a technical perspective, since the AUD/USD broke above the 200-day SMA on the daily chart with a real body candle and has since retested that level, we will be watching closely to see if the pair resumes its upward trend after this pullback.
Among European currencies, the decline in the pound—which had become the weakest currency by dawn—was particularly notable, with the GBP/JPY pair falling approximately 120 pips from 152.22 to 150.99.Since the GBP/JPY pair has already broken below its support line on the daily chart, traders should be wary of a further decline toward the next support level around 149.89.
Today, at 16:00, Germany’s industrial production; at 18:30, South Africa’s fourth-quarter GDP (final reading);at 7:00 PM, the Eurozone’s Q4 GDP (final reading); at 8:00 PM, the U.S. NFIB Small Business Optimism Index; at 10:30 PM, Canada’s trade balance and the U.S. trade balance; at midnight, U.S. wholesale inventories (final reading);at 27:00, the U.S. 3-year Treasury auction, and at 6:45 the following day, New Zealand’s Q4 manufacturing sales figures are scheduled to be released. I want to keep a close eye on various headline news stories while carefully assessing currency strength and weakness.
Author: Keisuke Sakurai
