Should we be wary of the euro's upside potential as it rebounds?
09.05.2022
- France: Trade Balance
- Canada: Residential Building Permit
Last weekend, the U.S. dollar turned negative against the euro after the nonfarm payrolls figure came in lower than the previous reading at 428,000. The EUR/USD pair rebounded from 1.048 to 1.059. However, the rebound was short-lived, and the pair has since fallen back to 1.050 during today’s Asian trading session.From a technical perspective, the EUR/USD pair has tested the 1.047 support level—which has held over the past month—more than three times on the 4-hour chart, so we should be wary of a break below this level should the pair decline.
Among European currencies, the euro rose against both the U.S. dollar and the British pound, with the EUR/GBP pair climbing more than 90 pips from 0.850 to 0.859. The EUR/GBP pair continued its upward trend during today’s Asian trading session and is currently trading around 0.856. Additionally, given that ECB Governing Council member and Austrian Central Bank Governor Holzmann stated last weekend that “up to three rate hikes should be implemented this year,” we should keep a close eye on the euro’s rise.
Today, we have France’s trade balance and current account balance scheduled for 3:45 p.m. CET, followed by Canadian housing starts at 9:30 p.m. EST, remarks by MPC member Saunders at 10:00 p.m. EST, and U.S. wholesale inventories (final reading) at 11:00 p.m. EST. We will be closely monitoring how the euro reacts after these key events are released.
Author: Keisuke Sakurai
