Should we keep an eye on the direction of the U.S. dollar, which is finding support at lower levels?
19.05.2022
- Kashkari: Remarks by the President of the Minneapolis Federal Reserve Bank
- Canada: Raw Materials Price Index
Yesterday, the U.S. dollar strengthened against the euro, causing the EUR/USD pair to fall from 1.056 to 1.045. Since the EUR/USD pair continues to decline on the daily chart, with its upside capped by the 20-day moving average (MA), we should remain cautious about the downward trend until the price breaks above 1.056—the level near the daily 20-day MA—with a solid candle body.
European currencies came under pressure from the US dollar’s firm performance, with GBP/USD falling by approximately 170 pips from 1.250 to 1.233. Although GBP/USD rose above its recent high of 1.239 on the 4-hour chart, it retreated yesterday. The downward trend will remain intact until the pair breaks above this month’s high of 1.263, so we will be watching closely to see if it can surpass that level.
Today, the UK CBI Business Survey will be released at 19:00 CET, followed by the publication of the ECB Governing Council minutes at 20:30 CET. In US time, at 21:30, the CanadianIndustrial Product Prices, the Canadian Raw Materials Price Index, U.S. Initial Jobless Claims, and the U.S. Philadelphia Fed Business Outlook Index at 21:30; U.S. Existing Home Sales, the U.S. Leading Economic Index, and U.S. Weekly Natural Gas Inventories at 23:00; and remarks by Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, at 29:00. We will be watching the direction of the U.S. dollar, which has been holding steady.
Author: Keisuke Sakurai
