Keep an eye on the euro's upward trend
26.05.2022
- Kansas City Fed Manufacturing Activity Index
- Remarks by Brainard, the incoming Vice Chair of the Federal Reserve
In the U.S. currency market yesterday, the euro entered a corrective phase following its recent strength, with the EUR/USD pair falling approximately 100 pips from 1.074 to 1.064. On the 4-hour chart, the EUR/USD is finding support at the 20-period moving average (MA), and as it is nearing the completion of a retest of the 200-period simple moving average (SMA), I intend to wait and see whether it will break above the recent high of 1.074 with a solid candle.
European currencies weakened after the ECB’s Financial Stability Report, released yesterday, stated that “global cost pressures could weaken the economic outlook for the euro area.”The EUR/JPY pair fell by approximately 120 pips from 136.19 to 134.98. However, it has been trending higher during today’s Asian session. Technically, until the EUR/JPY breaks decisively above the recent daily high of 138.31, it could move in either direction, so we should assess the situation carefully.
Today, during European trading hours, Turkey’s Economic Confidence Index will be released at 16:00, followed by the TCMB policy rate and statement at 20:00. During U.S. trading hours, Canada’s Retail Sales, U.S. Initial Jobless Claims, U.S. Q1 GDP, and U.S. Personal Consumption Expenditures will be released at 21:30,U.S. Core PCE Deflator at 21:30, U.S. Pending Home Sales at 23:00, U.S. Weekly Natural Gas Inventories at 23:30, U.S. Kansas City Fed Manufacturing Activity Index at 24:00, remarks by incoming Fed Vice Chair Brainard at 25:00, and a U.S. 7-year Treasury auction at 26:00.We will be closely monitoring the trend of the euro, which is on the rise.
Author: Keisuke Sakurai
