Will the pound’s rally ahead of tomorrow’s employment data continue?
18.07.2022
- Remarks by MPC Member Saunders (UK)
- Goldman Sachs Q2 Earnings Report
Last weekend, the U.S. dollar index, which had risen to the high 108s, fell back to 107.9, causing the dollar to weaken against the euro. The EUR/USD pair rebounded by about 90 pips from 1.0005 to 1.0095, showing a recovery from below parity.Technically, the EUR/USD has broken above the 20-period moving average (MA) on the 4-hour chart with a real body, and the 4-hour RSI is hovering around 54, just shy of 70. Therefore, we will be watching closely to see if it extends its gains toward the recent high of 1.0182.
Among European currencies, the pound rose as it rebounded against the weakening U.S. dollar, with GBP/USD climbing approximately 70 pips from 1.1805 to 1.1875.The pair continued to rebound during today’s Asian session, climbing as high as 1.1906. However, resistance from the 200-day moving average (SMA) looms above on the hourly chart, and since the pair has been falling without breaking above the hourly 200-SMA since June 28, traders should remain cautious of another reversal and decline.
Today, at 6:00 p.m. CET, MPC member Saunders of the UK will speak; around 8:00 p.m. CET, Bank of America will report its second-quarter earnings;around 9:00 PM for Goldman Sachs’ Q2 earnings, at 9:15 PM for Canada’s housing starts, at 11:00 PM (U.S. time) for the NAHB Housing Market Index, and at 5:00 AM for U.S. securities investment data. With tomorrow’s jobs report on the horizon, we’ll be closely watching to see if the pound’s recent rebound will continue.
Author: Keisuke Sakurai
