Will the pound's upward momentum against the U.S. dollar continue?
26.07.2022
- Richmond Fed Manufacturing Index
- U.S. S&P/Case-Shiller Home Price Index
Yesterday, the U.S. dollar weakened against European currencies, with the GBP/USD pair rising from 1.1959 to 1.2086. Technically, the GBP/USD pair is trading just below the 200-period SMA on the 4-hour chart. However, on the weekly chart, it has touched the -2σ line of the Bollinger Bands, and the RSI is at a low level of 32. Therefore, we will need to closely monitor whether the upward rebound will continue.
European currencies fell against the Australian dollar after Germany’s July Ifo Business Climate Index, released yesterday, came in below the previous reading at 88.6—its lowest level in two years. The EUR/AUD pair dropped by approximately 130 pips from 1.4802 to 1.4677.The pair continues to test lower levels during today’s Asian session. If EUR/AUD breaks below the recent low of 1.4602, it could lose support and accelerate its decline, so we will need to closely monitor the direction of the market.
Today, the schedule includes the UK CBI Retail Trade Survey at 19:00 CET, the Turkish Housing Price Index at 20:30 CET, the US S&P/Case-Shiller Home Price Index at 22:00 ET, the US Consumer Confidence Index, New Home Sales, and the Richmond Fed Manufacturing Index at 23:00 ET, and a US 5-year Treasury auction at 02:00 ET.We will be watching closely to see if the pound, which has been showing strength, will rebound and rise against the US dollar.
Author: Keisuke Sakurai
