All eyes are on whether the weakening euro will follow the U.S. dollar’s lead following the FOMC meeting

All eyes are on whether the weakening euro will follow the U.S. dollar’s lead following the FOMC meeting

27.07.2022

In the U.S. currency market yesterday, the U.S. dollar held steady despite the release of disappointing quarterly earnings from Alphabet and a 40% year-over-year drop in GM’s profits, which caused their stock prices to fall.The Dollar Index has recovered to 107, and GBP/USD fell by more than 120 pips from 1.2089 to 1.1963. However, the U.S. dollar has lost momentum since the start of today’s Asian trading session, and GBP/USD is currently trading around 1.2060, aiming for higher levels.

Among European currencies, the euro lost momentum amid growing concerns over natural gas supplies. While the USD/JPY held steady despite the decline, the EUR/JPY fell more than 160 pips from 139.811 to 138.136, hitting a new low for the week.From a technical perspective, the euro/yen pair is falling along the 20-period moving average (MA) on the 4-hour chart, and since there is still room to fall toward the -3σ level of the Bollinger Bands, we need to carefully assess whether the decline will continue.

Today, the German GfK Consumer Confidence Survey will be released at 15:00 during Asian trading hours, followed by the French Consumer Confidence Index at 15:45; during European trading hours, the U.S. MBA Mortgage Applications Index will be released at 20:00; and during U.S. trading hours, U.S. Durable Goods Orders and U.S. Wholesale Inventories will be released at 21:30,at 23:00, U.S. Pending Home Sales; at 23:30, U.S. Weekly Crude Oil Inventories; at 27:00, the FOMC policy rate decision and statement; at 27:30, a press conference by Fed Chair Powell; and Meta’s earnings report is scheduled after the U.S. market close.We will carefully assess whether the euro will follow the movements of the U.S. dollar in response to the FOMC announcement.