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 amid a decline in stock prices following the release of Alphabet’s disappointing quarterly earnings and General Motors’ report of a 40% year-over-year drop in profits.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 with room to fall as far as the -3σ level of the Bollinger Bands, we need to carefully assess whether the decline will continue.

Today’s schedule includes the German GfK Consumer Confidence Survey at 15:00 during Asian trading hours, the French Consumer Confidence Index at 15:45, the U.S. MBA Mortgage Applications Index at 20:00 during European trading hours, U.S. Durable Goods Orders and U.S. Wholesale Inventories at 21:30 during U.S. trading hours,at 11:00 PM U.S. Pending Home Sales, at 11:30 PM U.S. Weekly Crude Oil Inventories, at 3:00 AM U.S. FOMC policy rate decision and statement, at 3:30 AM U.S. Fed Chair Powell’s press conference, and Meta’s earnings report is scheduled after the close of U.S. markets.We will carefully assess whether the euro will follow the movements of the U.S. dollar in response to the FOMC announcement.