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 yesterday’s U.S. currency trading, 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 sent its stock price tumbling.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 Asian trading today, and GBP/USD is currently trading around 1.2060, aiming for higher levels.

European currencies saw the euro lose momentum amid growing concerns over natural gas supplies. While the USD/JPY held its ground against the downtrend, the EUR/JPY fell by more than 160 pips from 139.811 to 138.136, hitting a new low for the week. From a technical perspective, the EUR/JPY is trending downward along the 20-period moving average 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 this downtrend will continue.

Today, the German GfK Consumer Confidence Survey is scheduled for 3:00 PM during Asian trading hours, followed by the French Consumer Confidence Index at 3:45 PM. During European trading hours, the U.S. MBA Mortgage Applications Index is set for 8:00 PM, and during U.S. trading hours, U.S. Durable Goods Orders and U.S. Wholesale Inventories are scheduled for 9:30 PM,at 11:00 PM, U.S. Pending Home Sales; at 11:30 PM, U.S. Weekly Crude Oil Inventories; at 3:00 AM, the FOMC policy rate decision and statement; at 3:30 AM, a press conference by Fed Chair Powell; and Meta’s earnings report is scheduled after the U.S. market close. We will closely monitor whether the euro follows the dollar’s movements following the FOMC announcement.