Attention on the euro-dollar exchange rate as it struggles to break out of its trading range
08.08.2022
- There are no major economic indicators scheduled for release in either Europe or the United States
- Be on the lookout for sudden spikes in volatility due to Japan’s Obon holiday
Last weekend, the U.S. dollar emerged as the strongest currency following a significant improvement in the July U.S. employment report. Additionally, Federal Reserve Governor Bowman stated that “a 0.75% rate hike should be considered until a sustained decline in inflation is confirmed,” which further fueled the dollar’s strength.The EUR/USD pair fell by approximately 110 pips from 1.0251 to 1.0140. As the EUR/USD has remained within a range on a daily chart basis since July 19, we should focus on price movements within the 1.0106–1.0286 range.
Among European currencies, the pound, along with the euro, weakened against the U.S. dollar, with GBP/USD falling by as much as 160 pips from 1.2169 to 1.2003. In Asian trading at the start of the week, GBP/USD has rebounded slightly and is trading around 1.2076, but with the 20-period moving average acting as resistance, we need to carefully assess whether the pair will return to a downward trend.
No major economic indicators are scheduled for release today during either European or U.S. trading hours. With Japan currently in the Obon holiday period, trading volume is expected to be light this week, so we should remain vigilant for sudden spikes in volatility during periods of low liquidity. Additionally, with the U.S. CPI set to be released the day after tomorrow, we should carefully monitor the dollar’s movements leading up to the release.
Author: Keisuke Sakurai
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