With geopolitical risks lingering and the euro facing resistance at higher levels, market participants are likely to keep a close eye on its direction.

With geopolitical risks lingering and the euro facing resistance at higher levels, market participants are likely to keep a close eye on its direction.

06.09.2022

In the previous day's U.S. currency trading, price movements were generally lackluster due to the absence of volatility, partly because U.S. markets were closed for a holiday.The Dollar Index fell to 109.5, and the EUR/USD pair, which opened with a gap down yesterday, rose to completely fill that gap. It rebounded by 90 pips, moving from 0.9878 to 0.9968. However, since the EUR/USD has not yet surpassed its recent high on the 4-hour chart, the downtrend has not been resolved; therefore, we should pay close attention to the direction of the market as we approach U.S. trading hours.

European currencies are facing resistance, with the euro weighed down by the indefinite suspension of Nord Stream 1, causing the EUR/JPY pair to trade in a range between 138.689 and 139.620.During today’s Asian session, the euro/yen rose along with the general upward trend in cross-yen pairs, touching 139.966. Since the euro/yen appears to be forming a triple top on the daily chart, it is important to keep in mind that it could plummet due to fundamental factors.

Today’s schedule includes German manufacturing orders at 3:00 PM during Asian trading hours, the UK construction PMI at 5:30 PM during European trading hours, South Africa’s second-quarter GDP at 6:30 PM, Mexico’s total fixed capital formation at 8:00 PM, the US services PMI (final reading) at 10:45 PM during US trading hours,at 11:00 PM, the U.S. ISM Non-Manufacturing Index, and at 12:30 AM, a U.S. 1-year Treasury auction. With geopolitical risks lingering and the euro facing resistance on the upside, we will be closely monitoring its direction.