Should we keep a close eye on the U.S. dollar’s movements during FOMC Week?
19.09.2022
- Manufacturing and Mining Production
- M.I. NAHB Housing Market Index
Last weekend, the U.S. dollar retreated as the Dollar Index edged lower to around 109.8. The EUR/USD pair rose by 90 pips from 0.9944 to 1.0035 and is currently trading just below the 20-period moving average on the 4-hour chart. However, on longer-term timeframes such as the daily chart, the EUR/USD has not yet broken out of its downtrend, and no reversal signals have appeared.We will be watching to see if the direction changes at this week’s FOMC meeting.
European currencies came under pressure from the strength of the Oceania currencies, causing the pound to decline. The GBP/AUD pair fell by approximately 160 pips from 1.7135 to 1.6975. The price movement saw the pair fall back below the daily 20-day moving average (MA) that it had previously broken above. Since the GBP/AUD pair closed last week with a bearish candle featuring an upper shadow due to the decline at the end of last week, we will be watching closely to see if there is an upward move heading into the weekend.
No major economic indicators are scheduled for release during European trading hours today. However, once U.S. trading begins, the Canadian Industrial Product Prices and Canadian Raw Materials Price Index are set for release at 9:30 p.m., followed by the U.S. NAHB Housing Market Index at 11:00 p.m.This week is packed with major events, including the release of Japanese and Canadian CPI data on the 20th, the U.S. FOMC interest rate decision on the 21st, and interest rate announcements from the UK, Japan, and Switzerland on the 22nd. We will be closely monitoring the direction of the U.S. dollar ahead of the FOMC meeting.
Author: Keisuke Sakurai
