Will the decline in the dollar index weigh on the U.S. dollar, or should we wait and see?
24.10.2022
- U.S. Manufacturing/Services PMI
- Chicago Fed National Activity Index
Last weekend, the U.S. dollar weakened against the euro as the Dollar Index fell to 112.1, causing the EUR/USD pair to rise.The EUR/USD pair rose from 0.9705 to 0.9835. This rebound came after the price broke above the 200-period simple moving average (SMA) on the 4-hour chart. However, looking at the daily chart, the price is fluctuating around the 20-period moving average (MA) with little momentum, so we need to carefully assess whether the euro’s momentum will continue into U.S. trading hours.
European currencies saw the euro’s decline against the yen limited to about 4 yen, as the Eurozone’s October consumer confidence index—released last Friday, the 21st—came in at -27.6, slightly exceeding market expectations of -31.1 and surpassing the previous reading of -28.8.The EUR/JPY pair fell from 148.347 to 144.180 over the course of about two hours. During today’s Asian trading session, it has recovered to around 146.422. Since it is currently trading above the 10-day moving average on the daily chart, attention will focus on whether it can break above the pre-intervention level of 148.347.
Today, during European trading hours, the French Manufacturing/Services PMI will be released at 16:15, the German Manufacturing/Services PMI at 16:30, the Eurozone Manufacturing/Services PMI at 17:00, and the UKmanufacturing and services PMIs, followed by the U.S. Chicago Fed National Activity Index at 21:30 U.S. time, the U.S. manufacturing and services PMIs at 22:45, remarks by BOE Deputy Governor Ramsden at 23:15, and remarks by U.S. Treasury Secretary Yellen at 24:00. I intend to watch the situation carefully to see if the decline in the Dollar Index will weigh on the upside of the U.S. dollar.
Author: Keisuke Sakurai
