Keep an eye on changes in currency strength over the weekend
28.10.2022
- Rice · Personal Income
- U.S. Core PCE Deflator
U.S. currencies rose against the euro yesterday after the U.S. third-quarter GDP figure, released yesterday, came in at 2.6%, exceeding the consensus forecast.The EUR/USD pair fell by approximately 130 pips from 1.0093 to 0.9957. It dropped from the +2σ level of the 4-hour Bollinger Bands to just below the 20-period moving average. However, since no RSI divergence has appeared on either the 4-hour or daily charts, and the bullish signal has not been negated, we should watch for a potential decline in the US dollar from the weekend into the start of the week.
Although the ECB raised its policy rate by 0.75 percentage points to 2.00% during yesterday’s policy announcement, the euro fell, dragging down the pound—another major European currency—as well. The EUR/GBP pair dropped by approximately 80 pips from 0.8688 to 0.8609, approaching this month’s low. On the daily chart, the price has closed below the 75-day moving average, so we need to remain vigilant as to whether the decline will continue.
Today, at 15:45 during Asian trading hours, we have the French Producer Price Index and French Consumer Price Index; during European trading hours, at 16:00, the Swiss KOF Leading Index; at 17:00, Germany’s Q3 GDP (flash estimate);at 21:00, Germany’s Consumer Price Index; during U.S. trading hours at 21:30, Canada’s GDP, U.S. Personal Income, U.S. Personal Spending, U.S. PCE Deflator, and U.S. Core PCE Deflator; and at 23:00, U.S. Pending Home Sales and the University of Michigan Consumer Sentiment Index. We will be closely monitoring how these economic releases affect currency strength and weakness over the weekend.
Author: Keisuke Sakurai
