Should We Keep a Close Eye on the Pound, Which Is Facing Resistance on the Upside?
02.11.2022
- U.S. FOMC Policy Rate and Statement Announcement
- Press Conference by U.S. Federal Reserve Chair Powell
In the U.S. currency market the previous day, the U.S. dollar rose after the U.S. October Manufacturing PMI and the ISM Manufacturing Index both came in above market expectations. The EUR/USD pair fell by about 100 pips from 0.9952 to 0.9851, marking its fourth consecutive day of declines.From a technical perspective, the EUR/USD pair is trading just below the daily 20-day moving average (MA). If it breaks below the daily 20-day MA, the 4-hour 200-period simple moving average (SMA) will act as support; therefore, it will be worth watching to see if the pair rebounds at the 4-hour 200-SMA level of 0.9827.
Like the euro, the British pound came under pressure against the U.S. dollar. The GBP/USD pair fell by approximately 130 pips from 1.1564 to 1.1439. The decline halted as the pair found support at the 200-period SMA on the hourly chart.Although the UK’s October Manufacturing PMI, released yesterday, exceeded the market forecast of 45.8, it was unable to withstand the rise of the U.S. dollar. Since the GBP/USD pair is forming a descending flag on the hourly chart, traders should be on the lookout for a gradual decline to around 1.135 on a weekly basis.
Today, during European trading hours, Germany’s trade balance will be released at 16:00, France’s budget balance at 16:45, France’s manufacturing PMI at 17:50, and Germany’sunemployment rate at 16:45, the Eurozone Manufacturing PMI at 18:00, the U.S. MBA Mortgage Applications Index at 20:00, and the U.S. ADP Employment Report at 21:15. During U.S. trading hours, the U.S. weekly crude oil inventories will be released at 23:30,at 27:00, the U.S. FOMC policy rate decision and statement, remarks by German Bundesbank President Nagel, and at 27:30, a press conference by U.S. Federal Reserve Chair Powell. I plan to closely monitor the movement of the pound, which is facing resistance on the upside, while keeping a watchful eye on currency strength and weakness.
Author: Keisuke Sakurai
