All eyes are on whether the euro-dollar pair, which appeared poised to break below a key level, will maintain its upward momentum

All eyes are on whether the euro-dollar pair, which appeared poised to break below a key level, will maintain its upward momentum

07.11.2022

In the U.S. currency markets last weekend, the U.S. dollar became the weakest currency after the October employment report released on Friday, the 4th, showed the unemployment rate rising to 3.7% from 3.5% the previous month. The USD/JPY pair fell by just under 2 yen, from 148.390 to 146.554.Technically, the pair broke below a descending pennant that had formed during the downtrend on the 4-hour chart, extending its decline. Since it did not reach the 61.8% Fibonacci retracement level drawn from the recent high and low, caution is advised regarding further downside movement.

European currencies saw limited downside as the Eurozone and German services PMI figures released last Friday matched market expectations; coupled with weakness in the U.S. dollar, the EUR/USD pair rose 200 pips from 0.9755 to 0.9966.Although the EUR/USD pair briefly dipped below the retest level of its downtrend line, it recovered and broke above the recent 4-hour high of 0.9912 with a real body candle. We will be watching for further upside momentum and the direction of the trend.

Today’s schedule includes: Switzerland’s unemployment rate at 3:45 PM, Germany’s industrial production and the UK’s Halifax house price index at 4:00 PM, Norway’s manufacturing production at 4:00 PM, Switzerland’s foreign exchange reserves at 5:00 PM, Hong Kong’s foreign exchange reserves at 5:30 PM,17:40: Remarks by ECB President Lagarde (EU), 18:30: Investor Sentiment Index (EU), 25:30: 6-month Treasury bill auction (US), 29:00: Consumer credit balance (US), and 29:40: Remarks by Mester, President of the Cleveland Fed (US). I intend to watch the market cautiously to see if the EUR/USD pair, which appeared poised to break below support, can maintain its rebound momentum.