Concerns over further downside potential for the euro following the news from Poland
16.11.2022
- U.S. MBA Mortgage Applications Index
- Remarks by U.S. Federal Reserve Vice Chair Bar
In the previous day’s U.S. currency trading, the U.S. dollar faced upward pressure as the U.S. Producer Price Index (PPI) fell sharply year-over-year to 8.0% from the previous month’s 8.5%. The USD/JPY pair fell as low as 137.672 at one point.This marked the lowest level since August 29 of this year. While the decline in USD/JPY has been notable, on a weekly chart, the 20-day moving average (MA) is acting as resistance, capping the upside. Unless the RSI divergence on the weekly chart resolves, we should remain cautious about further downside.
European currencies saw the euro weaken further against a US dollar that remained under pressure. Yesterday, the euro plummeted after a missile struck Poland, killing two people. The EUR/USD pair fell by approximately 200 pips from 1.0481 to 1.0282. However, today the pair rebounded as it found support at the 20-period moving average on the 4-hour chart, so we will be watching closely to see if it recovers during European trading hours.
Today’s schedule includes the UK Consumer Price Index at 4:00 PM, the US MBA Mortgage Applications Index at 9:00 PM, Canadian Housing Starts at 10:15 PM, the Canadian Consumer Price Index and US Retail Sales at 10:30 PM,US Import Price Index, UK BOE Governor Bailey’s remarks at 11:15 PM, US Industrial Production, NY Fed President Williams’ remarks at 11:50 PM, US Business Inventories at 12:00 AM,US Fed Vice Chair Barre’s remarks, 24:30 US weekly crude oil inventories, 26:00 Eurozone ECB President Lagarde’s remarks, 27:00 US 20-year Treasury auction, and 28:35 US Fed Vice Chair Waller’s remarks are scheduled. We should remain cautious about the downside potential for the euro, which fell following the news from Poland.
Author: Keisuke Sakurai
