Concerns Over Further Euro Declines Following Developments in Poland
16.11.2022
- U.S. MBA Mortgage Applications Index
- Remarks by U.S. Federal Reserve Vice Chair Bar
In the U.S. currency market the previous day, the U.S. dollar faced upward pressure as the U.S. Producer Price Index (PPI) fell significantly year-over-year to 8.0% from the previous month’s 8.5%. The USD/JPY pair briefly fell to 137.672.This marked the lowest level since August 29 of this year. While the decline in USD/JPY has been notable, on the weekly chart, the 20-day moving average (20MA) is acting as resistance, capping further gains. As long as the RSI divergence on the weekly chart remains unresolved, investors should remain cautious about further downside.
Among European currencies, the euro weakened further against the U.S. dollar, which remained under upward pressure. Yesterday, the euro plummeted after a missile struck Poland, killing two people.The EUR/USD pair fell by about 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 16:00, the US MBA Mortgage Applications Index at 21:00, Canadian Housing Starts at 22:15, the Canadian Consumer Price Index and US Retail Sales at 22:30,U.S. Import Price Index, at 23:15: remarks by Bank of England Governor Bailey and U.S. Industrial Production, at 23:50: remarks by New York Fed President Williams, at 24:00: U.S. Business Inventories,Remarks by U.S. Federal Reserve Vice Chair Bar; U.S. weekly crude oil inventories at 24:30; remarks by ECB President Lagarde at 26:00; U.S. 20-year Treasury auction at 27:00; and remarks by U.S. Federal Reserve Vice Chair Waller at 28:35.We should remain cautious about the downside potential for the euro, which fell following the news from Poland.
Author: Keisuke Sakurai
