Market Participants May Be Carefully Monitoring the Downside Potential of the Euro, Which Is Facing Resistance on the Upside
21.12.2022
- U.S. Existing-Home Sales
- U.S. Weekly Crude Oil Inventories
In U.S. currency trading the previous day, the euro/dollar rose slightly as the Dollar Index fell to 104.1. The euro/dollar rose from 1.0577 to 1.0658.The pair rebounded, finding support at the 200-period SMA on the hourly chart. However, on the 4-hour chart, a range-bound market centered around the 20-period MA continues, and the pair still lacks a clear direction. Since the pair has not fallen below the 10-period MA on the daily chart, we will monitor the situation closely to determine whether this represents a mid-range consolidation within an ongoing uptrend.
European currencies fell as the euro weakened against the pound after Germany’s November Producer Price Index (PPI), released yesterday, came in at -3.9%, below the market forecast of -1.8%. The euro/pound pair fell from 0.8771 to 0.8714.The decline halted as the pair found support at the 4-hour 20-MA. From a technical perspective, a divergence has emerged on the 4-hour RSI for the EUR/GBP pair, so traders should be wary of a break below the 4-hour 20-MA that could trigger further declines.
Today’s schedule includes the German GfK Consumer Confidence Survey at 16:00 European time, the UK CBI Retail Trade Survey at 20:00, and the U.S. MBA Mortgage Applications Index at 21:00, followed by the Canadian Consumer Price Index and the U.S. Third-Quarter Current Account Balance at 22:30 U.S. time,at 24:00, the U.S. Consumer Confidence Index and Existing Home Sales; at 24:30, U.S. Weekly Crude Oil Inventories; and at 27:00, a U.S. 20-Year Treasury Auction. We will carefully monitor the downside potential for the euro, which is facing resistance on the upside.
Author: Keisuke Sakurai
