Will the U.S. dollar react to Fed Chair Powell’s remarks, or will the market remain cautious?
10.01.2023
- U.S. NFIB Small Business Optimism Index
- Remarks by U.S. Federal Reserve Chair Powell
In the previous day’s U.S. trading session, the U.S. dollar became the weakest currency, and the EUR/USD pair rose by approximately 120 pips from 1.0636 to 1.0760.EUR/USD continues its upward trend along the 20-period moving average on the hourly chart and has broken above the recent high of 1.0736 on the 4-hour chart. On the higher time frames—the daily and weekly charts—the RSI is just below 70, indicating room for further gains, so we will be watching for a decline in the US dollar during US trading hours.
Despite the fact that Germany’s November industrial production, released yesterday, came in at -0.4% year-on-year—missing the market forecast of 0.1%—the euro remained firm against the Australian dollar. The EUR/AUD pair rose from 1.53885 to 1.5537, recovering to just below the 20-period moving average on the 4-hour chart.On the daily chart, the 75-day moving average is acting as support, so we will be watching closely to see if the euro’s recent rebound will continue for the time being.
Today, at 16:00 CET, Turkey’s unemployment rate and industrial production will be released; at 16:45, France’s industrial production and manufacturing production index will be released; and at 18:30, the UK’sremarks by BOE Governor Bailey and remarks by BOC Governor Maclean, South African manufacturing production and the U.S. NFIB Small Business Optimism Index at 20:00, remarks by Fed Chair Powell at 23:00 U.S. time, U.S. wholesale inventories at 24:00, and a U.S. 3-year Treasury auction at 27:00.We will closely monitor whether Fed Chair Powell’s remarks cause the U.S. dollar to move.
Author: Keisuke Sakurai
