Will the market take a wait-and-see approach to the U.S. dollar's movements at the start of the week?

Will the market take a wait-and-see approach to the U.S. dollar's movements at the start of the week?

16.01.2023

Last weekend, the U.S. dollar showed strength against the Canadian dollar, with the USD/CAD pair rebounding by approximately 120 pips from 1.3320 to 1.3438.The USD/CAD pair had been in a downtrend on the 4-hour chart since January 3, the start of the year, but last weekend’s rebound pushed the pair above the 20-period moving average (MA). However, as the U.S. dollar has once again become the weakest currency during today’s Asian trading session, traders should remain cautious about the downside potential for USD/CAD.

Among European currencies, the euro saw mixed trading against the U.S. dollar, with the EUR/USD pair ranging between 1.0779 and 1.0867.However, during Asian trading hours at the start of the week, the euro strengthened against the U.S. dollar, hitting a new high for the year. The EUR/USD pair is currently trading around 1.0868, and given its strong upward momentum, we will be closely monitoring the euro’s price movements as we move into European trading hours.

Today, Japan’s machine tool orders will be released at 15:00 during Asian trading hours, followed by Norway’s trade balance at 16:00 during European trading hours, France’s fiscal balance at 16:45,at 8:00 p.m. the total reserve assets for the Eurozone, at 10:00 p.m. the Philippine Consumer Price Index, at 10:30 p.m. (U.S. time) Canadian manufacturing shipments, at 11:00 p.m. Canadian existing home sales, and at midnight a speech by Bank of England Governor Bailey.With a series of remarks from key U.S. officials scheduled for this week, I would like to start by carefully monitoring the U.S. dollar’s price movements at the beginning of the week.