All eyes are on whether the euro, now the weakest currency, will rebound following the CPI release

All eyes are on whether the euro, now the weakest currency, will rebound following the CPI release

18.01.2023

Despite the New York Fed Manufacturing Index, released yesterday, coming in at -32.9%—a significant deterioration from the market forecast of -8.7%—the U.S. dollar strengthened against the euro. The EUR/USD pair fell by approximately 90 pips from 1.0868 to 1.0773. The price broke below the 75-period moving average (MA) on the hourly chart.Since the EUR/USD pair has broken well below the 20-period moving average on the 4-hour chart following yesterday’s decline during U.S. trading hours, traders should be wary of a continued downward move during European trading hours.

European currencies saw the euro become the weakest currency after Germany’s December consumer price index, released yesterday, came in at 8.6%, matching both the previous reading and market expectations. The euro-pound pair fell by approximately 110 pips from 0.8887 to 0.8773.It plummeted to just below the 200-period EMA on the 4-hour chart. On the daily chart, the RSI has been falling following a divergence from the 70 level, so we should watch to see if the pair will drop to around 0.8724, near the daily 75-period MA line.

Today’s schedule includes the UK Consumer Price Index and UK Retail Price Index at 4:00 PM, the Eurozone Consumer Price Index at 7:00 PM, the US MBA Mortgage Applications Index at 9:00 PM, US Retail Sales and US Producer Price Index at 10:30 PM, and remarks by Atlanta Fed President Bostic at 11:00 PM:Atlanta Fed President Bostic’s remarks, at 11:15 PM: US Industrial Production and US Capacity Utilization, at 12:00 AM: US Business Inventories, at 3:00 AM: US 20-Year Treasury Auction, and at 4:00 AM: US Beige Book and US Philadelphia Fed President Harker’s remarks. We will be watching to see if the euro, which has become the weakest currency, recovers following the CPI release.

Past Market Reports

1. 21.04.2026New

   Will interest grow in the upside potential of the Swiss franc, which has risen against the yen?

2. 20.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

3. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

4. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

5. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

6. 14.04.2026

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

7. 13.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

8. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

9. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

10. 08.04.2026

    Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?