All eyes are on whether the euro, now the weakest currency, will rebound following the CPI release.
18.01.2023
- Bostic (U.S.): Remarks by the President of the Atlanta Federal Reserve Bank
- European Consumer Price Index (CPI)
In U.S. currency trading the previous day, the U.S. dollar strengthened against the euro despite the New York Fed’s Manufacturing Index—released yesterday—deteriorating significantly from the market forecast of -8.7% to -32.9%.The EUR/USD pair fell by about 90 pips from 1.0868 to 1.0773. The price closed below the 75-period moving average (MA) on the hourly chart. Since the EUR/USD pair fell significantly below the 20-period MA on the 4-hour chart during yesterday’s U.S. trading session, traders should be wary of a continued decline during European trading hours.
Among European currencies, the euro became the weakest 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 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 75 MA line.
Today’s schedule includes the UK Consumer Price Index and UK Retail Price Index at 16:00, the Eurozone Consumer Price Index at 19:00, the US MBA Mortgage Applications Index at 21:00, US Retail Sales at 22:30,U.S. Producer Price Index, at 11:00 PM a statement by U.S. Atlanta Fed President Bostic, at 11:15 PM U.S. Industrial Production and U.S. Capacity Utilization, at 12:00 AM U.S. Business Inventories,at 27:00, the U.S. 20-year Treasury auction; at 28:00, the U.S. Beige Book and remarks by Harker, President of the Federal Reserve Bank of Philadelphia. It will be interesting to see if the euro, which has become the weakest currency, will recover following the CPI release.
Author: Keisuke Sakurai
