Be on High Alert for Volatile Currency Movements Following the U.S. Policy Rate Announcement
01.02.2023
- Press Conference by U.S. Federal Reserve Chair Powell
- U.S. FOMC Policy Rate & Statement Announcement
In the U.S. currency market the previous day, the U.S. dollar weakened against the euro, causing the euro/dollar pair to rise.The EUR/USD pair rebounded from 1.0802 to 1.0874, rising to just below the 200-period simple moving average (SMA) on the hourly chart. On the 4-hour chart, the EUR/USD pair has stalled as its upside is capped by the 20-period moving average (MA). We will be watching to see if the euro’s upward momentum continues following today’s FOMC meeting.
Among European currencies, the Swiss franc emerged as the strongest, with the CHF/JPY pair rising nearly 2 yen from 140.375 to 142.233.Following yesterday’s rise, the CHF/JPY pair has completely broken above the daily 20-day moving average (MA) with a real body candle, and the daily RSI has shifted to an upward trend. However, since the pair remains below the 20-day MA on the weekly chart, we need to carefully assess the direction of the market to see if a pullback will occur during today’s U.S. trading hours.
Today’s economic indicators include the UK Nationwide House Price Index at 16:00, the Swiss Manufacturing PMI at 17:30, the UK Manufacturing PMI at 18:30, the EurozoneConsumer Price Index at 19:00, the U.S. MBA Mortgage Applications Index at 21:00, the U.S. ADP National Employment Report at 22:15, the U.S. ISM Manufacturing PMI and U.S. JOLTS Job Openings at 24:00, U.S. weekly crude oil inventories at 24:30,at 28:00, the U.S. FOMC policy rate decision and statement, and at 28:30, a press conference by Fed Chair Powell. We should be fully prepared for currency volatility as the U.S. policy rate announcement takes place.
Author: Keisuke Sakurai
