Be on high alert for sharp fluctuations in currency strength following the U.S. policy rate announcement
01.02.2023
- Press Conference by Federal Reserve Chair Powell
- U.S. FOMC Policy Rate & Statement Release
In yesterday's U.S. currency trading, the U.S. dollar weakened against the euro, causing the EUR/USD pair to rise. The EUR/USD rebounded from 1.0802 to 1.0874, climbing just below the 200-period simple moving average (SMA) on the hourly chart. On the 4-hour chart, the EUR/USD 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, and the daily RSI has shifted to an upward trend. However, since it remains below the 20-day MA on the weekly chart, we need to carefully assess the direction 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 4:00 PM, the Swiss Manufacturing PMI at 5:30 PM, the UK Manufacturing PMI at 6:30 PM, the Eurozone Consumer Price Index at 7:00 PM, the US MBA Mortgage Applications Index at 9:00 PM, the US ADP National Employment Report at 10:15 PM,at 12:00 AM: US ISM Manufacturing PMI and US JOLTS Job Openings, at 12:30 AM: US Weekly Crude Oil Inventories, at 4:00 AM: US FOMC Interest Rate Decision and Statement, and at 4:30 AM: US Federal Reserve Chair Powell’s press conference. We must remain highly vigilant for periods of extreme volatility in currency strength following the US interest rate announcement.
Author: Keisuke Sakurai
