All eyes are on the euro, which has been under pressure from the U.S. dollar since the release of the U.S. jobs report

All eyes are on the euro, which has been under pressure from the U.S. dollar since the release of the U.S. jobs report

07.02.2023

In the U.S. currency market yesterday, the Canadian dollar weakened against the U.S. dollar following the release of Canada’s January Ivey Purchasing Managers’ Index, which came in at 60.1.The USD/CAD pair rose by approximately 80 pips from 1.3396 to 1.3475, hitting a new high for the month. Although the USD/CAD pair has been gaining momentum this month, the weekly RSI remains above 70, and the reversal pattern has not yet broken down, so caution is warranted regarding a potential decline following this rally.

European currencies fell against the U.S. dollar yesterday following the release of December retail sales data, which showed a widening decline. The EUR/USD pair dropped by approximately 90 pips from 1.0798 to 1.0709. The price broke below the 200-period SMA on the 4-hour chart with a bearish candle.On the daily chart, the RSI for EUR/USD is at 50, a midpoint, leaving room for further downside, so traders should be cautious of additional declines.

Today’s economic indicators include German industrial production and UK Halifax house prices at 16:00, the French trade balance at 16:45, remarks by BOE Deputy Governor Ramsden at 18:00, remarks by MPC member Pill at 19:15, the Canadian and U.S. trade balances at 22:30,at 24:00, remarks by Bank of England Deputy Governor Canrif; at 26:30, remarks by Bank of Canada Governor McClean; at 26:40, remarks by Federal Reserve Chair Powell; at 27:00, a U.S. 3-year Treasury auction; and at 28:00, remarks by Federal Reserve Vice Chair Barr.We will be watching the euro closely to see how it fares, as it has been under pressure from the US dollar since the release of the US jobs report.