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

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

07.02.2023

In U.S. currency trading yesterday, the Canadian dollar weakened against the U.S. dollar after Canada’s January Ivey Purchasing Managers’ Index was released at 60.1.The USD/CAD pair rose by about 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 reversal from an RSI reading above 70 on the weekly chart has not yet been broken, so traders should remain cautious of a potential pullback following this rally.

Among European currencies, the euro fell against the U.S. dollar after yesterday’s release of December retail sales data showed that the decline had widened. The EUR/USD pair fell by about 90 pips from 1.0798 to 1.0709. The price broke below the 200-period SMA on the 4-hour chart with a real body candle and continued its downward movement.On the daily chart, the RSI for the EUR/USD pair is at 50—a midpoint—leaving room for further downside, so traders should remain cautious about the possibility of additional declines.

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