Concerns Over Further Declines in the Euro Amid Weak Economic Indicators
08.02.2023
- Remarks by U.S. Federal Reserve Vice Chair Bar
- U.S. MBA Mortgage Applications Index
In the U.S. currency market the previous day, the U.S. dollar was the weakest currency despite comments from Fed Chair Powell regarding further rate hikes. The EUR/USD pair rebounded by just over 90 pips, rising from 1.0669 to 1.0765.It recovered the ground it had lost after moving below the 200-period SMA on the 4-hour chart. However, on the daily chart, the EUR/USD pair has been trending lower since its RSI touched 70, so we need to carefully assess whether this rebound will continue.
European currencies fell sharply against the yen after Germany’s December industrial production figures, released yesterday, came in at -3.1%—significantly worse than the market forecast of -1.9%.The EUR/JPY pair fell by about 2 yen, from 142.327 to 140.285, and broke below the 20-period moving average on the 4-hour chart. From a technical perspective, since the ±3σ lines of the daily Bollinger Bands for EUR/JPY are pointing downward, investors should remain cautious about a continued decline.
Today’s schedule includes the U.S. MBA Mortgage Applications Index at 21:00, remarks by U.S. Federal Reserve Bank of New York President Williams at 23:15, remarks by U.S. Federal Reserve Governor Cook at 23:30, U.S. Wholesale Inventories at 24:00,remarks by U.S. Federal Reserve Vice Chair Barr, remarks by U.S. Atlanta Fed President Bostic, U.S. weekly crude oil inventories at 24:30, remarks by U.S. Minneapolis Fed President Kashkari at 26:30,President of the Minneapolis Fed, at 27:00, a U.S. 10-year Treasury auction, and at 27:45, remarks by U.S. Federal Reserve Governor Waller. Investors should remain cautious about further downside potential for the euro, which has been falling due to weak economic indicators.
Author: Keisuke Sakurai
