Market participants are cautiously monitoring the upside potential of the pound, which has become the strongest currency

Market participants are likely to closely monitor the upside potential of the pound, which has become the strongest currency

15.02.2023

In the previous day’s U.S. currency trading, the U.S. dollar rose after the January U.S. CPI came in higher than market expectations at 6.4% year-on-year.The AUD/USD pair fell from 0.7029 to 0.6921. The decline came after the pair touched the +3σ line of the 4-hour Bollinger Bands. Since the start of this month, AUD/USD has been trading in a range between 0.6868 and 0.7010, and on the daily chart, price action is currently searching for direction just below the 20-day moving average. Therefore, we should pay close attention to the strength or weakness of the market heading into the latter half of the week.

Among European currencies, the pound rose against the yen after the fourth-quarter unemployment rate was released yesterday, coming in at 3.7%. GBP/JPY rose from 160.114 to 162.160, following the 10-period moving average on the hourly chart. The 4-hour RSI reached 74.Although GBP/JPY is rising with the 4-hour RSI above 70, no RSI divergence has occurred, so we should watch for a continued rise during European trading hours.

Today’s schedule includes the UK Consumer Price Index, UK Retail Price Index, and UK Producer Price Index at 4:00 PM; the South African Consumer Price Index at 5:00 PM; Eurozone Industrial Production and the Eurozone Trade Balance at 7:00 PM; the US MBA Mortgage Applications Index at 9:00 PM; and Canada’shousing starts, at 10:30 PM the US NY Fed Manufacturing Index and US Retail Sales, as well as Canadian Wholesale Sales, at 11:00 PM remarks by ECB President Lagarde and Canadian Existing Home Sales, at 11:15 PM US Industrial Production, and at 3:00 AM the US 20-year Treasury auction.We will closely monitor the upside potential of the pound, which has become the strongest currency.