Should We Carefully Monitor the Upside Potential of the Pound, Now the Strongest Currency?
15.02.2023
- Remarks by ECB President Lagarde
- U.S. New York Fed Manufacturing Index
In the U.S. currency market yesterday, the U.S. dollar rose after the January U.S. CPI came in higher than market expectations at 6.4% year-over-year. The AUD/USD pair fell from 0.7029 to 0.6921, pulling back after touching the +3σ line of the 4-hour Bollinger Bands.Since the start of this month, the AUD/USD pair has been trading in a range between 0.6868 and 0.7010, and on the daily chart, it is moving just below the 20-day moving average (MA), searching for direction. Therefore, traders should pay close attention to whether the pair strengthens or weakens as the week progresses.
Among European currencies, the pound rose against the yen after yesterday’s release of the fourth-quarter unemployment rate, which came in at 3.7%. The GBP/JPY pair rose from 160.114 to 162.160, tracking 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 keep an eye on whether the upward trend continues during European trading hours.
Today, at 4:00 p.m., the UK Consumer Price Index, UK Retail Price Index, and UK Producer Price Index will be released; at 5:00 p.m., the South African Consumer Price Index; and at 7:00 p.m., the EurozoneIndustrial Production, and the EU Trade Balance; at 9:00 PM, the U.S. MBA Mortgage Applications Index; at 10:15 PM, Canadian Housing Starts; at 10:30 PM, the U.S. NY Fed Manufacturing Index, U.S. Retail Sales, and Canadian Wholesale Sales;at 11:00 PM: Remarks by ECB President Lagarde, Canadian Existing Home Sales; at 11:15 PM: U.S. Industrial Production; and at 3:00 AM: U.S. 20-Year Treasury Auction. We will carefully monitor the upside potential of the pound, which has become the strongest currency.
Author: Keisuke Sakurai
