Caution Over Upside Potential for the Euro, Which Is Gaining Ground on the Back of Hawkish Comments from Key Figures
17.02.2023
- U.S. - Birkin: Remarks by the President of the Richmond Fed
- France: Consumer Price Index
In the U.S. currency market yesterday, the U.S. dollar strengthened after the U.S. January Producer Price Index, released yesterday, came in at 6.0%—above the market forecast of 5.4%. The EUR/USD pair fell from 1.0721 to 1.0655.The decline took the pair from the 10-day moving average on the daily chart down to the -2σ level of the Bollinger Bands. Technically, the EUR/USD pair has continued to decline during today’s Asian trading session, and since the daily RSI has fallen from a high of 70 to around 40, traders should be wary of a continued decline into the U.S. trading session.
European currencies saw the euro surge against the pound yesterday after German Central Bank President Nagel stated that “interest rates have not yet reached a restrictive level.” The euro/pound pair rose from 0.8871 to 0.8908.The rise was supported by the 10-day moving average (MA) on the daily chart. On the 4-hour chart, the RSI has not yet reached 70, indicating there is still room for further gains; therefore, we need to carefully assess whether the euro will continue to strengthen against the pound.
Today’s economic indicators include UK retail sales, German producer price index, and Turkish home sales at 16:00; the French consumer price index at 16:45; the Eurozone current account balance at 18:00;at 10:30 PM: U.S. Import Price Index, U.S. Export Price Index, Canada’s International Securities Turnover, Canada’s Industrial Product Prices, U.S. Birkin:Richmond Fed President’s remarks; at 10:30 p.m., remarks by U.S. Federal Reserve Governor Bowman; at midnight, the U.S. Leading Economic Index; and at 1:00 a.m., Russia’s real GDP. We will carefully monitor the upside potential for the euro, which has been strengthening on the back of hawkish comments from key officials.
Author: Keisuke Sakurai
