Should We Keep an Eye on the Pound’s Upside Potential as the PMI Reaches High Levels?
22.02.2023
- U.S. 5-Year Treasury Auction
- Germany's Consumer Price Index
In the U.S. currency market yesterday, the U.S. dollar rose against the euro after the U.S. February Composite PMI, released yesterday, came in at 50.2—significantly exceeding the market forecast of 47.4 and surpassing the benchmark level of 50.The EUR/USD pair fell from 1.0696 to 1.0637, breaking below the upper boundary of the 4-hour downtrend line. From a technical perspective, the EUR/USD is declining as it is capped by the 4-hour 20-MA, so traders should be on guard for further declines during U.S. trading hours.
European currencies saw the pound rise against the Australian dollar following the release of improved PMI figures yesterday. The GBP/AUD pair rose by approximately 340 pips, from 1.7397 to 1.7740.During today’s Asian trading session, the pair continues to test the upside. Since GBP/AUD is showing a strong upward trend along the 10-period moving average on the hourly chart, we will monitor the price while keeping an eye out for RSI divergence.
Today, at 16:00 European time, Germany’s Consumer Price Index, Turkey’s Economic Sentiment Index, and Capacity Utilization Rate will be released; at 18:00, Germany’s IFO Business Climate Index; at 21:00, the U.S. MBA Mortgage Applications Index; and at 27:00 U.S. time, the U.S. 5-year Treasury auction;at 28:00, the release of the U.S. FOMC minutes, and at 7:30 the following day, remarks by U.S. Federal Reserve Bank of New York President Williams. We’ll be watching for upside momentum in the pound following the strong PMI reading.
Author: Keisuke Sakurai
