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 higher than the market forecast of 47.4—and exceeded 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 while being capped by the 4-hour 20-period moving average (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 on RSI divergence.
Today, the German Consumer Price Index, Turkey’s Economic Sentiment Index, and Capacity Utilization Rate are scheduled for release at 16:00 European time; the German IFO Business Climate Index at 18:00; the U.S. MBA Mortgage Applications Index at 21:00; the U.S. 5-year Treasury auction at 27:00 U.S. time;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 will be watching for upside momentum in the pound, given the strong PMI readings.
Author: Keisuke Sakurai
