All eyes are on whether the weekend trend of widespread U.S. dollar buying will continue
27.02.2023
- U.S. Existing Home Sales Pending
- Eurozone Consumer Confidence Index (Final Reading)
Last weekend, the U.S. dollar saw buying pressure following the release of strong U.S. January personal income data. The EUR/USD pair fell by approximately 80 pips from 1.0614 to 1.0535, reaching the lower boundary of the downtrend line on the 4-hour chart.On the daily chart, the EUR/USD has fallen just below the 200-day EMA, and the daily RSI has not yet reached 30, indicating that there is still room to fall. We need to assess whether the pair will extend its decline to around 1.0480, which is the 38.2% Fibonacci retracement level of the recent rally.
Among European currencies, the pound came under pressure from a strengthening U.S. dollar, causing the GBP/USD pair to decline. GBP/USD fell by approximately 110 pips from 1.2041 to 1.1928. The decline was driven by momentum that brought the pair close to this year’s low.GBP/USD is currently trading just below the daily 200-day SMA. If it breaks below the 200-day SMA, the next major support zone is around 1.1841, so we will be watching closely to see if a rebound occurs in this area.
Today, at 4:00 p.m. CET, we have Turkey’s trade balance and economic confidence, Norway’s retail sales,at 18:00, remarks by BOE Deputy Governor Broven; at 19:00, the Eurozone Consumer Confidence Index; and during U.S. trading hours at 22:30, Canada’s Q4 Current Account and U.S. Durable Goods Orders; at 24:00, U.S. Pending Home Sales; and at 24:30, the U.S. Dallas Fed Manufacturing Activity Index and remarks by Federal Reserve Governor Jefferson.We will be watching closely to see if the weekend trend of broad-based US dollar buying continues.
Author: Keisuke Sakurai
