All eyes are on whether the U.S. dollar can rebound on the day before the FOMC meeting
21.03.2023
- U.S. 20-Year Treasury Auction
- ZEW Economic Sentiment Survey (Europe)
In the previous day’s U.S. trading session, the U.S. dollar weakened as U.S. trading hours progressed. The USD/JPY pair fell by approximately 2 yen, from 132.627 to 130.539, forming a downtrend along the 20-period moving average (MA) on the hourly chart.On the higher-time-frame 4-hour chart, the pair is extending its decline as it faces resistance at the 10-period moving average. During today’s Asian session, the downside has been heavy, with price action attempting to rebound. Ahead of tomorrow’s FOMC meeting, we will be watching closely to see if the U.S. dollar can recover and move higher.
European currencies rose against the U.S. dollar as the euro gained strength following remarks yesterday by ECB President Lagarde that “price stability and financial stability are compatible.”The EUR/USD pair rose by about 100 pips, from 1.0630 to 1.0730. It is extending its gains, supported on the downside by the daily 200 EMA. Since yesterday’s rally pushed the EUR/USD well above the 4-hour 200 SMA, it will be interesting to see if the pair continues to rise after a correction.
Today, during European trading hours, the Swiss trade balance will be released at 16:00, followed by Hong Kong’s overall balance at 17:30, Poland’s retail sales at 18:00, and at 19:00, the GermanZEW Economic Sentiment Survey, and the Eurozone ZEW Economic Sentiment Survey are scheduled for today during European trading hours. During U.S. trading hours, the Canadian Consumer Price Index is scheduled for 21:30, followed by remarks from ECB President Lagarde at 23:00, U.S. Existing Home Sales at 23:00, and a U.S. 20-year Treasury auction at 26:00.We will be closely monitoring price movements to see if the U.S. dollar can recover on the eve of the FOMC meeting.
Author: Keisuke Sakurai
