Market Participants to Watch for the Direction of the U.S. Dollar Following Stronger-than-Expected Economic Data
27.03.2023
- Remarks by Nagel, President of the German Federal Bank
- Dallas Fed Manufacturing Conditions Index
In the U.S. currency markets last weekend, the U.S. dollar strengthened against the euro despite a decline in February durable goods orders—which went against market expectations—because the March Composite PMI (Purchasing Managers’ Index), released on the same day, came in at 53.3, remaining above the benchmark of 50.The EUR/USD pair fell from 1.0837 to 1.0714, finding support at the 200-period SMA on the hourly chart. On the 4-hour chart, the 75-period MA is acting as support, while on the daily chart, the 200-period SMA through the 10-period MA forms a “perfect order.”Since no particular divergence is visible on the weekly RSI either, we should keep an eye on the strength of the U.S. dollar.
European currencies fell against the U.S. dollar as the British pound weakened following the release on the 24th of the preliminary February UK Manufacturing and Services PMI figures, which showed a decline from the previous month. The GBP/USD pair fell from 1.2291 to 1.2191, dropping to the -2σ level of the 4-hour Bollinger Bands.From a technical perspective, since a divergence has formed after the RSI exceeded 70, caution is warranted regarding the possibility of a full-fledged pullback.
Today's economic indicators include Sweden's trade balance at 3:00 p.m.,Turkey’s Capacity Utilization Rate at 16:00, Germany’s Ifo Business Climate Index at 17:00, remarks by Nagel, President of the German Federal Bank, at 17:30, Israel’s Unemployment Rate at 19:00, the UK’s CBI Retail Sales at 20:00,Mexico’s trade balance at 20:00, the Dallas Fed Manufacturing Index at 23:30, the U.S. 2-year Treasury auction at 24:30, remarks by Bank of England Governor Bailey at 02:00, and remarks by Federal Reserve Governor Jefferson at 06:00 the following day.I want to carefully monitor the direction of the U.S. dollar following the release of these economic indicators, particularly if they come in stronger than expected.
Author: Keisuke Sakurai
