Concerns over further downside potential for the U.S. dollar against the euro

Concerns over further downside potential for the U.S. dollar against the euro

27.04.2023

In yesterday's U.S. currency trading, the U.S. dollar fell against the euro after the U.S. MBA Mortgage Applications Index, released yesterday, improved to 3.7% from the previous reading of -8.8%. The EUR/USD pair rose from 1.0968 to 1.1094, rebounding with support from the 75-period moving average (MA) on the 4-hour chart.On the daily chart, the EUR/USD pair continues to follow a solid uptrend along the 20-day moving average, and since no RSI divergence is observed, we should watch for further gains during European trading hours.

The euro rose against the yen after Germany’s GfK consumer confidence index, released yesterday, improved to -25.7 from -29.5 the previous month.The EUR/JPY pair rose from 146.454 to 147.881. It rebounded after touching the 75-period moving average on the 4-hour chart. The EUR/JPY is forming a triple top on the 4-hour chart, and the RSI is showing divergence. Therefore, we should be wary of a pullback during U.S. trading hours.

Today’s schedule includes Turkey’s Economic Confidence Index at 4:00 PM, the TCMB policy rate and statement at 8:00 PM, U.S. initial jobless claims, Q1 GDP, and personal consumption at 9:30 PM,U.S. Core PCE Deflator, U.S. Pending Home Sales at 11:00 PM, U.S. Weekly Natural Gas Inventories at 11:30 PM, U.S. Kansas City Fed Manufacturing Activity Index at 12:00 AM, and a U.S. 7-Year Treasury Auction at 2:00 AM. We should remain cautious about the downside potential for the U.S. dollar, which has fallen against the euro.