Investors may be wary of further downside potential for the euro, which has been weakening against the Oceania currencies

Investors may be wary of further downside potential for the euro, which has been weakening against the Oceania currencies

09.05.2023

In the previous day's U.S. currency trading, the U.S. dollar edged slightly higher against the euro, causing the EUR/USD pair to decline.The EUR/USD pair fell from 1.1053 to 1.0998, breaking below the 75-period moving average on the 4-hour chart. Technically, while the daily RSI is showing a downward trend just below the 70 level, the candlesticks are forming a bullish divergence by making higher highs. We will be watching closely to see if the US dollar strengthens against the euro heading into the latter half of the week.

European currencies fell against the Australian dollar after Germany’s 2024 real economic growth forecast, released yesterday, was revised downward to 1.3% from the previous month. The EUR/AUD pair dropped by approximately 140 pips, from 1.6351 to 1.66205.The downward trend has continued into today’s Asian session. Since the EUR/AUD pair has been falling after touching the RSI 70 on the weekly chart, it will be worth watching whether the decline against the Australian dollar continues.

Today, during Asian trading hours, the UK Halifax House Price Index will be released at 15:00, followed by the Frenchtrade balance, and the current account balance, followed by the U.S. NFIB Small Business Optimism Index at 19:00 during European trading hours, Mexico’s Consumer Price Index and Producer Price Index at 21:00, remarks by U.S. Federal Reserve Governor Jefferson at 21:30 during U.S. trading hours, remarks by U.S. Federal Reserve Bank of New York President Williams at 25:05, and a U.S. 3-year Treasury auction at 26:00.We should be cautious about the downside potential for the euro, which is trading weak against the Oceania currencies.