All eyes are on whether the U.S. dollar will strengthen following the release of the University of Michigan Consumer Sentiment Index

All eyes are on whether the U.S. dollar will strengthen following the release of the University of Michigan Consumer Sentiment Index

12.05.2023

In U.S. currency trading the previous day, the U.S. dollar rose against the euro after the U.S. April Producer Price Index, released yesterday, came in at 2.3% year-over-year, marking its 10th consecutive monthly decline. The EUR/USD pair fell by just under 100 pips from 1.0997 to 1.0900.The pair broke below the 20-day moving average on the daily chart. The EUR/USD is declining following a divergence just shy of 70 on the daily RSI, and the 4-hour RSI still has room to fall toward 30. We should watch closely to see if economic data releases during U.S. trading hours will trigger further declines in the EUR/USD.

Among European currencies, the Swiss franc fell against the U.S. dollar. The USD/CHF pair rose by approximately 808 pips, from 0.8873 to 0.8957.The pair has broken above the 20-period moving average (MA) on the 4-hour chart. On the higher-timeframe daily chart, USD/CHF has broken above the 20-period MA and is trending higher, with successive higher lows. We will be watching closely to see if the Swiss franc’s strength will pause and allow the U.S. dollar to stage a comeback.

Today’s schedule includes the UK’s first-quarter GDP, industrial production, manufacturing output, and trade balance at 15:00; France’s Consumer Price Index at 15:45; remarks by Fed Governor Bowman at 16:00; and at 20:15, remarks by a member of the UK’sMPC Member Pill is scheduled to speak at 20:15, India’s Consumer Price Index at 21:00, U.S. Import and Export Price Indices at 21:30, the University of Michigan Consumer Sentiment Index at 23:00, and remarks by San Francisco Fed President Daily at 27:20.I’d like to wait and see cautiously whether the U.S. dollar will strengthen following these economic indicator releases in U.S. time.