Will there be end-of-month rebalancing activity following the ECB Forum, or will the market remain on the sidelines?
29.06.2023
- U.S. First-Quarter GDP
- U.S. Initial Unemployment Insurance Claims
In U.S. currency trading the previous day, the U.S. dollar rose slightly against the yen after Federal Reserve Chair Powell stated at the ECB Forum held yesterday that “the year-over-year increase in the core index is unlikely to fall to 2% until 2025 or later,” signaling a continued stance toward interest rate hikes.The USD/JPY pair rose from 143.271 to 144.616, setting a new high for the year. As the pair continues to find support at the 10-period moving average on the 4-hour chart during today’s Asian session, we will be watching price action closely during the European session.
European currencies saw the euro fall against the U.S. dollar after Germany’s July GfK Consumer Confidence Index, released yesterday, came in at -25.4—a further decline from the previous month’s -24.2. The EUR/USD pair fell by about 70 pips from 1.0961 to 1.0897.This move effectively offset the gains seen the day before yesterday. Since the EUR/USD pair has already broken below the 75-period moving average (MA) on the 4-hour chart, traders should be on guard for further declines during European trading hours.
Today’s schedule includes remarks by U.S. Federal Reserve Chair Powell at 3:30 p.m., the ECB’s monthly report at 5:00 p.m., U.K. consumer credit balances at 5:30 p.m., and at 6:00 p.m., theConsumer Confidence Index, at 6:30 PM the South African Producer Price Index, at 9:00 PM the German Consumer Price Index, at 9:30 PM U.S. Initial Jobless Claims, U.S. Q1 GDP, U.S. Personal Consumption Expenditures, and U.S. Pending Home Sales,at 23:30: U.S. weekly natural gas inventories; at 25:30: remarks by MPC member Tenreyro (UK); and at 28:00: remarks by Bostic, President of the Atlanta Fed. I intend to carefully monitor currency strength and weakness to see if end-of-month rebalancing activity occurs.
Author: Keisuke Sakurai
