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 the U.S. currency market 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 inflation rate 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 fell as the euro weakened 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 euro/dollar pair fell by about 70 pips from 1.0961 to 1.0897.This move effectively offset the gains made 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 15:30, the ECB’s monthly report at 17:00, U.K. consumer credit balances at 17:30, theConsumer Confidence Index at 17:30, South Africa’s Producer Price Index at 18:30, Germany’s Consumer Price Index at 21:00, U.S. Initial Jobless Claims, U.S. First-Quarter GDP, U.S. Personal Consumption Expenditures, and U.S. Pending Home Sales at 21:30,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 (U.S.). I intend to carefully monitor currency strength and weakness to see if end-of-month rebalancing activity occurs.
Author: Keisuke Sakurai
