Attention is turning to the upside potential of the euro, which has risen against the U.S. dollar

Attention is turning to the upside potential of the euro, which has risen against the U.S. dollar

31.07.2023

Last weekend, the U.S. dollar fell against the pound after the final reading of the University of Michigan’s July Consumer Sentiment Index, released on the 28th, was revised downward from the previous reading of 72.6 to 71.6, falling short of market expectations of 72.6. The GBP/USD pair rose by approximately 120 pips from 1.2762 to 1.2886.This prevented the pair from hitting a new low for the month. However, on the daily chart, GBP/USD remains below the 20-day moving average, and with the RSI trending downward, we should remain cautious of a bearish bias until the pair makes new highs and lows based on Dow Theory.

Despite the fact that Germany’s July consumer price index (CPI), released last weekend, fell to 6.2% year-on-year from 6.4% the previous month, the euro rose against the U.S. dollar.The EUR/USD pair rose by approximately 100 pips, from 1.0943 to 1.1046. The downtrend below the 20-period moving average (MA) on the hourly chart has paused, and the pair has rebounded back above the 20-MA. On the higher timeframe weekly chart, the pair has pulled back after encountering resistance at the 200-period simple moving average (SMA), so we will be watching closely to see if this pullback continues this week.

Today’s schedule includes German retail sales and the German import price index at 3:00 PM, South African money supply at 3:30 PM, Swiss retail sales at 5:30 PM, UK consumer credit at 6:00 PM, Eurozone Q2 real GDP and the Eurozone consumer price index at 6:00 PM, and South African trade balance at 9:00 PM.Mexico’s Q2 real GDP, at 10:45 PM the US Chicago PMI, and at 11:30 PM the US Dallas Fed Manufacturing Activity Index. We will be watching for upside potential in the euro, which has risen against the US dollar.