Market participants are watching for the direction of the euro-dollar pair at the start of the week, as it faces resistance on the upside

Market participants are watching for early-week direction in the euro-dollar pair, which is facing resistance

28.08.2023

Last weekend, the U.S. dollar temporarily weakened against the euro after the final reading of the University of Michigan’s August Consumer Sentiment Index, released on the 25th, came in at 69.5—below the market forecast of 71.2.The EUR/USD pair rebounded from this month’s low of 1.0765 to 1.0841, breaking above the 75-period moving average (MA) on the hourly chart. However, the dollar’s weakness did not last long, and the EUR/USD pair gradually lost momentum, retreating to 1.0792. Since the downtrend along the 20-period MA continues on the 4-hour chart, traders should remain cautious regarding price movements during European trading hours.

European currencies saw the euro fluctuate against the Swiss franc after Germany’s August IFO Business Climate Index, released last weekend, came in at 85.7—below the market forecast of 86.8—marking a further deterioration from the previous month.The EUR/CHF pair is trading between 0.9544 and 0.9569, with its upside capped by the 75-period moving average on the 4-hour chart. On the daily chart, although the pair is in the midst of a downtrend, the daily RSI is showing divergence, so we will keep a close eye on the euro’s price action.

Today’s schedule includes Norwegian retail sales at 3:00 PM, Eurozone money supply at 5:00 PM, Brazil’s consumer confidence index and Mexico’s trade balance at 9:00 PM,remarks by Nagel, President of the German Bundesbank, at 9:30 PM, the Brazilian bank lending data at 11:30 PM, the Dallas Fed Manufacturing Index at 12:30 AM, the U.S. 6-month bill auction at 1:30 AM, remarks by Fed Vice Chair Bar at 2:30 AM, and the U.S. 5-year Treasury auction at 3:00 AM.We will carefully assess the direction of the euro/dollar pair at the start of the week, as it faces resistance on the upside.