Market Participants to Watch for Early-Week Direction in the Euro/Dollar Pair, Which Is Facing Resistance
28.08.2023
- U.S. 2-Year Treasury Auction
- Europe: Money Supply
Last weekend, the U.S. dollar temporarily fell 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.It broke above the 75-period moving average (MA) on the hourly chart. However, the US 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 trade in a tight range 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 remains in a downtrend, the daily RSI is showing divergence, so we will be keeping a close eye on the euro’s price action.
Today, at 15:00: Norway’s retail sales; at 17:00: Eurozone money supply; at 21:00: Brazil’s consumer confidence index, Mexico’s trade balance, and remarks by Nagel, President of the German Federal Bank; at 21:30: Brazil’s bank lending;at 11:30 p.m., the U.S. Dallas Fed Manufacturing Index; at 12:30 a.m., the U.S. 6-month bill auction; at 1:30 a.m., remarks by U.S. Federal Reserve Vice Chair Bar; and at 2:00 a.m., the U.S. 5-year Treasury note auction.We want to carefully assess the direction of the EUR/USD pair at the start of the week, as it faces resistance on the upside.
Author: Keisuke Sakurai
