Market participants are keeping a close eye on the upside potential of the pound, which has rebounded against the U.S. dollar

Market participants are keeping a close eye on the upside potential of the pound, which has rebounded against the U.S. dollar

12.12.2023

In yesterday’s U.S. currency trading, the U.S. dollar traded in a tight range against the euro ahead of today’s U.S. CPI release. The EUR/USD pair remained within a very narrow range between 1.10741 and 1.0778, continuing its lack of direction.From a technical perspective, the EUR/USD pair is positioned just below the 200-period simple moving average (SMA) on the 4-hour chart, and the 200-period exponential moving average (EMA) is acting as support on the daily chart, so we will be watching price movements closely during U.S. trading hours today.

European currencies saw the pound rise slightly against the U.S. dollar after the UK’s December Rightmove house prices, released yesterday, improved year-on-year from a 1.3% decline the previous month to a 1.1% decline. The GBP/USD pair rebounded by about 60 pips from 1.2522 to 1.2588.It has recovered from this month’s low. However, on the daily chart, the RSI remains in a downtrend after falling from above 70, so caution is warranted ahead of today’s economic data releases during U.S. trading hours.

Today’s economic indicators include UK employment figures at 4:00 PM, the German and Eurozone ZEW Economic Sentiment Indices at 7:00 PM, South African manufacturing output and the US NFIB Small Business Optimism Index at 8:00 PM, and Mexican industrial production and the IndianIndustrial Production, and India’s Consumer Price Index; at 10:30 PM, the U.S. Consumer Price Index; at 10:55 PM, the U.S. Redbook Large Retailer Sales; at 3:00 AM, the U.S. 30-Year Treasury Auction; and at 4:00 AM, the U.S. Budget Balance. We will closely monitor the upside potential of the pound, which has rebounded against the U.S. dollar.