Should We Watch the Pound-Dollar Exchange Rate, Given the Downward Trend in the Daily RSI?
06.02.2024
- Retail Sales in Europe
- New Orders in Germany's Manufacturing Sector
In the previous day’s U.S. currency trading, Minneapolis Fed President Kashkari stated that “core inflation is making rapid progress toward the Fed’s target,” which accelerated expectations of an interest rate cut; however, the market reacted in the opposite direction, and the U.S. dollar rose.The EUR/USD pair fell from 1.0786 to 1.0723. It broke below the daily 200-day EMA, which had been acting as support, with a real-body candle.
Among European currencies, the pound was the weakest, and the GBP/USD pair fell for the second consecutive day.GBP/USD fell from 1.2631 to 1.2518. On the daily chart, the pair experienced a continuous decline from the +2σ to the -3σ levels of the Bollinger Bands, halting its decline upon touching the 200-day EMA. On the weekly chart, the pair has failed to make a new high and is trading lower, so traders should watch for further weakness in the pound.
Today’s schedule includes UK same-store sales at 9:00, Australian retail sales at 9:30, the Philippine Consumer Price Index at 10:00, and at 12:30, the AustralianRBA policy rate and statement, at 16:00 German new manufacturing orders, at 17:00 Taiwan’s Consumer Price Index, at 18:30 UK Construction PMI, at 19:00 Eurozone retail sales, at 22:30 Canadian housing permits,at 24:00: Canada’s Ivey Purchasing Managers’ Index; at 26:00: U.S. remarks by Mester, President of the Cleveland Fed; and at 27:00: U.S. 3-year Treasury auction. We will be closely monitoring the price action of the GBP/USD pair, as its daily RSI is showing a downward trend.
Author: Keisuke Sakurai
