Should We Watch for Continuity in the Euro-Dollar Rebound?

Should We Watch for Continuity in the Euro-Dollar Rebound?

07.02.2024

In U.S. currency trading yesterday, the Canadian dollar fell against the yen after Canada’s December housing starts, released yesterday, dropped to -14.0% from -3.9% the previous month. The CAD/JPY pair fell from 109.940 to 109.445.It has moved just below the daily 20-day moving average (MA). Technically, since the CAD/JPY pair is gradually rising while finding support at the daily 20-day MA, we should keep an eye on price movements during U.S. trading hours.

European currencies rose as the euro gained against the U.S. dollar following yesterday’s release of December retail sales data for the eurozone, which showed a slight improvement year-over-year, narrowing the decline from the previous month’s -1.1% to -0.8%.The EUR/USD pair rose from 1.0722 to 1.0762, breaking above the 20-period moving average on the hourly chart. On the daily chart, the pair has rebounded from the -3σ level of the Bollinger Bands, so we will be watching closely to see if this rebound continues for a while.

Today, Malaysia’s industrial production will be released at 1:00 p.m., Japan’s Economic Sentiment Index at 2:00 p.m., Switzerland’s employment statistics at 3:45 p.m., and Germany’sIndustrial Production at 4:00 PM, Thailand’s Policy Rate and Statement at 4:05 PM, France’s Trade Balance at 4:45 PM, Taiwan’s Trade Balance at 5:00 PM,at 9:00 PM, the U.S. MBA Mortgage Applications Index and Brazil’s Retail Sales; at 10:30 PM, the U.S. Trade Balance and Canada’s International Merchandise Trade; at 1:00 AM, remarks by Fed Governor Kugler; and at 3:00 AM, the U.S. 10-Year Treasury Auction.We should keep an eye on whether the euro’s rebound against the U.S. dollar will continue.