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 data, released yesterday, showed a decline from the previous month’s 3.9% drop to 14.0%. The CAD/JPY pair fell from 109.940 to 109.445.The pair has moved just below the daily 20-day moving average (MA). From a technical perspective, since the CAD/JPY pair is gradually rising while finding support at the daily 20-day MA, we will be watching price movements during U.S. trading hours closely.

European currencies rose as the euro strengthened 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 euro rose against the U.S. dollar 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’s schedule includes Malaysia’s industrial production at 13:00, Japan’s Economic Sentiment Index at 14:00, Switzerland’s employment statistics at 15:45, Germany’sIndustrial Production at 16:00, Thailand’s Policy Rate and Statement at 16:05, France’s Trade Balance at 16:45, Taiwan’s Trade Balance at 17:00,at 21:00, the U.S. MBA Mortgage Applications Index and Brazil’s retail sales; at 22:30, the U.S. trade balance and Canada’s international merchandise trade; at 25:00, remarks by Fed Governor Kugler; and at 27:00, a U.S. 10-year Treasury note auction.We should keep an eye on whether the euro’s rebound against the U.S. dollar will continue.