Should We Keep an Eye on the Euro’s Upside Potential, Given Its Gains Against Both the U.S. Dollar and the British Pound?

Should We Keep an Eye on the Euro’s Upside Potential, Given Its Gains Against Both the U.S. Dollar and the Pound?

04.03.2024

Last weekend, the U.S. dollar fell across the board during U.S. trading hours after the University of Michigan’s February Consumer Sentiment Index, released on the 1st, came in significantly lower at 76.9, down from 79.6 the previous month.The EUR/USD pair rose from 1.0798 to 1.0842. The daily 200 EMA acted as support, causing the pair to rebound off that level. From a technical perspective, the EUR/USD has shown a rebound off the weekly 20 MA, so it will be worth watching whether the pair continues to rise at the start of the week.

European currencies saw the euro rise against the pound despite the release of the Eurozone’s February Harmonized Index of Consumer Prices (HICP), which showed the year-over-year core inflation rate falling by 0.2 percentage points to 3.1% from the previous month’s 3.3%.The euro/pound pair rose from 0.8554 to 0.8575, breaking well above the +3σ level of the hourly Bollinger Bands. On the daily chart, the pair is approaching the threshold of whether it will enter an uptrend along the 20-day moving average, so we will be watching closely to see if the pound weakens during European trading hours.

Today’s schedule includes Japan’s monetary base at 8:50, South Korea’s Manufacturing PMI and Australia’s Housing Construction Permits at 9:30, Turkey’s Consumer Price Index and Producer Price Index at 16:00, Switzerland’s Consumer Price Index at 16:30, and France’sfiscal balance, at 18:00 the Eurozone Investor Sentiment Index, at 21:00 Mexico’s total fixed capital formation, at 25:00 remarks by Harker, President of the Federal Reserve Bank of Philadelphia, and at 25:30 a U.S. 6-month Treasury bill auction.We want to carefully assess the upside potential for the euro, which has risen against both the U.S. dollar and the British pound.