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Should We Watch for the Pound's Upside Potential After Its Decline Against the U.S. Dollar?

Market Report

Should We Watch for the Pound's Upside Potential After Its Decline Against the U.S. Dollar?

Today's Highlights
  1. Germany's Trade Balance
  2. Japan: Foreign and Domestic Securities Investment

In the U.S. currency market yesterday, the U.S. dollar rose against the yen. The USD/JPY pair rose from 151.733 to 152.995. The uptrend along the 10-period moving average (MA) on the hourly chart continued.On the 4-hour chart, the price is trending upward along the 10-period moving average (MA), and the RSI has surged to 82. On the daily chart, the candlesticks have reached the +3σ level of the Bollinger Bands. Furthermore, since the decline during today’s Asian session has been limited to a mild corrective pullback, we should remain vigilant for a further rise in the U.S. dollar during U.S. trading hours.

Among European currencies, the pound fell against the U.S. dollar. The GBP/USD pair dropped from 1.3438 to 1.3371. On the hourly chart, the price moved from above the 20-period moving average (MA) to below it.On the 4-hour chart, the pair has pulled back after encountering resistance at the 200-period simple moving average (SMA), and on the daily chart, it appears to be entering a downtrend along the 20-period moving average (MA). Furthermore, on the weekly chart, the pair is teetering on the brink of breaking below the 20-period MA support line, so traders should pay close attention to the direction of the market during European trading hours.

Today’s economic indicators include the UK RICS House Price Index at 8:01, Japan’s Foreign and Domestic Securities Investment at 8:50, and Germany’strade balance at 15:00, remarks by a member of the UK’s MPC at 17:30, South African manufacturing output at 20:00, publication of the minutes of the ECB Governing Council meeting at 20:30,at 21:30, remarks by U.S. Federal Reserve Chair Powell; at 21:35, remarks by U.S. Federal Reserve Vice Chair Bowman; at 25:45, remarks by U.S. Federal Reserve Governor Barr; at 26:00, a U.S. 30-year Treasury auction; remarks by U.S. Federal Reserve Governor Kashkari:President of the Minneapolis Fed, and at 28:45, remarks by U.S. Federal Reserve Vice Chair Bowman are scheduled. Keep an eye on the downside potential for the pound, which has fallen against the U.S. dollar.

桜井 慶介

Author: Keisuke Sakurai

He has over 10 years of experience in FX trading. In the financial sector, he has been involved in investment management with a particular focus on foreign exchange markets, and he also has experience as an asset management advisor. Drawing on his extensive experience, he specializes in technical and fundamental analysis.

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