US employment data continue to be an influence on the forex market. The US Dollar Index (DXY) began testing seven-month lows following last week’s strong payroll figures, and the bearish trend looks to continue this week.
Having shed another 0.2% in this morning’s Asia trading window, DXY is now trading well below the 20-day moving average at 103.20.
Sterling reached a new January high of 1.215 against the greenback, although Cable has been inching downwards on the one-hour chart.
Pound makes strong gains on US dollar – Source: dailyfx.com
After soaring over 120 pips against the dollar on Friday, the euro has continued to make gains, although the pace has slowed somewhat.
EUR/USD closed 20 pips higher on Sunday, and has added another 15 pips to 1.067 this morning.
Euro area unemployment figures for the month of November are due later today, with forecasts predicting the record low of 6.5% achieved in October to be matched.
Hitting these forecasts will be another boon to the euro hawks.
Traders on the EUR/GBP pair seem locked in a stalemate given the spinning top candlestick pattern forming on the daily chart. The pair closed flat at 87.97p on Sunday and is currently changing hands at 87.90p at the time of writing.
While today is pretty quiet on the economic calendar front, tomorrow’s UK retail sales monitor should give an insight into the state of consumer spending.
The British Retail Consortium isn’t particularly optimistic about sales growth in 2023, with a growth rate of 2.3% expected for the first half of 2023 due to the persistent cost-of-living crisis.