AUD/USD: prices tend to retreat from the upper limit of the expanding formation
During the Asian trading session, the AUD/USD currency pair is trying to regain lost positions after last week's fall, which did not allow it to strengthen at the highs of June 12, and is currently checking the level of 0.6640.
Meanwhile, investors are analyzing the latest decisions of the Reserve Bank of Australia (RBA) on monetary policy, during which the interest rate again remained at a 12-year peak of 4.35% — for the fifth time amid an unconvincing slowdown in inflation. In the first quarter, the consumer price index rose from 4.1% to 3.6% year-on-year and from 0.6% to 1.0% quarter-on-quarter, while forecasts were 3.4% and 0.8%, respectively. The head of the RBA, Michelle Bullock, confirmed that the management considered the increase in the cost of lending as a measure to stabilize the market situation, given the ongoing excess demand and increasing domestic price pressures both in the labor sector and beyond. In her opinion, although the inflation rate has decreased since last year, it is expected that it will return to the target range of 2.0–3.0% by the end of 2025. In addition, the employment rate increased by 377.0 thousand. on an annual basis, and the unemployment rate remains close to a 50-year low, in line with analytical forecasts, which indicates the restraining effect of the RBA's monetary policy on the economy.
- Support levels: 0.6610, 0.6540.
- Resistance levels: 0.6670, 0.6760.
USD/JPY: the US dollar is stabilizing at its recent peaks
The USD/JPY currency pair shows volatile activity during the Asian trading session, holding near the 159.75 mark and highs since April 29. Then the intervention of the Bank of Japan led to a temporary retreat of the yen from record highs around 160.20, but the long-term effect of these measures turned out to be limited, and the market began to actively buy dollars again. Ahead of the expected Fed interest rate cut, the Japanese currency is likely to continue to remain under pressure due to the limited capacity of the local regulator to further tighten monetary policy.
Recently published economic data from Japan showed mixed results: the national consumer price index rose from 2.5% to 2.8% in May, while the index excluding food and energy declined from 2.4% to 2.1%. The index of business activity in the manufacturing sector from Jibun Bank and S&P Global in June fell from 50.4 to 50.1 points, missing the expected 50.6 points. On June 28, data for June on consumer inflation in Tokyo and May statistics on industrial production and unemployment will be published. Production is projected to increase by 2.0% after falling by 0.9% in the previous month, and the unemployment rate will remain stable at 2.6%.
- Resistance levels: 159.92, 160.21, 160.80, 161.30.
- Support levels: 159.30, 159.00, 158.43, 157.95.
NZD/USD: changes in business activity adjusted expectations for Fed rates
The NZD/USD currency pair shows mixed trading results at 0.6116, being influenced by the stable positions of the US dollar. The strengthening of the dollar is due to high interest rates in the United States and the release of the latest economic data: the manufacturing sector index from S&P Global increased from 51.3 to 51.7 points, exceeding forecasts of 51.0 points, while in the service sector the index increased from 54.8 to 55.1 points, ahead of expectations of 53.7 points. It is also worth noting a 0.7% drop in sales in the secondary housing market in May after a 1.9% decrease a month earlier, with a slowdown in sales dynamics from 4.14 million to 4.11 million, which is close to forecasts of 4.10 million.
The New Zealand dollar received minimal support from data on export growth in May from $ 6.31 billion to $ 7.16 billion, as well as an increase in imports from $ 6.32 billion to $ 6.95 billion, while reducing the trade deficit from -10.05 billion to -10.22 billion dollars. An important event was the meeting of New Zealand Prime Minister Christopher Lacson with Premier of the State Council of the People's Republic of China Li Qiang, where they discussed expanding cooperation in the fields of digital, green economy and creative industries, as well as promoting regional economic partnership, which is expected to contribute to improving the economic performance of both countries.
- Resistance levels: 0.6130, 0.6152, 0.6175, 0.6200.
- Support levels: 0.6100, 0.6082, 0.6047, 0.6030.
USD/CHF: the Swiss national bank failed to strengthen the position of the franc
After the recent meeting of the Swiss National Bank on monetary policy, the USD/CHF pair moved to 0.8940, aiming to reach 0.9005.
At the meeting held on Thursday, June 20, the bank lowered the interest rate by 25 basis points to 1.25%, while the market expected the rate to remain at 1.50%. This rate cut brought it to the expected end point of the current monetary policy easing cycle, which, according to the bank, will amount to 1.0% year-on-year. Officials noted that their decision was dictated by a decrease in inflation in May to 1.2% per annum, although the overall index rose to 1.4% due to higher prices for rent, tourist services and petroleum products, mainly due to higher prices for domestic services. The latest forecasts of the bank's economists are now similar to the estimates made in March: average annual inflation is expected to be 1.3% in 2024, 1.1% in 2025 and 1.0% in 2026. Interest rates are expected to remain at 1.25%, however, if inflation accelerates, the bank may tighten monetary policy again, as stated in the official message.
- Resistance levels: 0.9005, 0.9150.
- Support levels: 0.8880, 0.8715.