EUR/USD: expectation of production inflation data in the European economic Area for January
The EUR/USD trading instrument shows fluctuating activity, steadily staying around 1.0850, in anticipation of new macroeconomic statistics.
In the European economic area, fresh indicators of February business activity from S&P Global are expected, with the forecast of maintaining the index in the services sector at 50.0 and in the manufacturing sector at 48.9. Additionally, the January production inflation data will be evaluated, expanding the previously released figures for consumer prices. The annual producer price index is projected to decrease to -8.1% from the previous -10.6%, and the monthly dynamics may show a drop of 0.1% after -0.8%.
Investment analysts from The Goldman Sachs Group Inc. have revised their forecasts for the ECB, pointing to a February slowdown in inflation to a minimum over the past year (the base index fell from 3.3% to 3.1%) and suggest the beginning of monetary policy easing no earlier than June, pushing back initial expectations from April.
- Resistance levels: 1.0866, 1.0900, 1.0930, 1.0964.
- Support levels: 1.0838, 1.0820, 1.0800, 1.0765.
AUD/USD: Australian currency shows a short-term decline
The AUD/USD pair is showing a slight decline, continuing the trend of the "bearish" trend laid down in the previous week, and heading towards checking the 0.6500 level for a possible downward breakout. This is despite favorable macroeconomic indicators from Australia.
For example, the Commonwealth Bank's services business activity report for February indicated an increase from 52.8 to 53.1 points, while the overall activity index increased from 51.8 to 52.1 points. The balance of payments for the fourth quarter of 2023 showed a significant increase of 1.3 billion Australian dollars to 11.8 billion Australian dollars, exceeding analysts' forecasts. At the same time, the index of business activity in the Chinese services sector from Caixin in February fell slightly from 52.7 to 52.5 points, which is below market expectations.
On Wednesday, Australia is expected to publish GDP data for the last quarter of 2023, with the assumption that annual growth will slow from 2.1% to 1.4%, but the quarterly figure will increase from 0.2% to 0.3%. January inflation in Australia remains at the level of the previous month, becoming the lowest since November 2021 and noticeably lower than the December peak of 8.4% in 2022. A series of interest rate hikes by the Reserve Bank of Australia since May 2022 has been helping to control inflation. In January, the main contribution to the annual dynamics of the consumer price index was made by the cost of housing (+4.6%), food and non-alcoholic beverages (+4.4%), as well as alcohol, tobacco and financial services.
- Resistance levels: 0.6524, 0.6551, 0.6578, 0.6600.
- Support levels: 0.6500, 0.6486, 0.6468, 0.6442.
NZD/USD: within the negative trend between 0.6190 and 0.6020 levels
The NZD/USD pair is experiencing a correction, being near the 0.6088 indicator, even against the background of favorable economic statistics from New Zealand.
The country's exports fell from NZ$24.6 billion to NZ$24.2 billion in the last quarter, while imports decreased from NZ$31.6 billion to NZ$28.8 billion compared to the same period the previous year. In the structure of exports, growth was noted in the segments of tourism by 350 million, insurance by 186 million, telecommunications by 76 million, transport services by 730 million and cultural by 76 million New Zealand dollars. At the same time, the terms of trade indicator for the fourth quarter showed a decrease from -0.6% to -7.8%, which was lower than analysts' forecasts of -0.2%. Information from TD Securities indicated a decrease in inflationary pressure: the consumer price index fell from 4.6% to 4.0% year-on-year and from 0.3% to -0.1% month-on-month. The ANZ consumer confidence index showed an increase from 93.6 to 94.5 points, while the number of building permits issued fell from an increase of 3.6% to a decline of 8.8%.
- Resistance levels: 0.6120, 0.6190.
- Support levels: 0.6060, 0.5980.
Crude Oil market analysis
In the Asian trading session, Brent Crude Oil is under pressure, trying to break below the 82.30 level in response to reduced market activity, continuing the "bearish" trend started the previous day.
The incentive to maintain current oil prices comes from OPEC+'s decision to continue production restrictions until the end of the second quarter, which entails an overall decrease in production by 2.2 million barrels per day. Analysts from the International Energy Agency emphasize that in order to match the reduction in global demand and an increase in supplies, especially from the United States, OPEC+ may need to extend these restrictions for the whole of next year. At that time, Russia announced plans to reduce oil exports by an additional 471 thousand tons. barrels per day in the next quarter, which is less than the previous level of 500 thousand barrels per day. Russian Energy Minister Alexander Novak clarified that Russia can increase exports and production in accordance with OPEC+, guided by market requirements.
- Resistance levels: 83.14, 84.00, 84.64, 85.52.
- Support levels: 82.00, 81.00, 80.00, 79.12.