EUR/USD: Euro reaches new local peaks
The EUR/USD currency pair is showing a moderate rise, continuing the growth trend laid down last week. The euro is experiencing the level of 1.0735, trying to overcome it upwards, while updating the highs recorded on September 14.
Investor interest is currently focused on the October US employment report, which was released on the last working day of the week. According to the report, the number of new jobs in non-agricultural sectors decreased from 297.0 thousand to 150.0 thousand, which was lower than the expected 180.0 thousand. Meanwhile, the growth of average hourly wages slowed from 0.3% to 0.2% on a monthly basis and from 4.3% to 4.1% on an annual basis, and the unemployment rate increased from 3.8% to 3.9%. The market is also reacting to the decline in business activity, which is confirmed by the S&P Global services sector index, which fell from 50.9 to 50.6 points in October, contrary to expectations of stability, and the Supply management Index (ISM), which fell from 53.6 to 51.8 points, being below the projected 53.0 points.
At the same time, the September figures for German exports showed a decrease of 2.4% compared with an increase of 0.1% a month earlier, exceeding the forecasts of analysts who expected a decline of 1.1%. Imports fell by 1.7%, while earlier a decrease of 0.3% was recorded, while growth of 0.5% was forecast. As a result, the country's trade surplus in September decreased from 17.7 billion euros to 16.5 billion euros, while analysts expected an indicator of 16.3 billion euros. Analysts emphasize that trade no longer contributes to the sustainable growth of the German economy, and on the contrary, now serves more as a barrier to its recovery. At the same time, Philip Lane, chief economist of the European Central Bank (ECB), expressed confidence that the European Union will be able to avoid a recession.
- Resistance levels: 1.0730, 1.0765, 1.0800, 1.0850.
- Support levels: 1.0700, 1.0660, 1.0630, 1.0600.
AUD/USD: the currency pair stabilizes around the 0.6500 level
The AUD/USD currency pair shows a fluctuating movement, correcting after last week's growth, which culminated in reaching the peaks on September 1. The currency asset is checking the 0.6500 level for the possibility of overcoming it, waiting for new catalysts in the market and reacting to the latest macroeconomic reports published on Friday.
Last week, employment data for October were published in the United States, which did not meet investors' expectations. The number of new jobs in the economy outside the agricultural sector decreased to 150.0 thousand against the projected 180.0 thousand after the previous value of 297.0 thousand, and the unemployment rate increased to 3.9% from 3.8%. There was also a decrease in the index of business activity in services from the Institute of Supply Management (ISM) from 53.6 to 51.8 points, contrary to forecasts of 53.0 points. In parallel, in Australia, the Commonwealth Bank business activity index in the services sector rose from 47.6 to 47.9 points, and the overall business activity index increased from 47.3 to 47.6 points. Additional support for the Australian dollar was provided by a 0.2% increase in retail sales in the third quarter, as opposed to a 0.6% drop in the previous quarter.
- Resistance levels: 0.6521, 0.6550, 0.6594, 0.6622.
- Support levels: 0.6500, 0.6472, 0.6450, 0.6425.
NZD/USD: the exchange rate is approaching the testing of the 0.6010–0.6045 range
The growth factor of the NZD/USD exchange rate was the decision of the US Federal Reserve System to keep the key rate at 5.50% to assess the effectiveness of previously adopted economic initiatives. At the moment, the pair is checking the 0.5995 level.
The optimistic statements of Federal Reserve Chairman Jerome Powell caused changes in the expectations of futures market participants, of which 85.0% now believe that the central bank has stopped raising interest rates, and 80.0% foresee a decrease in the cost of lending starting in June. According to the FedWatch tool from the Chicago Mercantile Exchange (CME), the confidence that the current rate will remain in December is 90.0%, and in January 2024 — 83.0%.
- Resistance levels: 0.6010, 0.6045, 0.6245.
- Support levels: 0.5865, 0.5790, 0.5750.
USD/CAD: anticipation of the release of the Canadian Business Activity report
In the Asian trading space, the USD/CAD currency pair shows an ambiguous trend, remaining near the 1.3650 level. Quotes were under pressure last Friday when traders focused on labor market data for October published by the United States and Canada.
According to the US, the number of jobs outside agriculture decreased from 297.0 thousand to 150.0 thousand, which did not reach the level of the projected 180.0 thousand, the unemployment rate increased from 3.8% to 3.9%, and wage growth slowed. Canada also presented weak results: the employment rate fell from 63.8 thousand to 17.5 thousand, which was below expectations of 22.5 thousand. Hourly wages decreased from 5.3% to 5.0%, and unemployment increased from 5.5% to 5.7%, surpassing analysts' forecasts of 5.6%.
- Resistance levels: 1.3700, 1.3750, 1.3800, 1.3853.
- Support levels: 1.3650, 1.3600, 1.3550, 1.3500.