EUR/USD: German inflation puts pressure on the euro
Against the background of the strengthening of the US dollar, the EUR/USD pair shows a corrective trend, trading at 1.0795 under the influence of German macroeconomic data.
In May, the consumer price index in Germany decreased by 0.1%, which was lower than the 0.2% growth forecast by analysts, as well as the 0.5% figure recorded earlier. Despite this, the annual rate increased from 2.2% to 2.4%, and the EU-harmonized index increased from 2.4% to 2.8%. Thus, the necessary reduction in inflation to start adjusting interest rates in the EU has not yet been observed. If inflation continues to rise in other countries, the risks of tightening monetary policy will increase significantly, which may lead to the formation of a new downward trend in the EUR/USD pair. Traders' attention was also attracted by a slight increase in the GfK Group consumer confidence index in June, which rose from -24.0 to -20.9 points, exceeding the forecast of -22.5 points.
- Resistance levels: 1.0820, 1.0920.
- Support levels: 1.0770, 1.0670.
AUD/USD: inflation statistics in Australia exceeded forecasts
The AUD/USD pair shows mixed results, remaining near the 0.6600 mark and the minimum values from May 24. Investors are waiting for the publication of tomorrow's US macroeconomic statistics on inflation, which is expected to clarify the prospects for a possible interest rate cut by the US Federal Reserve in the second half of 2024. Earlier, analysts expected a rate cut in September or November, predicting at least two cuts of 25 basis points during 2024. However, experts now believe that the reduction will happen once in December. In addition, the consumer confidence index rose from 97.5 points to 102.0 points in May, despite the projected decline to 96.0 points, which may complicate the fight against inflation for the US Federal Reserve.
Meanwhile, the Australian dollar barely reacted to Wednesday's published data. The consumer price index rose from 3.5% to 3.6% in April, although 3.4% was expected. Inflation in Australia has reached a five-month high, increasing the likelihood that the Reserve Bank of Australia may raise rates again, given the significant deviation of the current consumer price index from the target level of 2.0%. Currently, most analysts believe that the regulator will not ease monetary policy this year, and some allow another increase in the interest rate.
- Resistance levels: 0.6622, 0.6646, 0.6667, 0.6700.
- Support levels: 0.6600, 0.6578, 0.6558, 0.6540.
USD/JPY: Seiji Adachi clarified the condition for the interest rate correction in Japan
The USD/JPY pair is showing a moderate decline, retreating from the local highs reached on May 1 and weakening the uncertain bullish trend observed since the beginning of the current trading week. The instrument is testing the 157.15 level for a downward breakdown, while investors are preparing for the publication of important macroeconomic statistics from the United States and Japan.
Recall that on Friday, Japan will present May data on the consumer price index in the Tokyo region: analysts expect that the indicator, excluding prices for fresh food, will increase from 1.6% to 1.9%. Also at 01:50 (GMT+2), retail sales data for April will be published, where growth is projected from 1.2% to 1.9%, and industrial production, which is likely to slow from 4.4% to 0.9%. The day before, Seiji Adachi, a member of the board of the Bank of Japan, said that the regulator could raise interest rates if a sharp drop in the yen would lead to an increase in consumer prices or affect inflation expectations. Adachi also stressed that premature measures should be avoided so as not to increase pressure on the national economy, which underlines the importance of a weak yen in determining the timing of the next monetary policy adjustment.
- Resistance levels: 157.50, 157.98, 158.43, 159.30.
- Support levels: 157.00, 156.50, 156.00, 155.50.
NZD/USD: the uptrend remains relevant
The NZD/USD pair dropped to 0.6095 amid unfavorable economic statistics from New Zealand.
The business confidence index published by ANZ Group showed a value of 11.2 points in May, which was lower than the expected 15.0 points and the previous indicator of 14.9 points. Businesses continue to feel the impact of the Reserve Bank of New Zealand's record high interest rate, which is at a 15-year high, which is holding back active investments. Representatives of the regulator have previously stressed the need to maintain a tight monetary policy in order to accelerate the achievement of inflation targets. In addition, in April, the number of building permits decreased by 1.9%, which was lower than the forecast of 1.5% and the previous value of -0.2%.
- Resistance levels: 0.6150, 0.6205, 0.6262.
- Support levels: 0.6070, 0.5992, 0.5981.