EUR/USD: analysts expect new data on the producer price index in Europe
The EUR/USD trading instrument shows ambiguous changes in value, stabilizing around the 1.0740 level. Trading volumes have decreased as market participants refrain from active actions on the eve of Independence Day celebrations in the United States on July 4. Investors are also awaiting data from the June US employment report, which may clarify possible Fed rate adjustments by the end of the year.
In the Eurozone, data on producer price indices will be published, which will complement the already known indicators of consumer inflation. In June, the index slowed from 2.6% to 2.5% per annum and remained at the level of 0.2% monthly. The base index remains at 2.9% per annum, which is higher than the projected 2.8%, and decreased from 0.4% to 0.3% for the month. In this context, representatives of the European Central Bank are cautious in their statements. On the eve of the ECB head Christine Lagarde stressed that the agency needs more time to achieve a steady movement of the consumer price index to the target level of 2.0%, which indicates a slow easing of monetary policy. She also noted that the risks of recession have not yet passed, and the prospects for economic growth remain uncertain.
- Resistance levels: 1.0765, 1.0800, 1.0820, 1.0842.
- Support levels: 1.0730, 1.0700, 1.0665, 1.0630.
GBP/USD: an uptrend amid comments from the head of the Fed
At the end of June, the pound sterling stabilized at 1.2617 and began a steady recovery after Jerome Powell's statements about the future steps of US monetary policy. Despite the proximity of Independence Day celebrations in the United States, which traditionally reduces activity in the markets, new deals are being opened cautiously.
The growth of GBP/USD is supported by the latest data on the real estate market. The Nationwide Building Society housing price index in June showed an increase of 0.2% for the month, which exceeded analysts' expectations of 0.0%, and increased the annual increase to 1.5% against 1.3% previously. An improvement in indicators may provoke an increase in inflation and prompt the Bank of England to reconsider the time frame for easing monetary policy. Currently, the key rate is held at 5.25%, and if it remains unchanged at the upcoming meeting on August 1, this will provide the British pound with an additional impetus to continue the upward trend.
- Resistance levels: 1.2875, 1.2963, 1.3133.
- Support levels: 1.2617, 1.2525, 1.2322.
AUD/USD: RBA summed up the results of monetary policy actions
The AUD/USD exchange rate has been showing stable movement within the boundaries of 0.6713–0.6591 for several months, being influenced by the expectation of new market incentives that could determine the direction of its further trend. Investors pay special attention to statements by financial authorities that can indicate the time frame for changes in current monetary policy.
The May inflation data revealed a significant excess of forecasts: the monthly consumer price index jumped to 4.0% in annual terms, which is beyond the target range of 2.0–3.0%. Therefore, economists revised their expectations for an interest rate adjustment in August. Despite this, representatives of the Reserve Bank of Australia (RBA) note the effectiveness of the current policy. Christopher Kent, assistant to the head of the RBA, stressed that high interest rates contributed to a slowdown in inflation and demand. However, he also pointed out that the share of mortgage payments in family incomes reached a record 10.0%. Since May 2022, rates have increased by 425 basis points and have not changed at the last five meetings of the RBA. The minutes of the last meeting reflected the weak dynamics of GDP, which indicates difficulties in industries sensitive to rate increases, such as retail and construction. Despite the moderate growth in consumption, other economic indicators showed a decline. There is also a slowdown in employment growth, approaching the growth of the working-age population, and wage dynamics have probably reached their peak.
- Resistance levels: 0.6713, 0.6775, 0.6835.
- Support levels: 0.6591, 0.6469, 0.6408.
NZD/USD: New Zealand dollar expects factors to start correction
During the Asian session, the NZD/USD exchange rate shows volatility, hovering around the 0.6075 level in anticipation of new market incentives.
The New Zealand dollar is under some pressure due to weak economic indicators from China, indicating a slowdown in the country's economic growth. This was especially evident when the Caixin services index fell from 54.0 to 51.2 points in June, significantly below expectations of 53.4 points. At the same time, despite forecasts, the indicator in the manufacturing sector increased slightly, reaching 51.8 points. It should also be noted changes in the consumer confidence index from ANZ Group Ltd., which fell to 83.0 points against the predicted 84.2 and the previous 84.9 points. The Reserve Bank of New Zealand's business optimism index also showed a decrease — from 11.2 to 6.1 points, which reflects the impact of prolonged tight monetary policy on business. In addition, the correction of the business activity forecast from 11.8% to 12.2% also has an impact on the New Zealand dollar exchange rate.
- Resistance levels: 0.6085, 0.6100, 0.6130, 0.6152.
- Support levels: 0.6068, 0.6047, 0.6030, 0.6000.