EUR/USD: the development of an upward price corridor in the range of 1.0730–1.0750 with dynamic boundaries
The EUR/USD currency pair continues to fluctuate in a negative way, retreating from the peak values recorded on September 13 and updated at the beginning of this week, now the rate is at 1.0689.
The constraining factor for the euro is the deterioration of economic indicators, especially in Germany, where the September industrial production index decreased by 1.4% compared with a minimum drop of 0.1% in the previous period, and in annual terms the decrease reached -3.86%, which is noticeably worse than the previous indicator of -1.54%. The producer price index in the eurozone also slowed to 0.5% month-on-month after the previous 0.7%, and decreased by 12.4% year-on-year, which is more significant than the previous 11.5% decline. At the same time, the October data showed a weakening of inflation, with the consumer price index falling from 0.3% to 0.0% for the month and from 4.5% to 3.8% year-on-year. The harmonized consumer price index also decreased from 0.2% to -0.2% on a monthly basis and from 4.3% to 3.0% on an annual basis, which indicates the positive impact of measures taken by the European Central Bank to reduce monetary stimulus.
- Resistance levels: 1.0730, 1.0850.
- Support levels: 1.0638, 1.0465.
GBP/USD: the British currency is moving away from the peak of September before the speech of the heads of the Fed and the Bank of England
The GBP/USD currency pair shows a moderate decline, continuing the downward trend that emerged at the beginning of this week after moving away from the peak values recorded on September 15. The current trading focuses on the level of 1.2280, which is being tested for the possibility of a break down, while the early morning is characterized by low trading activity in anticipation of upcoming statements by the chairman of the US Federal Reserve Jerome Powell and the Governor of the Bank of England Andrew Bailey.
On the eve of these events, the market estimated the October results of the Halifax housing cost index, which showed a monthly increase of 1.1% against the projected 0.2%, while the annual indicator decreased by 3.2%. The company's experts expressed the opinion that the semi-annual trend of housing cost reduction has been interrupted, but the current decrease in cost was more a consequence of a shortage of offers than a sign of market stabilization. It is expected that statistics on changes in GDP and industrial production for September will be presented in the UK on Friday, with a projected decline in national economic activity by 0.1% after an increase of 0.2% a month earlier. In the third quarter, the indicator may fall by 0.1%, while in annual terms, a slowdown from 0.6% to 0.5% is forecast. The manufacturing sector is expected to show an increase of 0.1% after the previous significant fall of 0.7%.
- Resistance levels: 1.2300, 1.2350, 1.2400, 1.2450.
- Support levels: 1.2261, 1.2230, 1.2200, 1.2150.
Gold price analysis
Gold remains stable, hovering around the 1965.00 mark and approaching the minimum values on October 24. In the previous week, the metal could not stay above the key level of 2000.00, which led to the massive closure of long positions in the market.
At the moment, investors' attention is focused on the upcoming speeches of the heads of the leading central banks — Andrew Bailey from the Bank of England and Jerome Powell from the US Federal Reserve. It is expected that they can provide additional information on future steps to adjust interest rates, which, according to some experts, have already reached their peak. At the last November sessions, both financial structures left the main parameters of their policy unchanged, but did not rule out tightening in the event of a return of inflationary growth. In addition, investors are expecting a speech by the President of the European Central Bank, Christine Lagarde, in the near future.
- Resistance levels: 1972.85, 1987.29, 2000.00, 2015.30.
- Support levels: 1963.55, 1952.66, 1940.00, 1930.00.
Crude Oil market analytics
In the Asian trading session, WTI crude oil shows a downward bias, being at $76.80 per barrel and reaching the lowest levels since July 24.
Price indicators continue to experience downward pressure despite Russia's decision to extend the voluntary supply restriction by 300 thousand barrels per day until the end of this year, which is in addition to the already existing production reduction by 500 thousand barrels. At the same time, Saudi Arabia has expressed its intention to maintain restrictions at the level of 1 million barrels per day, and in December it is planned to conduct analytical monitoring to determine the future actions of producing countries. According to preliminary estimates, such measures may contribute to an additional reduction in supply in the market, which OPEC + is trying to balance against the background of declining demand. Weak indicators of the eurozone economy contribute to a reduction in industrial consumption, while China does not show a sufficiently strong pace of recovery in economic activity, although there is an increase in imports of raw materials by 7% in October after falling by 13% in the previous period.
- Resistance levels: 78.00, 79.14, 80.00, 81.00.
- Support levels: 77.00, 76.00, 75.00, 74.00.