EUR/USD: strong business activity in the European Economic Area supported the pair
The EUR/USD trading instrument shows a moderate upward correction, pushed by optimistic economic reports from the European Union.
The index of activity in the service sector of the Spanish economy jumped from 52.1 to 54.7 points in February, while in Italy it increased from 51.2 to 52.2 points. The indicators of France and Germany also showed improvement, reaching 48.4 and 48.3 points, respectively, which allowed the pan-European index to exceed the threshold of 50 points for the first time in many months, reaching 50.2 points. Today, data on retail sales in the EU for January is expected to be published, with a projected decline to -1.3% year-on-year and an increase to 0.1% month-on-month. Of great interest will be the outcome of the European Central Bank's meeting on Thursday, at which the interest rate is expected to remain at 4.5%. Forecasts and comments on the results of the ECB meeting will be in the spotlight, with a projected 88% probability of a rate hike in June.
- Resistance levels: 1.0880, 1.0990.
- Support levels: 1.0800, 1.0710.
GBP/USD: growth attempts did not lead to stability at the peaks of February
The GBP/USD currency pair is showing mixed trends, approaching the key resistance boundary at 1.2700. The pound's previous efforts to overcome this barrier and update the peak values of early February were met with an inability to maintain the positions achieved.
Investors are being cautious, deciding to take profits ahead of statements by Chairman of the US Federal Reserve Jerome Powell before Congress. His remarks are expected to support the current policy line and do not portend an accelerated reduction in interest rates this year. At the same time, fresh macroeconomic information from the United States had an impact on the weakness of the dollar. The ISM index of business activity in the service sector showed a decline from 53.4 to 52.6 points against the predicted 53 points, while the S&P Global equivalent increased from 51.3 to 52.3 points. Data on orders in the manufacturing sector for January marked a decrease of 3.6%, surpassing the expected drop of 2.9%. The IBD/TIPP economic optimism index decreased from 44 to 43.5 points in March, falling short of the projected 45.2 points.
- Resistance levels: 1.2700, 1.2734, 1.2771, 1.2800.
- Support levels: 1.2650, 1.2600, 1.2550, 1.2500.
Gold market analysis
The XAU/USD trading instrument has demonstrated an active increase in value since the middle of the previous month, yesterday reaching peak values for the year at 2140.62 (Murray level [+1/8]), however, today there is a correction of some recent acquisitions.
The steady rise in prices is due to two key drivers: the increasing international geopolitical situation and the anticipation of changes in the policy of the US Federal Reserve System. In particular, the conflict between Israel and Hamas, which began last year, led to an increase in the value of gold by over $ 300 per ounce. With a low probability of a quick resolution of the situation, investors continue to consider precious metals as a reliable asset to preserve capital. At the same time, the increasing expectation of a change in the Fed's exchange rate to a softer policy contributes to the weakening of the US dollar. Despite the fact that representatives of the central bank note a steadily high level of inflation with the risks of its further acceleration against the backdrop of a recovering economy and labor market, experts foresee a possible decision to change interest rates by the summer of this year.
- Resistance levels: 2156.25, 2187.50.
- Support levels: 2125.00, 2093.75, 2031.25.
Crude Oil market analysis
The price of WTI Crude Oil demonstrates stability within the framework of a sideways movement at the level of 78.84, being influenced by geopolitical events in the Red Sea region. Since the beginning of March, there have been several incidents related to Houthi attacks on international vessels, which creates difficulties for the smooth transportation of petroleum products. Missile strikes on MSC Sky and MSC Sky II ships are known, which confirms the ongoing risks in the field of maritime transportation.
Against this background, there is an increase in activity in the oil market: over the past week, the volume of trading in WTI crude oil on the Chicago Mercantile Exchange increased, reaching an average of 945 thousand contracts, which is significantly higher than at the end of the previous month. At the same time, investor interest remains at a high level with the total volume of open transactions at 1.6 million, which indicates the growing investment attractiveness of this commodity asset and helps to maintain its value at current levels.
- Resistance levels: 78.80, 83.00.
- Support levels: 76.30, 72.30.