EUR/USD: exploring sloping support and resistance levels
During Asian trading, the EUR/USD currency pair is holding near the 1.0725 level, experiencing uncertainty in movement after the recent publication of economic data, which did not have a noticeable impact on market sentiment.
In the last quarter, the annual GDP of the eurozone showed no changes, remaining at the level of the previous period, with annual growth of 0.1%, in line with analysts' expectations. December showed an increase in industrial production from 0.4% to 2.6% and from -5.4% to 1.2% on an annual basis, while employment increased from 0.2% to 0.3%.
The dynamics of the pair is significantly affected by the correction in the positions of the US dollar, which reached the level of 104.50 on the USDX index. The market is looking forward to the evening statistics on the US labor market and retail sales, expecting that they will provide clues about the future steps of the Federal Reserve System at the March meeting. Forecasts indicate that the core retail sales index for January will decrease from 0.4% to 0.2%, and the number of new applications for unemployment benefits will increase from 218,000 to 219,000.
- Resistance levels: 1.0827, 1.0942.
- Support levels: 1.0635, 1.0551.
GBP/USD: pound is under pressure due to a number of factors
In an attempt to reorient medium-term growth to decline, GBP/USD has started falling again since the beginning of the month, being influenced by monetary aspects, now being at the level of 1.2553.
In light of recent economic statistics, the Bank of England may be inclined to ease monetary policy earlier than the US Federal Reserve. In January, American inflation exceeded expectations, reaching 3.1% per annum against the projected 2.9%, while British inflation remained at 4.0%, falling short of the expected 4.1%. This indicates a slowdown in the decline in inflationary pressures in the United States, causing concern among regulators, while in the UK the indicators remain stable, strengthening investor confidence in the 2.0% target. British Finance Minister Jeremy Hunt expressed optimism about the stabilization of consumer prices at the target level in the near future.
- Resistance levels: 1.2634, 1.2756, 1.2817.
- Support levels: 1.2451, 1.2390.
Silver prices analysis
The price of the precious metal shows a noticeable strengthening, following the upward correction trend started on the previous day. Now silver is trying to overcome the level of 22.40, trying to compensate for some of the losses incurred on Tuesday after the release of important data on inflation in the United States.
The January consumer price index fell to 3.1% on an annual basis from the previous 3.4%, being slightly higher than the market forecasts of 2.9%. The monthly indicator increased from 0.2% to 0.3%. Core inflation, excluding the cost of food and energy, remained at 3.9%, contrary to the expected 3.7%. This forced the markets to adjust expectations again regarding the time of the beginning of monetary policy easing by the Federal Reserve. The current probability of interest rate cuts in March is 15%, and in May it is about 50%.
Investors are focused on the January retail sales statistics in the United States, expecting a decrease of 0.1% after an increase of 0.6% a month earlier. In the coming days, we will also have to familiarize ourselves with the data on industrial inflation for January. The producer price index is projected to decrease from 1.0% to 0.6% on an annual basis and increase from -0.2% to 0.1% on a monthly basis.
- Resistance levels: 22.50, 22.70, 23.00, 23.32.
- Support levels: 22.21, 22.00, 21.75, 21.50.
Oil market analysis
WTI Crude Oil prices have rolled back from a high of 78.61, now at 76.16, amid an increase in hydrocarbon reserves in the United States.
The American Petroleum Institute (API) report presented mixed data: crude oil volumes increased by 8.520 million barrels, while gasoline and distillate stocks decreased by 7.23 million barrels and 4.02 million barrels, respectively. According to the U.S. Energy Information Administration (EIA), last week showed an increase in inventories by 12.018 million barrels, which significantly exceeded expectations of 3,300 million barrels. This continuation of the trend of increasing inventories over the past three weeks is putting additional pressure on oil prices.
- Resistance levels: 78.61, 83.50.
- Support levels: 72.11, 68.27.