EUR/USD: euro continues the bearish trend started earlier
The EUR/USD pair is showing a moderate decline, continuing the weak "bearish" trend laid down a day earlier: the exchange rate is experiencing the level of 1.0740 on a downward breakdown, while the market is waiting for new catalysts to change quotes.
Traders are analyzing data on industrial production in Germany for March: the index fell by 0.4% month-on-month after rising by 1.7% a month earlier, while forecasts were at the level of -0.6%. The annual decline slowed from -5.3% to -3.3%. In addition, yesterday's data showed a decrease in production orders by 0.4% month-on-month and 1.9% year-on-year after a decrease of -0.8% and -8.8%, respectively. This confirms that the German economic recovery is slower than expected. However, exports increased by 0.9% in March after a decrease of -1.6% a month earlier, exceeding the forecast of 0.4%, and imports slowed from 3.0% to 0.3% against the expected -1.0%, which led to a trade surplus of 22.3 billion euros. The euro received additional support from retail sales statistics in the eurozone, which improved by 0.8% month-on-month and 0.7% year-on-year in March, significantly exceeding previous figures of -0.3% and -0.5%, respectively.
- Resistance levels: 1.0765, 1.0800, 1.0820, 1.0842.
- Support levels: 1.0730, 1.0700, 1.0660, 1.0630.
GBP/USD: British construction sector is showing a noticeable recovery in business activity
The GBP/USD pair is checking the 1.2480 level for the possibility of a downward breakout, reinforcing the "bearish" trend set a day earlier, against the background of the lack of supportive macroeconomic data from the United States and Great Britain.
The pound's rise was partly due to improved performance in the UK construction sector, where the business activity index for April showed an increase from 50.2 to 53.0 points, exceeding the forecast of 50.4 points. The Halifax house price index rose 0.1% after falling 0.9% a month earlier, which was below analysts' expectations of 0.2%. The housing market is approaching stabilization in anticipation of a possible reduction in interest rates, which may support the construction industry. Meanwhile, data from the British Consortium of Retailers (BRC) for April showed a decrease in retail sales by 4.4% against the forecast 1.6%, reflecting household caution in spending, which may restrain economic growth.
At the upcoming meeting of the Bank of England on Thursday, monetary policy is expected to remain unchanged, with the interest rate at 5.25%. Perhaps the accompanying statement from the regulator will provide an assessment of the current state and prospects of the British economy, as well as hints on possible future actions.
- Resistance levels: 1.2500, 1.2539, 1.2573, 1.2600.
- Support levels: 1.2450, 1.2400, 1.2350, 1.2300.
USD/JPY: the currency pair is forming a new uptrend
The USD/JPY pair is holding in a horizontal trend at 155.14, where the US dollar continues to gain strength, which began at the beginning of the week, while the yen retreats, having lost some of its positions.
Apparently, the Bank of Japan carried out a currency intervention estimated by experts at about $ 60 billion, although there was no official confirmation of such actions. Effective prevention of further weakening of the yen requires active market interventions, given the weakness of domestic economic indicators and the significant interest rate gap between Japanese and American regulators exceeding 5%. In April, the index of business activity in the Japanese services sector reached 54.3 points, which is worse than analysts' expectations of 54.6 points, but better than the previous indicator of 54.1 points, but this was not enough to support the yen last week.
- Resistance levels: 156.00, 158.30.
- Support levels: 154.30, 151.80.
Crude Oil market overview
The prices of American WTI oil are under pressure, testing the level of 77.70 for a possible break down. Investors are focusing on the balance between the supply and demand of hydrocarbons, as well as the geopolitical situation.
Earlier, Russian Deputy Prime Minister Alexander Novak said that an increase in production volumes within OPEC+ is not currently being considered, but circumstances may change due to external factors. While the situation in the Middle East continues to be tense, it is believed that it may return to normal after the end of Israeli military operations in Rafah.
In addition, recent data on the dynamics of oil reserves in the United States provided support for oil prices. A report from the American Petroleum Institute (API) showed a decrease in reserves by 1.43 million barrels after a previous increase of 4.906 million barrels. It is expected that today at 16:30 GMT+2 the Energy Information Administration (EIA) The United States will publish its final statistics, analysts predict a decrease in inventories by 1.430 million barrels after a correction of 7.265 million barrels in the previous period.
- Resistance levels: 79.07, 80.00, 81.00, 82.00.
- Support levels: 78.00, 77.00, 76.00, 75.00.