EUR/USD: statements by the heads of the Fed and ECB will indicate the vector of movement of the currency pair
The EUR/USD currency pair shows fluctuating trends, trading near the psychological barrier at 1.0700. Market activity is moderate, as investors refrain from establishing new positions in anticipation of speeches by the Chairman of the US Federal Reserve Jerome Powell and the President of the European Central Bank Christine Lagarde. It is expected that their words will shed light on the future course of monetary policy, while the analytical community increasingly assumes that the end of tight monetary policy is approaching and points to the middle of 2024 as a potential period of easing rates.
On the eve of these events, economic data from the European Union had an impact on euro quotes. In particular, the September level of retail sales in the eurozone showed a decline of 0.3%, which was worse than the previous indicator of -0.7% and did not reach the predicted value of -0.2%. The annual dynamics showed an increase in the decline from -1.8% to -2.9%, contradicting market expectations at the level of -3.2%. At the same time, German inflation data were in line with forecasts and did not bring support to the currency pair: the price index for consumer goods and services for October remained unchanged month-on-month and increased by 3.8% year-on-year, while the harmonized price index remained at -0.2% and 3.0%, respectively.
- Resistance levels: 1.0730, 1.0765, 1.0800, 1.0850.
- Support levels: 1.0700, 1.0660, 1.0630, 1.0600.
GBP/USD: expectations of a decrease in British economic growth for the third quarter
The GBP/USD currency pair is experiencing a reverse correction, trading near the level of 1.2282 against the background of the strengthening of the US currency.
The October Halifax house price index recorded a 1.1% rise, which was a change from the previous 0.3% decline, and led to a decrease in the annual decline from -4.5% to -3.2%. This indicator has been showing negative dynamics since April of this year, which reflects the ongoing difficulties in the housing market. The mortgage interest rate soared to 8.01% from the previous value of 7.93%, setting a new historical maximum since the start of statistical monitoring. It is expected that new data on GDP for the third quarter will be presented tomorrow. It is assumed that the September estimate will show a change of -0.1%, which may lead to a correction of the quarterly value by -0.1% and reduce the annual economic growth rate from 0.6% to 0.5%.
- Resistance levels: 1.2340, 1.2510.
- Support levels: 1.2240, 1.2100.
USD/JPY: the US dollar is aimed at overcoming the level of 151.00
The USD/JPY pair remains stable, approaching the level of 151.00. The pair maintains a steady upward trend, updating the maximum values of the current month.
Before the new speech of the Chairman of the US Federal Reserve Jerome Powell, traders are cautious in opening positions. In the previous address, Powell did not focus on the upcoming changes in monetary policy. Investors' attention is also focused on the upcoming release of data on the US economy, in particular reports on applications for unemployment benefits. It is expected that the number of initial requests on November 3 will increase slightly, from 217,000 to 218,000, while the total number of those continuing to receive benefits on October 27 may change slightly, from 1.818 million to 1.820 million.
- Resistance levels: 151.00, 151.50, 152.00, 152.50.
- Support levels: 150.50, 150.00, 149.69, 149.30.
USD/CAD: the pair shows growth, setting new peaks for November
In the Asian trading session, the USD/CAD currency pair showed fluctuating trends, maintaining positions near the 1.3800 level and records on November 2, which were revised on a daily basis.
Market participants in the United States are being cautious in initiating new deals against the background of the upcoming address by Federal Reserve Chairman Jerome Powell. His recent statements did not reveal future plans for monetary policy, leaving the market without significant changes in dynamics. On Thursday, information will be provided on the statistics of applications for unemployment benefits, a slight increase in applications is expected from 217.0 thousand to 218.0 thousand for the week received on November 3, and an increase in the number of repeated applications from 1.818 million to 1.820 million for the week ended October 27.
Canadian economic data do not contribute to the strengthening of the local currency: the volume of construction permits in September fell by 6.5% after an increase of 4.3% the previous month, while forecasts indicated a more modest decline of 1.6%. Earlier this week, traders also noticed a correction in the October Ivey business activity index, which fell from 54.2 to 51.9 points.
- Resistance levels: 1.3800, 1.3853, 1.3900, 1.3950.
- Support levels: 1.3750, 1.3700, 1.3650, 1.3600.