EUR/USD: experts expect the rate to be kept at 4.50% at today's ECB meeting
During the Asian trading session, the EUR/USD currency pair is losing ground, rapidly approaching the level of 1.0547, while continuing the downward movement that started on Tuesday.
Market participants are eagerly awaiting the results of today's European Central Bank (ECB) monetary policy deliberations, and are refraining from taking active actions for now. Preliminary indications are that rates will remain unchanged, with deposit rates at 4.00%, margin rates at 4.75% and prime rates at 4.50%. The decision is expected to be based on a slowdown in inflation, which was below forecasts: the September consumer price index came in at 4.3%, down from the previous 5.2%. Regarding the German economy, the Institute for Economic Analysis (IFO) recently adjusted its forecasts upwards: October's estimate rose from 83.1 points to 84.7 points, the current situation assessment rose from 88.7 points to 89.2, and the business atmosphere index changed from 85.8 points to 86.9 points.
- Resistance levels: 1.0620, 1.0750.
- Support levels: 1.0500, 1.0370.
USD/CAD: following the decision of the Bank of Canada quotes have a chance to surpass the March peak.
The USD/CAD trading instrument is approaching 1.3815 and aims to overcome the March peak at 1.3830.
After a series of rate adjustments since March 2022, the Bank of Canada has set the rate at 5.00%. It was recently noted that regulators are still concerned about the prolonged slowdown in inflation and do not rule out the possibility of resorting to more drastic action if the economic situation worsens. The bank also lowered its GDP forecasts for 2023 from 1.8% to 1.2% and adjusted its inflation forecast from 3.7% to 3.9%. However, inflation is expected to return to 2.0% through 2025. So, while tight monetary policy may be putting the brakes on economic growth, it cannot yet fully contain rapidly rising prices.
- Resistance levels: 1.3830, 1.3960.
- Support levels: 1.3690, 1.3510.
Silver price analysis
Quotes of the precious metal are moving upward, approaching the level of 23.00, waiting for stimuli for further movement.
The escalating situation in the Middle East continues to stimulate interest in silver. Experts believe that worrisome sentiment will persist in the near future, especially with a possible Israeli land intervention in Gaza. Meanwhile, financial activists are waiting for key decisions from the world central banks: after recent statements from the Bank of Canada, the ECB meeting is expected today, and next week - the U.S. Federal Reserve. At the moment, most economists believe that the Fed will not further tighten its policy. However, the publication of statistics on GDP for the third quarter and consumer spending may adjust their forecasts. Current estimates suggest that the US economy will grow from 2.1% to 4.2% and the core inflation rate will increase from 0.1% to 0.3% month-on-month in September, with a year-on-year slowdown from 3.9% to 3.7%.
- Resistance levels: 23.00, 23.32, 23.60, 23.83.
- Support levels: 22.70, 22.46, 22.21, 22.00.
Crude Oil market analysis
Brent prices are experiencing a correction and are falling below the level of 88.55. Market sentiment continues to be shaped around excitement over a possible escalation in the conflict between Israel and Hamas. However, recent news of the US and Saudi Arabia seeking a "humanitarian truce" and temporary suspension of hostilities has given the market optimism.
According to the American Petroleum Institute (API), oil inventories fell by 2.668 million barrels, after declining by 4.383 million barrels the previous week. At the same time, a report from the Energy Information Administration (EIA) showed an increase of 1.371 million barrels in inventories, after a previous decrease of 4.491 million barrels. U.S. refining adjusted -0.207 million barrels, compared to last week's 0.193 million barrel increase.
Investment appetite is also affecting price performance. After it fell at the beginning of the week, the last two days it is going up again. Thus, according to the Chicago Mercantile Exchange (CME Group), on Monday the open interest amounted to 723.1 thousand positions, but by yesterday this figure reached 1.056 million positions.
- Resistance levels: 89.80, 92.50.
- Support levels: 87.20, 83.70.