EUR/USD: positive trends in the German economy are gaining momentum
Contrary to expectations for an improvement in the economic climate in the European Union, during the Asian trading session, the euro shows a correction in pair with the dollar, stabilizing at 1.0868.
The latest data from Eurostat indicate an increase in the consumer price index by 0.6% in February, which is in line with experts' forecasts and helps to lower annual inflation from 2.8% to 2.6%, bringing it closer to the ECB's target of 2.0%. A study by the Center for European Economic Research (ZEW) in March showed a slight improvement in assessments of the current economic situation in Germany and an increase in economic optimism both in Germany and in the eurozone as a whole.
The day will continue with the publication of data on industrial inflation in Germany, which indicates a monthly correction from 0.2% to -0.4% and a moderate slowdown in annual inflation. In addition, statistics on construction production in the eurozone and updated consumer confidence indicators expected to improve are to be disclosed. The market's anticipation of news about future monetary policy will increase after the speech by Christine Lagarde, head of the ECB.
- Resistance levels: 1.0900, 1.0980.
- Support levels: 1.0840, 1.0760.
USD/CHF: experts predict the stability of the Swiss National Bank rate
The USD/CHF pair is showing moderate growth, approaching the 0.8895 indicator in order to overcome it in the direction of an uptrend, while updating the peak values for mid-November 2023. Market activity is characterized by moderation, as market participants take a wait-and-see attitude on the eve of the announcement of the results of the two-day meeting of the US Federal Reserve System. While dramatic shifts in the regulator's approach are not expected, some investors are beginning to doubt the implementation of the plan for three rate cuts within a year. If the regulator indicates the possibility of only two adjustments, this may cause the strengthening of the US dollar.
The Swiss National Bank will also hold a meeting on monetary policy issues tomorrow, scheduled for 10:30 GMT (+2). Analysts assume that there will be no changes in monetary policy, and the rate will remain at 1.75%. The probability of monetary policy adjustments by the Swiss regulator will arise after the decisions of the American and, possibly, European central banks. It is important to note that inflation in Switzerland showed a decrease to the lowest since October 2021, amounting to 1.2% on an annual basis in February. Prices for food and non-alcoholic beverages increased by 0.8% over the year, housing and energy accounted for an increase of 3.1%, and the cost of educational services rose by 1.8%. At the same time, healthcare costs decreased by 0.4%, and transportation costs decreased by 0.5%.
- Resistance levels: 0.8900, 0.8950, 0.9000, 0.9025.
- Support levels: 0.8865, 0.8850, 0.8820, 0.8800.
USD/CAD: US dollar is gaining momentum
During morning trading in Asia, the USD/CAD exchange rate shows strengthening, actively testing the 1.3575 level for an upward breakout. This is happening against the background of yesterday's achievement of new peaks, unseen since December 13, although the bullish mood has subsided a little since then.
The Canadian dollar is under additional pressure due to the country's domestic economic statistics: the February consumer price index jumped 0.3% after stagnating in the previous month, falling short of the expected 0.6%. This led to a slowdown in the annual growth of the index from 2.9% to 2.8%, which is lower than analysts' forecasts of 3.1%, and core inflation decreased from 2.4% to 2.1%. Given that price pressure is decreasing faster than expected, this may help strengthen the cautious position among representatives of the Bank of Canada regarding future monetary policy.
- Resistance levels: 1.3600, 1.3650, 1.3700, 1.3750.
- Support levels: 1.3550, 1.3525, 1.3500, 1.3450.
Gold analysis
During the Asian trading session, gold prices stabilized around the 2155.00 mark. Market participants are being cautious, postponing active trading actions in anticipation of the results of today's announcement following the meeting of the US Federal Reserve. The interest rate is expected to remain at 5.25–5.5%, but the focus is on the prospects for future policy expressed in the comments of the regulator. Market participants mostly adhere to the forecast of the first rate cut in June and possible three adjustments until the end of 2024. If the Fed highlights the risks of inflation and reduces the number of expected downgrades to two, this could strengthen the position of the US dollar.
The next day, the market's attention will switch to the results of the meetings of the Swiss National Bank and the Bank of England, which are expected to leave their current settings unchanged, but express a desire to get acquainted with additional data on consumer inflation for further decisions. At this point, gold is under slight pressure, as it seems that the world's central banks prefer not to rush to change their course, following the policy of the Federal Reserve.
- Resistance levels: 2164.68, 2179.85, 2195.12, 2215.00.
- Support levels: 2150.00, 2134.09, 2120.00, 2100.00.