GBP/USD: awaiting key economic data from the US and the UK
The GBP/USD currency pair shows a multidirectional movement, approaching the level of 1.2630 and continuing to rise after a significant pullback at the start of last week. At the same time, market activity remains subdued in anticipation of important economic reports from the United States and the United Kingdom.
Investors are looking forward to analyzing the upcoming report on the UK labor market for the period December–January. It is expected that the growth of average wages with bonuses will decrease from 6.5% to 5.7%, and without bonuses — from 6.6% to 6.0%. The unemployment rate is also projected to decrease from 4.2% to 4.0%. With the start of the American trading session, attention will switch to the January US inflation indicators. While no significant changes are expected, the market hopes that the data may prompt the Federal Reserve to ease monetary policy. Forecasts indicate a possible decrease in the consumer price index from 3.4% to 3.0% on an annual basis and from 0.3% to 0.2% on a monthly basis.
- Resistance levels: 1.2650, 1.2700, 1.2746, 1.2800.
- Support levels: 1.2600, 1.2550, 1.2500, 1.2450.
USD/CHF: the currency is stable near the peak values on December 13
During the Asian trading session, the USD/CHF currency pair is experiencing fluctuations, trying to overcome the 0.8750 threshold and remaining near the peak values recorded on December 13, amid a decrease in the likelihood of an early interest rate cut by the US Federal Reserve.
Also this week, inflation data from Switzerland will be closely studied, where price growth is projected to slow from 1.7% to 1.6% and stabilize at 0.0% both monthly and annualized. At the same time, during the Chinese-Swiss strategic dialogue, the desire to strengthen open economic ties was emphasized. Swiss Foreign Minister Ignazio Cassis expressed readiness for deep cooperation with China in the fields of finance, science, innovation, education, intellectual property protection and environmental development.
- Resistance levels: 0.8760, 0.8800, 0.8820, 0.8850.
- Support levels: 0.8730, 0.8700, 0.8665, 0.8630.
AUD/USD: the exchange rate decreases as the reverse head and shoulders pattern is executed
The AUD/USD currency pair shows a downward trend, stabilizing around 0.6515 against the background of disappointing Australian economic statistics.
The Australian Bureau of Statistics report for December shows a decline in retail and wholesale trade by 3.3% and 3.1%, respectively, with a decrease in volumes in eight of the thirteen sectors. The mining industry and the water supply sector are particularly affected, with falls of 6.6% and 3.6%. At the same time, the construction sector and catering services showed growth of 13.9% and 6.1%. Consumer spending increased by 2.3%, which was the lowest growth since February 2021.
The market reaction to the speech by Reserve Bank of Australia representative Michelle Bullock was positive. She pointed out that the RBA could lower the interest rate without waiting for inflation to hit the target range of 2.0–3.0%, although the possibility of tightening monetary policy remains open. Bullock suggests that even with an optimistic scenario for Australia's economic development, a significant decrease in inflation below target values in the next four years is unlikely.
- Resistance levels: 0.6550, 0.6620.
- Support levels: 0.6490, 0.6380.
USD/JPY: Yen may update record low
The Japanese currency is losing ground against the US dollar, with the USD/JPY pair moving towards the peak values of autumn around 151.70.
Due to the current economic situation, the Japanese currency is not showing strengthening, and without repeated intervention by the Bank of Japan in the market, similar to the autumn one, a sharp drop in the exchange rate may follow. According to the latest data, bank lending in Japan increased by 3.1% in January, accelerating from the previous 3.0%, while the current account balance decreased to 0.744 trillion yen from 1.926 trillion yen. The increase in purchases of foreign bonds was observed from 385.5 billion yen to 456.6 billion yen, while the volume of foreign investments in Japanese stocks decreased from 721.0 billion yen to 308.4 billion yen.
- Resistance levels: 149.90, 151.70.
- Support levels: 148.30, 146.00.