NZD/USD: the currency pair is stable at April peaks
The NZD/USD pair is holding near the 0.6010 level and local highs reached on April 10 and updated last week. The weakening of the US dollar on Friday was caused by data on the labor market, which increased pressure on the US Federal Reserve System on the issue of possible rate cuts in the foreseeable future.
In particular, the creation of new jobs in the United States outside the agricultural sector amounted to only 175,000, which is significantly lower than the expected 243,000 and the previous value of 315,000. The growth of the average hourly wage slowed from 0.3% to 0.2% per month and from 4.1% to 3.9% per annum. The unemployment rate increased from 3.8% to 3.9%. A sharp decrease in the ISM business activity index in the service sector attracted special attention from investors — from 51.4 to 49.4 points, with a forecast of 52.0 points. These results reinforced expectations of an imminent Fed rate cut, which, according to analysts, will amount to 50 basis points and will be implemented twice this year. Earlier, Michelle Bowman, a member of the Fed's board, said that inflation is likely to continue to decline despite maintaining current rates, and confirmed her readiness to tighten monetary policy if consumer prices remain above 2.0% or continue to rise.
The day before, data on the index of business activity in the Chinese services sector were also published: the index slightly decreased from 52.7 to 52.5 points, which continues to be considered a positive signal. In New Zealand, the ANZ commodity price index, an early indicator of export price inflation, was presented, which showed an increase of 0.5% after a decrease of 1.3% in the previous month.
- Resistance levels: 0.6030, 0.6047, 0.6082, 0.6100.
- Support levels: 0.6000, 0.5975, 0.5950, 0.5920.
USD/JPY: April business activity in the Japanese services sector showed a decline
The USD/JPY pair is experiencing moderate growth, continuing yesterday's uptrend: the currency instrument is trying to overcome the level of 154.50. Analysts are now actively looking for new catalysts for currency movement and analyzing the factors of the unexpected strengthening of the yen last week. Most experts assume that the Bank of Japan could have conducted currency interventions, clearly warning about the risks of speculative operations and pointing to the influence of traders on the weakening of the national currency. Despite the lack of official confirmation from the regulator, the market analyzes only indirect signs. Experts estimate that funds worth about $ 59 billion could be used to support the yen exchange rate, and in the near future the regulator may seek to keep the US dollar exchange rate in the range of 150.00–155.00.
Today's weakening of the yen is supported by macroeconomic statistics from Japan: the April index of business activity in the services sector, provided by the Ministry of Economy, Trade and Industry, which tracks the cost of services purchased by companies in the main service sectors (excluding manufacturing) and serves as a harbinger of the Tankan index, fell from 54.6 to 54.3 points, despite neutral expectations.
- Resistance levels: 154.50, 155.00, 155.50, 156.00.
- Support levels: 154.00, 153.50, 153.00, 152.50.
Gold market overview
Gold trading shows mixed dynamics, maintaining around the level of 2320.00. Investors are waiting for new growth incentives, while gold is undergoing a minor technical correction and updating the minimum values since April 5 last week.
Gold is supported by ongoing geopolitical tensions in the Middle East. Attempts to negotiate a cease-fire between Israel and Hamas appear to have failed, leading to extensive new Israeli military operations in Rafah. Demand for the precious metal is also increasing in anticipation of a possible rate cut by the world's largest central banks. Among the contenders for the first reduction is the European Central Bank, from which markets expect changes in monetary policy at the upcoming June meeting.
- Resistance levels: 2336.50, 2353.79, 2375.00, 2400.00.
- Support levels: 2320.00, 2300.00, 2285.00, 2265.52.
Oil market overview
Prices for the Brent Crude Oil brand are experiencing an upward correction, exceeding $ 83.00 per barrel amid the lack of significant positive economic data.
Investors' attention was attracted by an announcement from representatives of Shell Plc., a major global producer of hydrocarbons, about its intention to completely exit the South African market after more than a century of presence. According to a press release published on the Johannesburg stock Exchange, the company plans to reorganize its refining portfolio and sell its stake in Shell Downstream SA. It also became known that 700 filling stations under the management of the corporation will be sold, which will be the final stage after the closure of the last processing plant in 2022.
According to Reuters, OPEC+ countries may decide to extend the current production reduction agreement for another three months. The next meeting of the cartel is scheduled for June 1. At the moment, oil prices are close to last year's levels, and despite an increase in production in the United States, Canada, Brazil and Guyana, which compensates for OPEC+ measures, the cartel countries will continue to reduce production until global demand fully recovers.
- Resistance levels: 84.60, 87.90.
- Support levels: 82.50, 79.40.