EURUSD: U.S. economy has gloomy prospects
During the Asian trading session, EURUSD is developing a local uptrend at 1.0869 due to the uncertainty of the US dollar.
Despite the local rise in values, the economic recession continues to be the main threat to the European economy, which has all chances to occur by the third quarter of 2023. As it follows from the report of IFO (Institute for Economic Research) published a day earlier, the business climate in Germany strengthened to 90.2 points from 88.6 points, the index of business prospects to 86.4 points from 83.2 points, the economic climate has declined to 94.1 points from 94.4 points amid falling costs for "blue fuel", which allowed companies to reduce spending.
The U.S. dollar is holding near the 101.700 mark in the USD Index due to mixed sentiment among investors on the back of the releases the day before. For instance, GDP (gross domestic product) slowed down from 3.2% to 2.9% in the fourth quarter, contrary to the more pessimistic expectation of -2.6%. The underlying indicator for durable goods orders showed a slight decline of 0.1%, having previously increased by a similar amount, and unemployment claims dropped to 186,000 from 192,000.
- Resistance levels: 1.0920, 1.1160.
- Support levels: 1.0790, 1.0590.
GBPUSD: the "Briton" is testing the local maximum.
The trading instrument GBPUSD is under the influence of contradictory factors and is near the local ceiling for June. The pair is testing the area of 1.2400, but the release of macroeconomic data block returned the advantage to the "bears" in the market.
Recall that a number of investors are trying to assess the US GDP (gross domestic product) in Q4 2022, which has met expectations of a decline from 3.2% to 2.9%, against the forecast of 2.6%. The U.S. Federal Reserve is getting a boost ahead of the first announced meeting of officials this year, scheduled for next week. Experts concede that the demonstrated strength in economic growth will allow the regulator to increase the interest rate by 0.50%, but most analysts expect a correction of only 0.25%. Earlier the U.S. currency gained additional support thanks to statistics on orders of long-life goods that rose 5.6% in December against a 1.7% slump last month while the market was expecting only a 2.5% correction. Excluding defense orders, the figure rose 6.3%, previously down 2.3% for November with an estimate of a moderate decline of -0.1%.
- Resistance levels: 1.2400, 1.2500, 1.2600, 1.2700.
- Support levels: 1.2311, 1.2240, 1.2150, 1.2084.
USDCAD: the pair has moved up slightly
The currency pair USDCAD is quoted by the moderate strengthening, moving away from the local low of November 18.
Earlier, the U.S. dollar reflected a strong decline, ignoring the rather positive publication on the national GDP (gross domestic product) in the fourth quarter of the previous year, where the national economy slowed to 2.9% from the previous 3.2% while analysts were confident to see a decline to 2.6%. Such situation resulted in the forced correction of expectations concerning the further strategy on the issue of further toughening of monetary parameters by the US FRS. Meanwhile, the fundamental scenario, as before, provides for the correction of the interest rate only by 0.25% after the announced meeting on February 1.
- Resistance levels: 1.3350, 1.3400, 1.3450 and 1.3500.
- Support levels: 1.3300, 1.3226, 1.3150, 1.3100.
USDTRY: Turkish regulator leaves inflation expectations unchanged
USDTRY is bullish this morning, hovering around 18.80 amid positive statistics from the US. Contrary to expectations of a larger drop to 2.6% of GDP in Q4 2022, the decline was only 2.9% from 3.2%, which caused confusion among experts regarding further decisions of the US Federal Reserve on monetary parameters following the February 1 meeting, but the main scenario, as before, provides for a 0.25% correction of the index.
Meanwhile, financial authorities in Turkey say that expectations for consumer inflation will remain unchanged at 22.3% this year and at 8.8% in 2024. Officials emphasize that they will continue to follow the current vector in the issue of monetization, and the growth rate of credit costs will be tied to the inflation target within the establishment of a financial balance, as for December the value decreased to 64.27% from 84.39% with zero dynamics of interest rate adjustment. The U.N. experts' estimates reinforce confidence in the positive scenario that inflation will slow to 42.4% by 2024 and national economic growth could strengthen by 3.7%.
- Resistance levels: 18.8000, 18.8500, 18.9000, 19.0000.
- Support levels: 18.7500, 18.6815, 18.6390, 18.6000.