AUDUSD: Short-term sideways trend appears in the pair
The AUDUSD currency pair is trading in a moderate decline, resuming the dynamics of the "bears", having completed the two-day growth by the end of the previous week. The pair is in the area of 0.6700 descending correction, while the US dollar is under the pressure of the macroeconomic data and waiting for the release of the final minutes of the US Federal Reserve's meeting, which is announced for the middle of the current week.
Thus, analysts recorded a correction momentum for March consumer environment from the University of Michigan to 63.4 points from 67.0 points with a neutral market expectation, and industrial production for February showed zero growth, contrary to the forecasted decline to 0.2% from 0.3%. Market participants are predicting a hawkish course on monetary parameters from the Fed and a strengthening of the interest rate by 0.25% to reach the psychological threshold of the target of 5.00%, which may encourage regulator officials to take a wait-and-see break amid growing risks to the banking sector.
- Resistance levels: 0.6700, 0.6750, 0.6800 and 0.6853.
- Support levels: 0.6650, 0.6600, 0.6563, 0.6500.
USDCAD: The asset expects new incentives in the market
During the Asian trading the currency pair USDCAD shows a slight increase, holding positions in the area of 1.3720.
Investors keep low dynamics on transactions, wishing to wait for new stimulus to activate the market. Experts continue to focus on the results of the meeting of the US FRS officials which will be held on Wednesday. They will be able to see the concrete decisions on the interest rate and to adjust their estimates regarding the further steps on the monetary policy. The current expectations foresee the increase of the index by 0,25% up to the target value of 5.00% while 26.0% of experts let the neutral dynamics at the current level of 4.75% be maintained. Recall that the cycle of incremental adjustment of the cost of credit borrowing faced significant challenges against the background of the evidence of the crisis in the national banking sector. Thus, the liquidation of Silicon Valley Bank and Signature Bank led the Treasury Department and the Fed to search for additional tools to stimulate economic stability, provoking a sharp increase in the agency's balance sheet and additional spending. The crisis was managed to buy, but investor sentiment did not ignore this fact, now they are concerned that the correction of the key indicator will only increase the shakiness of the situation.
- Resistance levels: 1.3750, 1.3800, 1.3860, 1.3900.
- Support levels: 1.3700, 1.3650, 1.3600, 1.3535.
USDJPY: Experts are waiting to see the inflation data
The trading instrument USDJPY is showing moderate strengthening, set to recover Friday's losses, which caused an update of the local low of February 14. The stock is in the area of 132.00, continuing to rise, but the "bulls" are very limited in potential.
At the end of the week investors are waiting for the consumer price data for February. Preliminary estimates suggest that Japan's inflation rate will fall to 4.1% from 4.3% and the core indicator outside of the food group cost sector has a good chance of showing 3.1%, which is heavily inferior to January's value of 4.2% amid government subsidies for gas and electricity costs mitigating the sharp rise in households' living standards. Moreover, investors are waiting for Friday's statistics on Japanese business sentiment index, preliminary forecasts of which allow for a correction to 47.5 points from 47.7 points by Jibun Bank.
- Resistance levels: 133.00, 134.00, 134.54, 135.57.
- Support levels: 132.00, 131.00, 130.00, 129.39.
Gold analysis
The precious metal is actively moving up towards 1975.0, taking advantage of a window of opportunity as the U.S. financial system is under severe pressure.
Last week was marked by the bankruptcy of several major banks, including Silicon Valley Bank, which holds one of the top 30 credit institutions in the country. The financial uncertainty caused mass deposit closures by depositors, intensifying liquidity shortages, and the US Federal Reserve embarked on a stimulus package allowing banks to borrow from the regulator without an upper liquidity ceiling. Thus, last week the financial sector borrowed a record $300.0 billion from the regulator. By comparison, borrowing amounted to only $111.0 billion during the peak period of the 2008 crisis.
- Resistance levels: 1990.0, 2060.0.
- Support levels: 1950.0, 1870.0.