AUD/USD: developing a bullish momentum
AUD/USD currency pair continues to grow actively, forming a strong upward momentum, which began yesterday. The instrument is currently testing the level of 0.6615, breaking through upwards, making new local highs since May 23. Such growth is due to the vulnerability of the U.S. currency, which is declining at the end of the current week.
The weak macroeconomic statistics from Australia has almost no significant impact on the active growth of the instrument today. The index of trade conditions declined by 1.5% in the first quarter after the previous increase by 1.8%, which is fully in line with experts' forecasts. Mortgage loan originations fell 3.8% in April after rising 5.5% the previous month, while analysts had expected a 3.0% decline. Investment borrowing for construction also declined 0.9% after a previous increase of 3.7%. Commerce Secretary Don Farrell said he will continue to consult on a comprehensive trade agreement with the European Union, negotiations on which began back in 2018. This agreement aims to establish a fair partnership for local producers and exporters. The official praised the benefits of access for Australian products to the European market, as it promotes national economic growth, investment, job creation and higher wages.
- Resistance levels: 0.6635, 0.6670, 0.6700, 0.6750.
- Support levels: 0.6590, 0.6563, 0.6530, 0.6489.
USD/CHF: yesterday's publications have not changed the dynamics of the instrument
During the Asian session, the pair USD/CHF continues to decline, following the downward impulse, which was formed earlier, and is testing the level of 0.9040.
Investors revise their forecasts on the future actions of the US Federal Reserve and assume that the interest rate will not reach the 5.0% level before the end of the year. In their speeches at the two-day meeting on June 13-14, Federal Reserve Bank of Philadelphia (FRB) President Patrick Harker and Philip Jefferson, FRB board member, spoke in favor of not tightening monetary policy. In addition, the U.S. Senate passed by a majority a bill that eliminates the national debt limit until 2025 and provides for cuts in government spending. The document must now be signed by President Joe Biden.
Macroeconomic statistics released Thursday had little effect on the trade instrument, with Swiss exports falling from 27.031 million francs in March to 19.902 million francs in April and imports falling from 22.505 million francs to 17.302 million francs. This led to a decrease in the trade surplus from 4.526 million francs to 2.601 million francs, below analysts' average forecast of 3.822 million francs.
- Resistance levels: 0.9073, 0.9100, 0.9150 and 0.9200.
- Support levels: 0.9030, 0.9000, 0.8960, 0.8930.
EUR/USD: the single currency shows a correction
The currency pair EUR/USD showed insignificant growth, developing the corrective movement, which was formed the day before. Currently, the instrument is consolidating at the level of 1.0770, with the possibility of a break-up, updating the local highs since May 24. Activity in the market remains relatively low, as traders are waiting for the May report on the US labor market, which will affect the decision of the US Federal Reserve System (FRS) on the interest rate. At the moment the probability of the monetary policy tightening at the regulator's meeting on June 14 is 24.0%, while at the beginning of the week it exceeded 40.0%.
Data from the U.S. also put additional pressure on the U.S. currency. The index of business activity in the manufacturing sector released by the Institute for Supply Management (ISM) in May decreased from 47.1 points to 46.9 points, which was lower than the expected 47.0 points, and the index of new orders declined from 45.7 points to 42.6 points, which was significantly lower than the forecasted 44.9 points.
- Resistance levels: 1.0768, 1.0800, 1.0850, 1.0900.
- Support levels: 1.0725, 1.0682, 1.0640, 1.0600.
USD/CAD: investors note the stable Canadian economy
During the trading session in Asia, the pair USD/CAD shows a correction at 1.3416. The Canadian currency strongly strengthened the previous day, climbing more than 110.0 points against the U.S. dollar, influenced by two key factors.
Firstly, the Canadian economy report had a positive impact: gross domestic product (GDP) remained unchanged at 0.0% in March, leading to a quarterly increase of 0.8% compared to the expected 0.4%. The annual GDP figure thus rose to 2.21% from the previous value of 2.07%, virtually eliminating the risks of a recession in the economy.
- Resistance levels: 1.3490 and 1.3630.
- Support levels: 1.3400, 1.3260.