EUR/USD: euro zone consumer prices may continue growing
The EUR/USD trading instrument is slightly strengthening, making up for the sharp decline seen the day before, which resulted in a renewal of the local low of April 11. The single currency in Europe resumed its attempts to hold above the level of 1.0900, but is short of stimulus by the end of the week. Technical factors and market panic caused by the increasing probability of default in the USA, as the negotiation process between the Republicans and the Democrats on the debt ceiling correction is far from being completed.
Today analysts expect the release of consumer price statistics in Spain and France. According to the preliminary estimates, the April index calculated according to the EU formula will remain at the same level of 4.1% and 6.9% respectively. In turn, according to the results of a survey conducted in March by the European Central Bank, most consumers expect a continued upward price correction, despite the current reduction in inflationary trends and significant adjustments in the cost of borrowing. Most respondents agreed that the correction could reach 5.0% over the next 12 months, surpassing the February survey result of 4.6% and 2.9% three years later, up from an earlier estimate of 2.4%.
- Resistance levels: 1.0957, 1.1000, 1.1051, 1.1100.
- Support levels: 1.0900, 1.0850, 1.0800, 1.0758.
AUD/USD: market assesses the probable consequences of the default in the U.S.
Currency pair AUD/USD is under the influence of contradictory sentiment, holding in the area of 0.6700. Macroeconomic data bloc from the U.S. and China has strengthened the bears in the asset, which gained advantage amid the global GDP outlook.
Investors are focused around the assessment of the announcement of the U.S. default on servicing the foreign public debt amid disagreements between the Democrats and Republicans, which excludes the agreement between the parties on the increase or suspension of the current national debt ceiling. In the U.S., long consultations in the government are expected, which are associated with an increased likelihood of the most negative scenarios, as participants in the debates are more likely to shake up the situation. Amid the uncertainty, market participants also took a look at jobless claims data. For example, weekly volume for May 5 rose to 264, thousand from 242.0 thousand, with estimates rising to 245.0 thousand, and secondary claims for the week to April 28 rose to 1.813 million from 1.801 million, contrary to an expected increase to 1.820 million.
- Resistance levels: 0.6728, 0.6750, 0.6795, 0.6816.
- Support levels: 0.6700, 0.6670, 0.6641, 0.6590.
NZD/USD: New Zealand currency is actively growing up
During the APAC trading session, the NZD/USD currency pair showed strong bearish dynamics formed earlier and reached 0.6260, developing a decline that has already surpassed the 100.0 pips step from the local peak of February 14.
Negative sentiment in the asset increased at the end of the trading week due to weak macroeconomic statistics in New Zealand. Thus, the manufacturing sector business activity for April rose to 49.1 points from 48.1 points, falling short of the analyst community's forecast of 50.7 points. In its turn, the Reserve Bank of New Zealand revised downward its own inflation estimates for the second quarter to 2.79% from 3.30%, giving experts hope that at the end of the next meeting the regulator will keep the interest rate at the same level.
- Resistance levels: 0.6300, 0.6350, 0.6400 and 0.6450.
- Support levels: 0.6250, 0.6200, 0.6150 and 0.6100.
USD/CAD: global "triangle" pattern holds in the pair
The USD/CAD trading instrument is coming back under the dominance of the American currency and has reached the level of 1.3493.
Total Canadian construction approvals for March rose 11.3% to $11.8 billion, driven by a 32.0% increase in non-residential contracts of $5.2 billion, with ten new projects reported, each surpassing the $100.0 million mark. Residential real estate, after strengthening in February, declined by 0.9% or to $6.6 billion in cash equivalents as the number of building licenses issued for residential buildings reached only 21,400 thousand in March, with experts pointing to the low solvency potential of the population.
- Resistance levels: 1.3550 and 1.3700.
- Support levels: 1.3360, 1.3160.