EURUSD: bulls retain an advantage in the pair
EURUSD is developing a moderate strengthening, testing the level of 1.0950. The upward dynamic has reduced the potential, but the single currency continues to be near the local maximum of February 2.
Technical factors were supporting the quotes, which was only strengthened by the macroeconomic statistics from the Eurozone, giving the market participants hope that the prolonged recession in the region will not be declared. Earlier in FRG the statistics for February foreign trade figures had been released showing that exports had accelerated to 4.0% from 2.5% against the analysts' estimate of 1.4%, imports dynamics added 4.6% to the previous -1.4% while the growth forecast was 1.3%. The trade balance maintained its previous surplus of 16.0 billion euros, missing expectations of a strengthening to 17.0 billion euros. Manufacturers reported a 0.5% decline in the price index for February, having previously lost 2.8%, against experts' expectations of a 0.3% decline, while in the annual figure the slowdown was 13.2% from the previous 15.1%, with a forecast of 13.5%.
- Resistance levels: 1.0957, 1.1000, 1.1051, 1.1100.
- Support levels: 1.0900, 1.0850, 1.0800, 1.0758.
USDJPY: Japan may have power shortages
The USDJPY continues to be under pressure holding at 131.70. "Bears" have kept a strong advantage in the instrument since the beginning of the week, allowing the "American" to retreat from the local high of March 16. The key factor for the downtrend is the expectation of investors that the Fed has exhausted the current interest rate correction cycle. Most analysts agree that the May meeting of the regulator will end with the indicators without another increase, followed by one or two corrections of 0.25%.
Meanwhile, officials in Tokyo have signaled a high likelihood of power shortages as early as this coming summer, citing a plan by energy service companies. Power engineers are making capacity reserves in compliance with the coefficient to consumption above 3.0%, but if some thermal power plants stop working, the figure will collapse sharply. Experts report that the capital's reserve capacity could adjust to 3.9% by the end of August, and to 4.6% for January 2024.
- Resistance levels: 132.00, 133.00, 134.00, 134.54.
- Support levels: 131.00, 130.00, 129.62, 128.62.
USDCAD: US Dollar is moving in correction
During the APAC trading session USDCAD is showing moderate strengthening at 1.3453, developing the "bulls" advantage of the day before, where the pair moved away from the local low of February 16.
The downward trend is being maintained amid the market estimations about the soon closing of the program on tightening of the monetary parameters by the US Federal Reserve System, after which the US currency will lose its main incentive to strengthen its quotations against all competitors in the world currency basket. Moreover, investors are worried about the prospects for the financial sector, given the events since the spring, where the national banking sector was shaken by the news about the liquidation of several large credit institutions, after which the risks of a large-scale crisis continue to exist.
- Resistance levels: 1.3450, 1.3500, 1.3550 and 1.3600.
- Support levels: 1.3400, 1.3350, 1.3300, 1.3250.
GBPUSD: US jobs market sees a drop in vacancies
The U.S. dollar continues to decline, allowing the GBPUSD pair to correct around 1.2486.
The release of the British Service Business Sentiment Index for March is scheduled for today, April 5. Experts expect the index to show zero growth at 52.8 points. According to estimates, the composite value will reach 52.2 points, the same as last month. Meanwhile, the manufacturing sector which was released the day before might see a decline from 49.3 points to 47.9 points which might put the national economy under additional pressure.
- Resistance levels: 1.2590 and 1.2830.
- Support levels: 1.2420, 1.2180.