EURUSD: Markets await outcome of U.S. Federal Reserve meeting
EURUSD is showing mixed trading, testing the level of 1.0710 and the local maximum of March 15, which was updated earlier.
Meanwhile, ECB head Christine Lagarde said in her speech before the EP Monetary Affairs Committee that the regional economy is rather vulnerable. According to the official, the dynamics of inflation shows sufficient potential to stay high for a long time, and the key indicator is one of the key mechanisms for the stability of the situation. According to the forecast of experts of the Goldman Sachs Group Inc. banking institution, the gross domestic product of the EU will reach only 0.7%, while the previous estimate was 1.0%. The banking crisis that has the potential to affect the financial sector of the euro zone will be able to loosen the hawks' grip on the issue of monetary parameters correction, which will result in increasing the interest rate at the end of the next meeting of the regulatory agency officials only by 0.25% that will help avoid aggravation of the economic situation in the region. A 0.1% fall in inflation in February to 8.5% for the year due to lower energy prices to 13.7% from the previous 18.9% will contribute to strengthening the rhetoric of the "doves". ECB management reminded that officials are aware of the risks and are busy keeping a close eye on developments to apply preventive measures if necessary.
- Resistance levels: 1.0758, 1.0800, 1.0850, 1.0900.
- Support levels: 1.0700, 1.0640, 1.0600, 1.0550.
NZDUSD: The "bears" have high chances to develop the potential
NZDUSD is moving steadily declining, revealing the potential of the "bears", which got the upper hand earlier, when the asset tested the local high of February 16.
The block of macroeconomic statistics published the day before in New Zealand was unable to provide significant changes in the dynamics of the currency pair. Thus, exports in February slowed down to $5.23bn from $5.30bn, imports - to $5.95bn from $7.42bn. Thus, the level of the deficit in the trade balance for February remained at the previous levels of -$15.64 billion. Meanwhile, credit card spending for February unexpectedly gained 25.6% from January's strengthening of 17.9%, contrary to analysts' estimates of a decline to 9.4%.
- Resistance levels: 0.6250, 0.6300, 0.6350 and 0.6400.
- Support levels: 0.6200, 0.6155, 0.6100, 0.6049.
AUDUSD: The RBA has assessed the willingness to raise the interest rate going forward
A weaker U.S. dollar allows the AUDUSD to test the 0.6690 level.
Investors are studying the published reports on monetary issues, including the final minutes of the last meeting of the RBA officials, which have already noted that the agreement on the interest rate adjustment by 0.25% was reached before the meeting. According to the regulator, the national inflation dynamic is at its peak, but the demand for new home loans has collapsed and the construction market is showing enough negative signals for economists as rising prices and high mortgage rates continue to put pressure on the construction industry. The department agrees that subdued inflation will be able to provide an incentive to free up money supply from consumers to invest in the real estate sector even with the current mortgage situation. Based on the agreed arguments, the Reserve Bank of Australia will continue to tighten monetary policy going forward.
- Resistance levels: 0.6770, 0.6980.
- Support levels: 0.6610, 0.6390.
Oil market analysis
In the morning session the price of WTI oil showed a slight decline having attempted to strengthen earlier and is now testing the level of 67.30, developing a drawdown in quotations.
Investors were expecting China's economy to demonstrate higher recovery rates against the background of the rejection of the "zero tolerance" measures, which would remove a number of quarantine restrictions, as well as decrease the volume of raw material extraction capacities in Russia, but these expectations were not justified. In addition, market sentiment is an additional negative factor for "black gold", as traders fear that the banking sector will be too vulnerable to the crisis, catalyzing the global recession, which will affect the demand for energy market. According to the updated forecast released by the financial conglomerate Goldman Sachs, OPEC countries plan to increase the production volumes only by Q3 in 2024, and the price of oil may resume its positions at 94.00 for the next 12 months, after which it will consolidate at 97.00.
- Resistance levels: 68.04, 70.00, 71.00, 73.00.
- Support levels: 67.00, 65.74, 64.00, 63.00.