EURUSD: the "bulls" have taken the initiative
The currency pair EURUSD is trading in moderate growth, making up for the losses of the last three days, when the asset updated the local lows of January 6. The pair traded at the level of 1.0600 waiting for new stimulus.
Moderate support for the single currency was provided by the previously released inflation data of the European region in January, which showed monthly index dynamics at -0.2% instead of -0.4% and annual inflation at 8.6% from 9.2%, moreover, negative correction was demonstrated in 18 countries of the European alliance. The level of the core index for the month showed zero correction at the previous level of 0.8%, and for the year it strengthened to 5.3% from 5.2%. The EU statistical office released a report that listed Hungary (26.2%), Latvia (21.4%) and Czech Republic (19.1%) as the leaders of the rapid growth, while Spain showed 5.9% and Luxembourg 5.8%. Meanwhile, representatives of the European financial authority stated that it is too early to talk about the beginning of monetary easing, as some correction of the trend is probably due to lower energy prices which decreased to 2.17% in January, rather than a fundamental change in the dynamics.
- Resistance levels: 1.0600, 1.0654, 1.0700, 1.0765.
- Support levels: 1.0550, 1.0500, 1.0450, 1.0400.
USDCAD: Quotes depend on monetary factors
The USDCAD made a two-month high at 1.3580 due to positive minutes from the last U.S. Federal Reserve meeting.
According to the report of the financial authorities, the slowdown in consumer prices in the U.S. economy has not had the necessary effect, therefore monetary parameters will tighten further, and some officials suggested that the interest rate correction may increase the step back to 0.50%. Economists noted that the published document only increased the "hawkish" mood among officials, because the positive January employment data and weak inflation figures were not yet available at the time of the meeting. The continuation of the interest rate strengthening will lead to the strengthening of the American currency against the world currency basket, even at the moment the US dollar gets the support from the news, on the other hand it will increase investors' concerns over the economic indicators, which have not yet exhausted the safety margin. So, the earlier data showed a decline of the economic growth in Q4 2022 down to 2.7% from the previous 3.2%, while still being in a strong position.
- Resistance levels: 1.3550, 1.3672, 1.3732.
- Support levels: 1.3427, 1.3305, 1.3244.
NZDUSD: The instrument is in a corrective movement
NZDUSD is moving under the influence of contradictory market factors, located in the area of 0.6230, having retreated to the level of the beginning of the week, February 20. The main support to NZDUSD during the week was provided by the market signals of the continuation of monetary tightening steps and interest rate hike by 0.50% on the results of the meeting of the New Zealand Central Bank officials, reaching the target of 4.75%, as analysts predicted. The financial watchdog did not share its plans for the future, but economists were positive about the prospect of another rate hike at the current or lower rate.
- Resistance levels: 0.6250, 0.6288, 0.6350 and 0.6400.
- Support levels: 0.6200, 0.6155, 0.6100, 0.6050.
USDTRY: Turkey's central bank has changed its key indicator
During the Asian session, the trading instrument USDTRY is rapidly recovering the losses incurred the day before, when the asset started the session with strong volatility and failed to consolidate in the positive zone. The pair is currently testing 18.8822.
Investors are assessing the results of the Turkish Central Bank meeting that decided on Thursday to lower the interest rate by 0.50%, renewing the target of 8.5%, which coincided with market expectations and was a necessary measure to try to mitigate the consequences of the natural disaster that took the lives of more than 42.0 thousand people. The authorities' estimate of the losses incurred is $50.0 billion and the company's estimate of $84.0 billion. Experts note that $70.0 billion is needed just to fix the destruction of infrastructure, buildings and the power grid. There is now a massive government project for people living in earthquake-affected areas that provides payments to companies with severe or moderate property damage to meet their stated obligations to their workforce. In addition, there is a ban on employers laying off employees in some of the cities most affected by the devastation, which will provide some support for the nation's population. Economists are assuming that the natural disaster could only budget Turkey $100.0 billion and economic growth will decline by 1.0-2.0% in 2023.
- Resistance levels: 18.8818, 18.9128, 18.9500, 19.0000.
- Support levels: 18.8500, 18.8281, 18.8000, 18.7500.