EURUSD: Sanctions against Russia hit EU gas and electricity prices
During the morning session EURUSD is showing the corrective dynamics from March 8, where the asset held the local lows of January 6, and is now testing 1.0585.
Head of the EC Ursula von der Leyen said that the decline in energy imports from Russia on the background of economic constraints due to the war against Ukraine, the cost of gas and electricity in the Eurozone has increased by 300.0%. According to the official, the collapse of transportation of natural gas from Russia to the European market amounted to 80%, which forced the bloc countries to switch to savings. Thus, in the period August 2022-January 2023, consumption decreased by 19.0% compared to the same period of the last five years, while Finland (-57.3%), Lithuania (-47.9%) and Sweden (-40.2%) showed the highest decrease. The European alliance successfully made up the missing volume from the U.S., Canada and Norway and accumulated 61.0% reserves.
- Resistance levels: 1.0600, 1.0640, 1.0700, 1.0747.
- Support levels: 1.0550, 1.0500, 1.0450, 1.0400.
USDJPY: The potential of the yen was discussed by Deutsche Bank experts
The trading pair USDJPY reflects a moderate rise, being at 136.50, developing growth. "American" continues to recover the positions lost the day before, which was due to the release of the macroeconomic bloc from the United States, according to which the initial applications for unemployment benefits renewed the show of 211.0 thousand, beating analysts' expectations of 195.0 thousand, and the previous figure of 190.0 thousand, and the total value of population, which were approved payments, strengthened to 1.718, million to the previous 1.649 million.
Meanwhile, experts from Deutsche Bank AG allow the Japanese yen to strengthen by 60.0% provided that the national regulator will change the trend in the issue of monetary parameters and the U.S. Federal Reserve will follow suit and move to reduce the interest rate. According to analysts, the yen is "fair value equilibrium" lower by 30.0% (100.00) under current conditions, and Japan's 10-year Treasury securities should yield between 1.5% and 1.6%. At the same time, according to comments from representatives of the Japanese banking institution Mizuho Securities Co. Ltd., after the change of the head in the Bank of Japan, the regulator is likely to continue to maintain the current course of monetary policy until the end of Q2, because the dynamics of inflation is not weakening. Thus, in January the annualized consumer price index accelerated at the highest rate since late 1981, having gained 4.3%.
- Resistance levels: 136.50, 137.50, 138.50, 139.67.
- Support levels: 135.57, 134.54, 134.00, 133.00.
AUDUSD: the pair is trading near the local high
The AUDUSD trading instrument displays moderate strengthening, resuming positions at 0.6600, continuing gains, intending to move away from the local low of November 10, updated by Tuesday's sharp rise in the U.S. dollar. "Bulls" successfully developed the dynamics due to the comments of the head of FRS in the US Congress, where he supported the idea of continuing the interest rates adjustment policy, and stated that the indicator will hold high positions for a long period of time. Taking into account the regulator's position, some investors revised their expectations of the March meeting results and now officials are expected to raise the value by 0.50% rather than by 0.25% as was expected earlier. It also assumes that the target will be updated to 5.60% in the second half of 2023.
Earlier in the publication came the January block of statistics of the Australian construction market, which turned out to be weak. For example, the overall rate of approved applications for construction work fell 27.6% and for private sector construction fell 13.8%, confirming a strong negative trend in the sector amid a systemic strengthening of the interest rate by the Reserve Bank of Australia (RBA).
- Resistance levels: 0.6650, 0.6700, 0.6750, 0.6800.
- Support levels: 0.6563, 0.6500, 0.6450, 0.6400.
USDCAD: the pair is aiming for a 2022 peak
During the current week the USDCAD trading instrument broke through the psychological threshold of 1.3800, which made it possible to continue the upward trend to the previous year's record at 1.3960.
The positive dynamics became possible thanks to the decision of the Bank of Canada to keep the interest rate at 4.50%, despite the high inflation of 5.9%. Accompanying comments of the officials let investors know that the regulator intends to keep the value at the current levels, but remains ready for further correction, taking into account the market environment. In addition, a continuation of quantitative easing program was announced.
- Resistance levels: 1.3960 and 1.4100.
- Support levels: 1.3670, 1.3470.