GBP/USD: the Bank of England will soon announce a decision on monetary policy
The trading instrument is testing the area of 1.2621 being in expectation of the new stimulus for further growth.
Investors are waiting for the final statements on the results of the meeting of the Bank of England officials. Experts agree that the interest rate will rise by another 0.25% to the target value of 4.50%. It is likely that the financial authority will reserve the right to tighten the monetary policy in the future in case of expediency. Market participants have no doubt that the financial authorities will reach the target level of 5.00% to overcome the record inflation rate, which is much higher in the growing economies, members of the G7, which slightly reduced the dynamics of the correction for March to 10.1% from 10.4% for the year, and to 0.8% from 1.1% for the month, but still remains far from the designated area of 2.00%. The household sector showed the greatest vulnerability to the rising cost of food and non-alcoholic beverages in the past 40-plus years, as price tags for those items rose to 15.7% in April over the same period in 2022. Meanwhile, the analyst community fears that increased "hawkish" rhetoric at the Bank of England has the potential to cause serious challenges to the national economy.
- Resistance levels: 1.2640, 1.2679, 1.2750, 1.2800.
- Support levels: 1.2600, 1.2550, 1.2500, 1.2450.
USD/CHF: Swiss branch of Credit Suisse may sell
During Asian trading the currency pair USD/CHF reached the area of 0.8900.
As Reuters reports, the management of UBS Group AG is considering selling its Swiss unit to Credit Suisse AG during the initial IPO attempt as soon as the deal and takeover are completed, but details have not been disclosed. UBS Group AG CEO Sergio Hermotti notes that the merger process is expected to be completed by the end of May 2023, then we can talk about further decisions on business strategy in the company. On the eve of confirmed rumors that the CEO of the absorbed institution Ulrich Körner will be appointed to the board of the formed company, which will remain in charge of monitoring the total volume of investments exceeding the mark of 5.0 trillion dollars, and will be responsible for the integration and orientation of strategy on clients.
- Resistance levels: 0.8900, 0.8930, 0.8960, 0.9000.
- Support levels: 0.8858, 0.8819, 0.8800, 0.8756.
USD/CAD: the pair is developing a sideways price dynamics
The trading instrument USD/CAD is developing a slight strengthening, recovering the previously lost positions and testing the level of 1.3380, expecting new incentives for growth.
Negative factors for the USD were the US consumer inflation data for April which reflected the slowdown in the annual rate to 4.9% from 5.0%, while analysts were expecting the zero trend. The monthly rate accelerated to 0.4% from 0.1% and the core, which excludes food and energy, grew by 0.4% MoM to 5.5% MoM from 5.6% MoM. The macroeconomic block of statistics confirms comments by Fed Chairman Jerome Powell that financial authorities are close to completing a cyclical adjustment of monetary parameters, given the positive economic developments. In turn, rising price tags are still a long way from the regulator's targets, and declines are occurring at a slower pace than economists have recorded by the end of 2022.
- Resistance levels: 1.3400, 1.3450, 1.3500, 1.3550.
- Support levels: 1.3350, 1.3300, 1.3250, 1.3200.
Silver prices
The price of the precious metal is moving in the local sideways channel, testing the level of 24.90.
According to the U.S. Commodity Futures Trading Commission, open transactions in the asset resumed correction to 32,000 from the previous 30,600 last week, and if we consider more local statistics, namely, the reporting of the Chicago Mercantile Exchange, the upward trend resumed since May 7, because futures and options positions strengthened to 91,686. From the previous 42,737 thousand, the analytical community noted the doubling of demand amid continued active opening of positions on the instrument and in the expectation that the upward correction in the metal will soon intensify amid further developments in the U.S. financial environment. At the time of the Silicon Valley Bank liquidation, DJSRBK regional bank indexes were down by only 15.0%, with today's value exceeding -43.0%. When it became clear to everyone that First Republic Bank was shutting down next, PacWest Bancorp took the lead of the collapse, with its share price losing 75.0% immediately, leaving the credit institutions with uncertainty and a high probability of further bankruptcies.
- Resistance levels: 26.00, 27.10.
- Support levels: 24.60, 23.20.