EURUSD: energy crisis hurts Europe
The euro is showing a moderate strengthening, recovering positions after the "bears" activity the day before. Currency pair EURUSD demonstrated a quotes slump at the last two sessions of the previous week having moved away from the local maximum of June 8.
The energy crisis caused unprecedented damage to the euro zone economy due to the decision to refuse gas supplies from Russia. According to analysts at Bloomberg Publishing House, the EU lost about $1.0 trillion after an active increase in energy costs amid a Russian attack on Ukraine in late February this year: the calculation takes into account the increased tariff for households and businesses, compensated by a government program for places. In order to prevent shortages of resources in the current winter EC approved the minimum reserves of "blue fuel" until February 1 at least 45%, which will make it possible to survive the heating season without interruptions of gas. Meanwhile, analysts say that even if liquefied gas is redirected to the Eurozone and new capacity appears, the likelihood of filling the missing volumes remains very low and the market situation will remain ambiguous until 2026 unless the US and Qatar increase production capacity.
- Resistance levels: 1.0600, 1.0640, 1.0700 and 1.0747.
- Support levels: 1.0550, 1.0500, 1.0450, 1.0400.
USDCAD: The "American" is near the local maximum
During the Asian trading session, USDCAD is displaying a mixed trend, testing the level of 1.3675.
The U.S. dollar has been under pressure since Friday of last week due to mixed macroeconomic statistics in the U.S. According to which PMI (business activity index) in the service sector from S&P Global for December fell to 44.4 points against 46.2 points earlier while the growth was estimated at 46.8 points. The manufacturing sector index fell to 46.2 points from 47.7 points while the correction was expected at zero, and the composite slid from 46.4 points to 44.6 points. Friday's data in Canada showed positive activity in wholesale sales: in November they managed to strengthen by 2.1%, having decreased by 0.2% in the previous month, while only 1.3% growth was expected. The next release is scheduled for tomorrow with similar data on retail sales and the consumer inflation will be released on Wednesday.
- Resistance levels: 1.3700, 1.3750, 1.3800, 1.3850.
- Support levels: 1.3650, 1.3600, 1.3550, 1.3500.
NZDUSD: The New Zealand currency is trading mixed dynamics
The New Zealand currency is showing moderate appreciation against the U.S. dollar thanks to the momentum created during the previous week. The currency pair NZDUSD showed a strong decline at last Thursday's session amid the "American" strengthening against all competitors.
The "bears" successfully took advantage of the results of the U.S. Federal Reserve officials' meeting the day before. According to the forecasts, the interest rate was increased by 0.50% after four positive corrections of 0.75%. Meanwhile, the head of the regulator said that the level of value will occupy the top positions for a longer period of time from what was planned earlier. In addition, the department officials advocated continuing the fight against the growth of consumer prices, which demonstrate the loss of potential for development in the future. The most recent release a week earlier showed a decline in U.S. consumer inflation to 7.1%, still well above the 2.0% target.
- Resistance levels: 0.6400, 0.6450, 0.6500, 0.6535.
- Support levels: 0.6350, 0.6288, 0.6250, 0.6200.
AUDUSD: bulls will keep the advantage in the long term
The previous week saw the U.S. dollar strengthening against all the assets in the global currency basket, which allowed the AUDUSD to reach 0.6670.
Meanwhile buyers of the Australian currency pause, wishing to lower the price before the release of the final minutes of the RBA (Reserve Bank of Australia) officials meeting on the monetary parameters on December 20, due to which there will be clarity regarding the AUD/USD pair trends - will the "bulls" be able to keep their positions in the long run or will the instrument break through the psychological support at 0.6670 and a deep correction will come.
However, the long-term outlook is mainly upward. Last week the traders tried to reach the pick at 0.6900, but failed and the instrument went to the downside correction, which caused the price to retreat to the area of 0.6670, and at the time of writing it has strengthened a little bit. Long positions with the target at 0.6900 are currently favored, in a negative scenario, changes in price will lead to the targets at 0.6585 and 0.6500.
- Resistance levels: 0.6900, 0.7000.
- Support levels: 0.6670, 0.6585, 0.6500.