USDCHF: Swiss labour force in deficit
In morning trading the currency pair USDCHF shows a slight decline, revealing the potential of the "bears" who had intercepted the initiative earlier, testing 0.9175 and continuing to lose ground waiting for key macro data from the USA.
The franc gets support thanks to the release of national macroeconomic statistics which showed consumer inflation in January correcting by 0.6%, having earlier declined by 0.2% in the previous month, against analysts' estimates of a slight increase of 0.4%. The annual expression of the price index accelerated to 3.3% from 2.8% with an expectation of 2.9%. The Swiss Employers' Association pointed to a labour shortage of 300,000 people, which was a strong obstacle to further economic growth given the priority of part-time job applicants. According to officials, the problem must be solved politically through individual taxation and adjustments in childcare conditions to encourage the country's population to work more, as well as developing mechanisms to attract foreign nationals.
- Resistance levels: 0.9200, 0.9250, 0.9300, 0.9350.
- Support levels: 0.9150, 0.9100, 0.9036, 0.9000.
NZDUSD: The pair has mixed dynamics
The trading instrument NZDUSD is displaying a multidirectional trend, being in the area of 0.6350.
Early in the trading week, market participants noticed the rhetoric of US Federal Reserve officials who said that the regulator should continue raising interest rate to renew the 2.0% target. The agency said the national economy was robust enough, citing strong labour market data that would help keep the economic environment in check as credit prices rose to all-time highs.
The market was trading at a moderate pace as traders waited for the release of the January consumer price data in the United States. Preliminary estimates predict a decline in the annual rate of consumer inflation to 6.2% from 6.5%, while the monthly rate could improve to 0.5% from 0.1%. Considering prices outside the food and energy group sectors, the indicator could change to 5.5% from 5.7%.
- Resistance levels: 0.6350, 0.6400, 0.6450, 0.6500.
- Support levels: 0.6288, 0.6250, 0.6200, 0.6155.
Gold analysis
The precious metal is trading up uncertainly, quoted at 1860.00 moderately recovering losses which allowed gold to renew the local low of January 6.
"Bears" continue to press gold's position with support from the US Federal Reserve, which has now taken the side of the doves, but has recently supported the hawks' strongest measures against a number of other global regulators. However, at the end of the last meeting, officials confirmed that further interest rate hikes will continue, removing support from gold. Meanwhile, the precious metal could support the banking sector, which has been actively building up physical gold reserves since 2023, wanting to survive record inflation with the fewest losses given the risks of a global recession. The World Gold Council said in a report published the previous day that the asset has increased demand in 2022 to 4,741,000 tonnes or 18.0%, marking a new high since 2011. The precious metal's average daily transaction level for January added 35.0% to the previous month and exchange-traded derivatives rose 58%, indicating growing demand for gold.
- Resistance levels: 1869.49, 1886.46, 1900.00, 1915.00.
- Support levels: 1850.27, 1828.22, 1816.62, 1800.00.
Crude Oil market analysis
The morning session shows Brent benchmark oil correcting at 86.00 ahead of the release of monthly forecasts from the OPEC.
Market participants view the local outlook as neutral, having studied the publication of data from the US Department of Energy's Energy Information Administration on expectations for the level of hydrocarbon production capacity in early spring. Thus, according to estimates, shale oil will increase in production by 0.8% or 75.0 thousand barrels per day. The February actual reached 9.282m barrels per day, down from 9.375m bpd last year. Experts are betting on an 80,000 bpd increase in crude production capacity during 2023 to 12.49 mln bpd, and by the end of the year it will be 12.65 mln bpd. Meanwhile, an algorithm has already been announced for releasing an additional 26.0m bpd from the strategic reserves into the market during April-June, without creating pressure on reserves as such a step was previously taken into account in the Congressional calculations for 2023. Currently, strategic reserves stand at around 371.0mmbbl and have held the stated figure for several weeks.
- Resistance levels: 88.10, 95.00.
- Support levels: 82.70, 76.60.