EUR/USD: the EU currency is developing a positive momentum
The EUR/USD trading instrument continues the bullish momentum started earlier, when the markets started evaluating the macroeconomic data release and the final minutes of the U.S. Federal Reserve's monetary issues summit. The pair intends to keep above 1.1020, but some traders are refraining from deals waiting for the outcome of the ECB (European Central Bank) officials meeting, which may result in 0.50% increase of the key index and continue to comply with the set pace on monetary policy, which will allow the euro zone currency to gain support in the market.
A notable positive signal for the euro was the euro-zone's macroeconomic data unit which showed the consumer inflation rate dropping by 0.4% in January, repeating the value recorded in December and the annual rate dropping to 8.5% from 9.2%, outperforming the investors' estimations by 0.5%. Meanwhile, experts note that due to technical problems there were no data from Germany in the final publication. Analysts of the Department of Economic and Social Affairs of the United Nations (U.N.) noted that economic activity of the European region will decrease to 0.2%, the relative estimate at 3.3% in 2022, since the weakening of the quarantine measures approved to overcome the spread of infection Covid-19, and the released pent-up demand helped stimulate the economy. The EU continues to reduce the region's dependence on Russian gas, remaining vulnerable to possible supply disruptions of the energy carrier.
- Resistance levels: 1.1050, 1.1100, 1.1150, 1.1200.
- Support levels: 1.1000, 1.0928, 1.0850, 1.0800.
USD/CHF: USD remains under pressure
In Asian trade the currency pair USD/CHF continues to decline within the framework of the "bearish" trend created on Tuesday, being at 0.9060, updating the record low of August 2021.
The negative dynamic for the US dollar was intensified by the macro data, which showed the manufacturing PMI (business activity index) from ISM (Institute for Supply Management) dropping to 47.4 points from 48.4 in January, disappointing analysts, who expected the correction to 48.0, new orders also dropped to 42.5 points from 45.1, while the growth to 46.1 was expected.
Swiss publications also failed to meet expectations. Thus, PMI (business activity index) from SVME (Association for Material Supplies and Purchasing) for January fell to 49.3 points from the previous 54.1 points, with a slight increase to 54.8 points.
- Resistance levels: 0.9100, 0.9150, 0.9200 and 0.9250.
- Support levels: 0.9036, 0.9000, 0.8960, 0.8925.
Silver prices analysis
The bank metal is quoted with active growth, having updated the level of 24.20. The stock develops an upward trend formed earlier in response to the final minutes of the US Federal Reserve meeting, where the regulator increased the interest rate by only 0.25% and gave a clear signal to the market that a moderate correction is likely to continue in the future. Contrary to the "hawkish" statements of the regulator's chairman J. Powell about the premature rumors of victory over consumer price growth, market participants expected more.
During today's trading the attention of the market participants will shift to the summits of the UK and EU regulators, as a result of which the investors expect an increase of the interest rate by 0,50% and statements on further plan of actions in the short term. If the U.S. Federal Reserve has more room for maneuver in the matter of monetary parameters, the Bank of England and the ECB (European Central Bank) have restrictions of action, as officials take into account a greater likelihood of economic recession in the region. Meanwhile, most analysts are in the mood to hear bold statements from the "hawks" of the named agencies.
- Resistance levels: 24.20, 24.42, 24.67, 25.00.
- Support levels: 24.00, 23.60, 23.32, 23.00.
Crude Oil market analysis
The benchmark Brent crude oil prices are holding at 84.00.
Meanwhile, the U.S. data on storage reserves for the fifth week in a row gives a signal that the supply prevails over the demand. Thus, earlier API (American Petroleum Institute) announced that it had increased by 6.330mb, while EIA (Energy Information Administration) statistics showed a build-up of 4.140mb, having risen by 0.533mb the day before. The published data intends to act as a negative factor for oil price, however investors don't hurry to react to the reports. Moreover, according to the released report from IEA (International Energy Agency), plans of G7 countries to approve the ceiling for Russian oil quotations in order to limit the supply of raw materials in the markets will not be able to cause serious consequences.
- Resistance levels: 85.50, 92.00.
- Support levels: 80.64, 75.50.