EURUSD: the eurozone currency is under pressure from the bears
The currency pair EURUSD is demonstrating a slight decline, approaching the local lows of the previous week, before reversing to the upward trend. Investors expect new stimulus for the pair on the market.
Earlier the market participants estimated the statistics of the construction sector production for December: the value decreased by 2.52% in the European region and by 2.0% in the EU countries. Significant potential of consumer inflation index and high price threshold of lending act as negative factors for the sphere, which is only strengthened against the background of supply disruptions, contrary to the revised economic forecasts of the region in favor of improving potential and even the possibility to avoid recession. Finland's head of finance supported the idea of further interest rate increases from the European Central Bank, even after a working meeting in March, disregarding the downward trend in inflation, which will help to reach the limit by the end of the summer. Market participants expect the value to update at the end of August at 3.7% and begin to decline in 2024.
- Resistance levels: 1.0700, 1.0765, 1.0800, 1.0850.
- Support levels: 1.0654, 1.0600, 1.0550, 1.0500.
NZDUSD: the instrument has a steady sideways trend
The currency pair NZDUSD is under the influence of contradictory factors, testing the level of 0.6240. The sideways trend replaced the insignificant corrective growth of the asset earlier, which was supported by the technical factors and quite "thin" market because of the closed markets in the United States on the President's Day holiday.
Meanwhile, a moderate pressure for the instrument NZD/USD is ambiguous macroeconomic background of New Zealand. Thus, the production purchasing prices at the end of Q4 last year by the index increased by 0.5%, having previously strengthened by 0.8% in the previous period against analysts' estimates of growth of 2.4%. Producer selling prices for the same period fell to 0.9% from 1.6%, against expectations of 2.1%. Investors evaluated the published statistics as an indirect confirmation of the decreasing potential of the core inflation, which may allow the Reserve Bank of New Zealand officials to reduce the rate of correction of the key indicator. It should be reminded that the summit of the regulator's board members was announced on Wednesday, February 22, as a result of which the interest rate may be increased by 0.50% or to the target threshold of 4.75%.
- Resistance levels: 0.6250, 0.6288, 0.6350 and 0.6400.
- Support levels: 0.6200, 0.6155, 0.6100, 0.6050.
GBPUSD: Kingdom business activity may show a positive trend
The American dollar is stabilizing in Tuesday's trading session, which allows the pair GBPUSD to correct to the area of 1.2006.
Today, in the afternoon, investors will be able to assess the UK business activity for January, expecting to see positive signals, as the manufacturing sector may reach the level of 47.5 points, beating the forecast of 47.0 points, and the service sector may increase its position to 49.2 points from 48.7 points. This pattern should allow the Composite to strengthen its position to 49.0 points from the previous 48.5 points, allowing it to switch to an upward dynamic after six months of bearish pressure.
- Resistance levels: 1.2170, 1.2440.
- Support levels: 1.1915, 1.1630.
AUDUSD: Bearish sentiment is getting stronger
The trading pair AUDUSD is demonstrating a considerable success, intending to recover the losses of the previous week. The stock trades at 0.6890 and is developing a stronger momentum after the release of the minutes of the RBA officials meeting.
According to the accompanying comments of the regulator, the upward correction following the February 7 meeting was justified, as consumer activity would not allow the national inflation to lose enough of its downside potential, however the agency decided to adjust the figure by only 0.25% instead of 0.50%, after which investors were left disappointed. The current situation with consumer prices is due to a number of factors, not the least of which is the lowest unemployment rate in the last 50 years and reinforced by a significant number of job openings, thus stimulating the household sector to increase spending and stimulate the economy with additional subsidies.
- Resistance levels: 0.7000, 0.7130, 0.7275.
- Support levels: 0.6870, 0.6670, 0.6585.