EURUSD: EU GDP has gloomy prospects
The EURUSD trading instrument slowed down, testing 1.0747, as the euro zone economy is predicted to grow negatively.
According to the forecast published earlier by the international rating agency Moody's Investor Service, the GDP (gross domestic product) will grow by 0.6% next year with the preliminary forecast of 4.5% as the pressure is getting higher due to the energy crisis and inflation. The most vulnerable might be Slovakia, whose economy will shrink by 1.4%, Poland and Hungary by 0.2%, while the Czech Republic might show -0.3% and Croatia by 1.3%. The biggest pressure on the value will be from Germany, whose correction will be -1.8%. As a result, contrary to the forecasts of slowing inflation, the outlook for a speedy recovery in the region is very mixed.
- Resistance levels: 1.0800 and 1.1000.
- Support levels: 1.0620, 1.0400.
USDCHF: The pair is waiting for the macroeconomic data from the USA
"The American reflects a mixed trend against the Swiss franc in morning trading, being in the area of 0.9220. The pair stabilized after having finished its plummet at the end of the previous week and continued on Monday, but investors were waiting to see the December U.S. inflation data due on January 12.
According to preliminary estimates, the data will be able to guide the Fed officials to determine the pace of key indicator correction in February, but we can already predict that the rate increase will not exceed 0.25%. Economists expect a downward trend in consumer inflation to 6.5% from 7.1% or to 5.7% from 6.0% if the food and energy group is excluded.
- Resistance levels: 0.9250, 0.9300, 0.9350, 0.9400.
- Support levels: 0.9200, 0.9150, 0.9100, 0.9036.
USDCAD: upward correction in the pair
The trading instrument USDCAD is moving within the multidirectional trend during the Asian session, testing the level of 1.3430. Earlier the American currency successfully moved to a moderate strengthening, having moved away from the local minimum of November 25, updated on Monday.
"The Canadian" gained a little support amid the publication of macroeconomic statistics at the beginning of the week. According to the data, the number of approved applications for construction work in November rapidly strengthened by 14.1%, having previously decreased by 5.3% last month, contrary to experts' forecasts of an increase to 3.7%. In turn, the value of the price indicators of Canadian real estate develop a "bearish" dynamics. Thus, at the end of 2022 the price of individual houses fell by 11.3%, duplexes - by 13.9% and townhouses - by 6.4%, with a reduction of 49.4%, and experts allow the development of the downtrend. As stated by analysts at Meridian, Canada's largest credit union, the end of the Bank of Canada's systemic interest rate hike will provide an opportunity to stimulate demand levels due to lower residential real estate loan prices, and the national housing market could recover rapidly by the third quarter of 2024.
- Resistance levels: 1.3450, 1.3500, 1.3550, 1.3600.
- Support levels: 1.3400, 1.3356, 1.3300, 1.3250.
Oil market analysis
In the Asian trading session, WTI crude oil is showing moderate decline, testing the area of 74.85.
Market participants keep low, refraining from opening new positions while waiting for the key U.S. consumer price statistics in December. It is estimated that the negative dynamics of the index will slow down to 6.5% from 7.1%, allowing the US Federal Reserve to raise the interest rate by only 0.25%, after which there is a high probability of a break in the cycle of tightening of monetary parameters.
Negative for oil were comments from U.S. Department of Energy officials who raised production capacity expectations for 2023 by 70.0 thousand barrels, raising the target to 12.41 million barrels, amid an expected decline in demand to 100.48 million barrels, despite signs of growing economic activity in China.
- Resistance levels: 75.00, 76.00, 77.00, 78.00.
- Support levels: 74.00, 72.59, 71.00, 70.00.