USDJPY: economists expect decisions of the Japanese regulator
Negative dynamics of the US dollar has influenced positions of USDJPY, which is testing 128.60.
Transaction activity on the trading floors has been actively declining before the start of the Central Bank of Japan summit, scheduled for 5:00 (GMT+2). The price index for corporate goods reflected a build-up in inflation pressures, reaching 10.2% annualized from last year's 9.7%, with expectations of a decline to 9.5%, while the monthly value declined to 0.5% from 0.8%, with estimates of 0.3%. The negative trend may provoke financial authorities to embark on radical decisions. Economists envisage that a sharp change in the vector of monetary parameters in full measure will come only in the spring of 2023. Experts refrain from forecasts on the key indicator correction, however the most probable scenario is considered to be the one where the rate will continue to occupy the level of -10% due to the absence of factors capable of causing serious damage to the national economy. In the meantime, analysts will want to evaluate the statistics on the industrial sector that lost 0.1% in December, which was announced on Wednesday, January 18.
- Resistance levels: 130.41 and 132.90.
- Support levels: 127.16, 123.80.
AUDUSD: The pair is trading in a mixed trend
The Australian currency reflects a moderate strengthening during morning trading, regaining positions lost earlier. According to the outcome, the AUDUSD trading instrument showed volatility on Monday, remaining in minor territory. However, the pair successfully updated the local maximum of August 27. Recall that trading floors in the U.S. were not open because the U.S. population is celebrating Martin Luther King's Day.
Notable support for the instrument were statistics from China and Australia. Thus, the Australian Westpac consumer confidence in January strengthened to 5.0% from 3.0%, having surpassed neutral forecasts of experts. Celestial data showed a decline of GDP (gross domestic product) in Q4 last year to 2.9% from 3.9% which was better than market expectations of 1.8%. December retail sales slid 1.8% having previously shown a decrease of 5.9% while market estimated a further decline to -7.8%.
- Resistance levels: 0.7000, 0.7050, 0.7100, 0.7150.
- Support levels: 0.6950, 0.6900, 0.6850, 0.6800.
Gold prices analysis
The precious metal price is correcting during the APAC trading session, revealing the potential for correction impulse formed earlier on the background of which the instrument managed to retreat from the record peak of April 25. Gold is trading at 1910.00 under bearish pressure due to the strengthening of the U.S. dollar against most of its peers. Transaction activity has been minimized amid the Martin Luther King Day holiday in the U.S.
Meanwhile, gold is finding positive momentum in confirmations that financial authorities in the world's leading economies are considering easing hawkish pressures in the short term. Thus, the Fed may strengthen the interest rate at its February meeting by only 0.25%, after which officials will take a pause in the cycle of monetary tightening. The Bank of England and the ECB (European Central Bank) are also approaching a softening of monetary parameters as the economic recession no longer poses a threat to the eurozone because of the weakened inflation potential and falling energy prices.
- Resistance levels: 1930.00, 1952.53, 1974.22, 2000.00.
- Support levels: 1900.00, 1886.46, 1869.49, 1857.27.
Oil market analysis.
The price of benchmark Brent crude oil is consolidating during the morning session, taking the initiative away from the bears when the asset failed to consolidate positions at its local January 3 peak.
Negative factors are generally of technical nature, because the main trend remains positive. According to the assessment of the UAE (United Arab Emirates) Energy Minister, the current oil market situation is balanced despite the unstable demand. Meanwhile, OPEC+ cartel member countries' production capacity has declined by 3.7 million barrels per day due to lower investment flow into the industry.
Official Beijing reported a strengthening of the national GDP (gross domestic product) by 2.9% in Q4, having previously strengthened by 3.9%, while analysts were expecting the rate to decrease to 1.8%. The quarterly value reflected zero volatility, contrary to experts' estimates of a 0.8% decline. The industrial sector for December declined to 1.3% from 2.2%, beating expectations of a 0.5% decline.
- Resistance levels: 85.15, 86.00, 87.33, 89.20.
- Support levels: 83.89, 82.27, 81.00, 80.00.