EURUSD: the "bears" have intercepted the initiative on the euro
The EURUSD is trading in a sideways trend, being at 1.0875. The currency pair is showing consolidation, having completed the decline in the previous two trading days, having moved away from April's resistance threshold. Investors are refraining from active actions in the trading session on Monday, waiting for the publication of macroeconomic data from Germany and the EU.
So, the publication of the first estimate of German GDP (gross domestic product) for Q4 2022 is announced for today. Experts' preliminary expectations are inclined to zero trend, having previously increased by 0.4% and the annual rate of strengthening may decrease to 1.1% from 1.2%. In addition, analysts are focused around the announcement of the release of consumer confidence and sentiment in the EU economic environment for January. According to preliminary estimates the figures will show a slight decline to 94.6 points from 95.8 points.
- Resistance levels: 1.0928, 1.1000, 1.1051, 1.1100.
- Support levels: 1.0850, 1.0800, 1.0759, 1.0700.
USDCHF: The U.S. currency trades in different directions
In Asian trading the USDCHF currency pair reflects a multidirectional trend, testing 0.9200, successfully keeping moderate bullish momentum from late last week, where the "American" retreated from the local low of January 20.
The market is focused around the upcoming U.S. Federal Reserve meeting scheduled for Wednesday, for which analysts give a cautious forecast and expect a 0.25% interest rate increase, which will signal economists that the systemic monetary tightening will end soon. Meanwhile, analysts do not rule out the possibility that the correction will continue in one step in the first half of this year, a step of 0.50%, and the U.S. financial authorities will be guided by the indicator of consumer prices and the risk of recession in the national economy.
- Resistance levels: 0.9250, 0.9300, 0.9350 and 0.9400.
- Support levels: 0.9200, 0.9150, 0.9100, 0.9050.
AUDUSD: Australian consumer prices set a new record
The AUDUSD trading instrument reflects a mixed trend, hovering around 0.7100, pending the release of a macroeconomic data set. Moreover, investors are waiting for the outcome of the U.S. Federal Reserve, Bank of England and ECB (European Central Bank) meetings announced for this week. According to preliminary estimates, U.S. officials will increase the key indicator by 0.25%, while European and British regulators will raise the value by 0.50%.
At the beginning of the trading week the currency pair continues to be influenced by last week's statistics. Thus, Australia's consumer price index hit a 32-year high of 7.8% in Q4, manufacturing inflation edged up only 0.7%, down from 1.9% in the quarter, while the annualized rate of manufacturing fell to 5.8% from 6.4%, disappointing analysts who expected a decline to only 6.3%. The negative trend was driven by sharp increases in the cost of food, motor fuel, and housing, but external and internal displacement showed the highest consumption rates, 13.3% and 7.6%, respectively. Meanwhile, the truncated annual average inflation rate reached 6.9%, setting an all-time record.
- Resistance levels: 0.7150, 0.7202, 0.7250, 0.7300.
- Support levels: 0.7100, 0.7050, 0.7000, 0.6950.
GBPUSD: U.S. households cut spending
The local decline in the U.S. dollar trading instrument reflects a correction at 1.2400. "The Briton is holding neutral amid comments at the UK Treasury Department.
Jeremy Hunt absolutely supported the 2022 tax reform project, urging people in retirement to reenter the workforce, because overcoming inflation is only possible by increasing productive activity through new job openings. Some experts strongly condemned this initiative noting that the current situation requires reducing the tax burden, rather than calling on the population to correct the mistakes of the authorities.
- Resistance levels: 1.2500 and 1.2800.
- Support levels: 1.2260, 1.1900.