NZDUSD: updating the low of November
The New Zealand currency reflects a slight strengthening in the Asian trading session, recovering the earlier lost positions, which allowed the pair NZDUSD to renew its local low of November 30. The trading instrument is at 0.6260 with the prospect of further gains, while investors are reducing trading activity waiting for the release of the final minutes of the U.S. Federal Reserve's meeting for December and the U.S. jobs market report, announced for the end of the week.
"The New Zealander is under negative influence amid the release of a contradictory macroeconomic data block. According to the report, the cost of dairy products for December fell by 2.8%, having previously fallen by 3.8% last month, contrary to analysts' expectations of a positive correction to 0.6%. Disappointing statistics was also the Chinese PMI (business activity index) in the industrial sector from Caixin for December dropped to 49.0 points from 49.4, while beating market expectations of 48.8 points. The negative economic stimulus from China's news backdrop continues to come from new spikes in covid-19 infections, following the loosening of quarantine restrictions. Economists are already leaning towards a longer recovery than expected the day before.
- Resistance levels are at 0.6288, 0.6350, 0.6400 and 0.6450.
- Support levels: 0.6250, 0.6200, 0.6155, 0.6100.
USDJPY: The long-term outlook is for the bears
Earlier, the trading instrument USDJPY made a local low of June, reaching 129.52, but by the end of the day trading the asset has fully recovered its positions.
The Japanese yen was supported by the statements of the head of the government of official Tokyo, who confirmed his intention to hold consultations with the managers of the national property enterprises on the increase in wages for employees within the indexation of payments to level out the inflation rate at 3.8%. According to the official, the authorities are working to establish a framework under which wage payments will be indexed annually, because it will stimulate consumer activity and economic indicators to provide an incentive for continued growth, from which the positive signals will receive the Japanese yen. Fumio Kishida's statement hit the news space when public concern began to surge, as the cost of living was under a severe crisis and the Cabinet of Ministers' rating showed a steep drop.
- Resistance levels: 134.47, 138.05, 139.50.
- Support levels: 130.90, 127.90, 124.10.
GBPUSD: The GDP of the UK is facing serious challenges
Pound shows multidirectional trading dynamics, intending to win back the lost positions earlier. At the moment of writing this article the currency pair GBPUSD is near the local low of November 23, trying to reach the psychological threshold of 1.2000 to overcome it.
The United Kingdom's economic indicators continue to be affected by unprecedented domestic challenges such as high inflation and rising cost of living, which is only amplified by the flow of migration as 45,756 thousand people crossed the Channel last year, also workers are not happy with the working environment in the budget sector. Thus, an alliance of railway, maritime and transport unions (RMT) was formed, which announced a five-day action, which is taking place this week, with the number of participants reaching about 40 thousand railway workers, who put forward their demands for higher pay and cancellation of cuts.
- Resistance levels: 1.2027, 1.2084, 1.2150 and 1.2240.
- Support levels: 1.1900, 1.1800, 1.1700, 1.1600.
Gold Market analysis
After prolonged trading within the ascending slope, the asset successfully went over the limit, taking as a target the July maximum at the level of 1877.00.
Experts predict rapid appreciation of the banking metal throughout the current year to the level of 4000.00, against the background of regular interest rate hikes by the world's leading regulators. Moreover, some economists expect that a number of economies will start recession already in Q1, due to which the precious metal will successfully outflank its competitors as a refuge asset amid conflicting market trends and rising inflation. The World Gold Council confirmed the information of the growing interest of world investors in the asset. Thus, according to the report, central banks bought about 400.0 tons of gold in Q3 2022, almost surpassing the previous record of 241.0 tons in Q3 2018. According to the CFTC (U.S. Commodity Futures Trading Commission), investors increased the volume of net long gold contracts by 1,898,000, renewing a new 6-month high of 58,452,000 transactions.
- Resistance levels: 1877.00, 1918.00.
- Support levels: 1806.00, 1785.00.