USD/CAD: Quotes hold record highs
The currency pair USD/CAD is growing at a moderate pace in the Asian trading session, testing the record high of May 2020, updated on October 11.
Investors prefer to take a wait-and-see attitude, leaving trading activity at a low level, since today is expected the release of data on the US consumer price index, which will help market participants determine the prospects for the regulator to tighten monetary policy in the future. If the index meets the forecasted decrease to 8.0%, the department is likely to revise the hawkish methods and move to a moderate increase of the index. At the moment analysts are limited by the report on inflation in the manufacturing sector published earlier. Thus, the producer price index for September posted a 0.4% gain, down 0.2% from August while experts were expecting a 0.2% increase, but the annual rate slowed to 8.5% from the previous 8.7%, with the forecasted decrease to 8.4%.
- Resistance levels: 1.3853, 1.3930, 1.4000, 1.4100.
- Support levels: 1.3759, 1.3700, 1.3650, 1.3600.
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EUR/USD: The EU currency is holding steady at 0.9700
The single European currency is moving without any common dynamics in the trading, testing the level of 0.9700.
A moderate positive signal for the Euro was given by previously released strong macroeconomic statistics from the EU, according to which industrial production in August strengthened by 1.5% against a decline of 2.3% in the previous month, against the economists' expectations of a 0.6% growth, while the annual indicator rose by 2.5%, having shown a similar decrease in the previous month, against the forecast of 1.2%. In addition, investors appreciated the rhetoric of ECB (European Central Bank) Governor K. Lagarde, who called on all financial institutions in Europe to cooperate more closely to improve efficiency in the fight against inflation. According to the official's statements, the monetary parameters are counterproductive now, because their correction does not take into account the consequences of the alliance economy in the medium term.
- Resistance levels: 0.9750, 0.9800, 0.9850 and 0.9900.
- Support levels: 0.9666, 0.9600, 0.9534, 0.9450.
USD/CHF: the instrument is aiming for parity
Daily trading session shows a slight strengthening of USD/CHF pair in the framework of lateral dynamics, the instrument is testing the level of 0.9985.
Market participants are eager to assess the key statistical data on the index of consumer inflation in the United States, leaving the trading activity at a low level. The current expectations of inflation correction in favor of reduction prevail among experts, however the position of "hawks" in the department has a sufficient margin of confidence. However, economists and politicians are increasingly concerned about the onset of recession in the global economy. Extreme decisions of the key central banks in the world are more often criticized, and the advisability of monetary policy corrections is questioned, but there are no alternative options to deal with record inflation, which imposes additional responsibility on officials, forcing them to weigh their decisions more carefully in order not to provoke a recession in the global economy.
- Resistance levels: 1.0000, 1.0050, 1.0100, 1.0167.
- Support levels: 0.9948, 0.9914, 0.9868, 0.9807.
USD/JPY: Positive statistics from the U.S. supports the pair
USD/JPY is strengthening in the morning session, hitting 146.90 due to positive US data.
The Japanese regulator remains committed to dovish rhetoric in its monetary policy course. This week the head of the agency stated that the country's financial authorities will continue to pursue an ultra-soft strategy, keeping the key indicator in the negative field, which is now -10% in order to correct inflation within the target of 2.0%, at the same time the official believes that the target can be achieved only with the increase in wages among the population. The next working meeting of the regulator's officials has been scheduled for October 28. If the key indicator is kept at the current levels, USD/JPY has a great potential for further strengthening.
- Resistance levels: 146.90, 149.50 and 152.50.
- Support levels: 144.80, 141.50, 139.00.