EUR/USD: upward trend has a big potential
The single currency in Europe is set to take advantage of the slowing U.S. dollar in the EUR/USD pair, but the long-term growth prospect is very low. The instrument is testing the level of 0.9857.
The pressure of negative factors on the Eurozone economy is only increasing ahead of the heating season. Earlier the data on the Italian Consumer Price Index for September came out, which rose by 0.3% year-on-year to 8.9%, outperforming the 8.4% level of the previous quarter, thus completing the stable value dynamics over the last two months in a row. Investors await the publication of data from the ZEW (Center for European Economic Research), which will allow assessing the economic situation in Germany. According to the forecasts the index of current economic conditions in October may show the correction to -68.0 points from the current -60.5 points and the index of economic activity to -65.7 points from -61.7 points.
- Resistance levels: 0.9940 and 1.0190.
- Support levels: 0.9720 and 0.9540.
GBP/USD: The pound got positive momentum
The British currency quotes demonstrate multidirectional dynamics, testing the level of 1.1400 at the local maximum of October 5.
Bidders are trying to assess more accurately the personnel changes at the Ministry of Finance, which can bring more uncertainty. Let's remind, last week was marked by dismissal of the head of the financial authorities of Great Britain Kwasi Kwarteng who held the post only 38 days. The dismissal was preceded by a scandal and a strong barrage of criticism of the government strategy to reduce the tax burden, which led to a precipitous drop in the pound on the stock exchanges. The Bank of England had to intervene, sending 65.0 billion pounds to buy government bonds. Meanwhile, Jeremy Hunt, who was head of the British Foreign Office in 2018-2019, was appointed as Minister of Finance of the United Kingdom. The official's first comments were assurances that the fiscal burden on the country's affluent class would remain the same, and authorities would return planned duty increases in parallel with government spending cuts. The return of fiscal and tax strategies to a conservative approach calmed the trading floors, but experts continue to observe a new round of political crisis in the government. Querteng, for example, stated that Liz Truss will soon be forced to resign.
- Resistance levels: 1.1494, 1.1600, 1.1700, 1.1800.
- Support levels: 1.1300, 1.1210, 1.1060, 1.0922.
AUD/USD: the instrument is set to build on the bullish momentum
The currency pair AUD/USD is trying to keep the moderate upward dynamics, reaching the level of 0.6310, getting ready to continue growth.
During Tuesday's trading session investors want to assess the final minutes of the RBA (Reserve Bank of Australia) meeting on October 5 where the regulator increased its key indicator by 0.50 percentage points and the target reached 2.60%. Moreover, the regulator sent an unambiguous signal of its intention to gradually tighten monetary parameters in the future. Officials hope that at the end of this year the inflation index will not exceed the mark of 7.5%, and by the end of 2023 the target pressure will decrease to 4.0%, continuing the decline in 2024 to 3.0%. The department also noted the tightness of the unemployment situation, as firms in the first 2 quarters of this year did not face staff shortages, but the number of unemployed citizens stood at 3.5%, marking a 50-year low. In the short term, the Central Bank predicts an increase in the number of unemployed due to the downturn in economic development.
- Resistance levels are 0.6362, 0.6450, 0.6522 and 0.6572.
- Support levels: 0.6250, 0.6200, 0.6140 and 0.6100.
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USD/CHF: The U.S. dollar has resumed its decline
During the morning trading session the instrument USD/CHF is under the momentum of the "bears", formed earlier, when the pair was near the record high at 1.0000, now testing the level of 0.9930, waiting for the next signals.
Analysts expect key statistics from Switzerland on Thursday, where they will be able to assess the import, export and trade balance for September. According to the preliminary estimation the surplus figure will strengthen to 3.588 million Swiss francs against the previous 3.424 million Swiss francs.
- Resistance levels: 0.9948, 1.0000, 1.0050 and 1.0100.
- Support levels: 0.9914, 0.9868, 0.9807, 0.9762.