USD/TRY: The "American" is holding its highest level
The American currency is moving sideways, testing the maximum level at 18,000. The trading floors are not actively trading due to the uncertainty in the global economy.
Meanwhile, Turkey's regulator is ignoring rising inflation and is in no hurry to tighten monetary parameters. Moreover, the decision made on August 19 surprised economists when the agency decided to lower the key indicator by 1.00% at once and the target reached 13.0% in the conditions when inflation has all chances to reach 80.0%. According to the leader of Turkey, the key rate increase will strengthen inflation, which is completely contrary to the practice of the world central banks. Instead, the president believes it is necessary to attract more investment and increase production in the country in order to strengthen exports.
- Resistance levels: 18.3000, 18.5000, 18.6500.
- Support levels: 18.1500, 18.0264, 17.8550, 17.7500.
AUD/USD: the instrument is testing the local lows
The Australian currency trades with insignificant growth, trying to recover the losses incurred the day before, when the pair updated the local minimum of July 18. Experts say the reason for the negative momentum is strong macroeconomic statistics from the U.S., against a moderate news backdrop in Australia.
According to data from AiG Producer Index of Australia for August shrank to 49.3 points against 52.5 points, while the same indicator in the USA from ISM of the same period stayed at 52.8 points, having surpassed the forecast of decline to 52.0 points. The ISM Industrial Employment Rate for August strengthened significantly to 54.2 points from 49.9 points in the prior period, with the market expecting a correction to 49.0 points.
- Resistance levels: 1.0855, 1.0900, 1.1035.
- Support levels: 1.0800, 1.0765, 1.0735, 1.0700.
USD/CAD: The Canadian economy is showing resistance
The rising US dollar gives the USD/CAD pair an opportunity to correct within the upward trend at 1.3158.
The Canadian currency keeps the unique property of resistance against the rising US dollar, as the stability of the national economy allows it to stand the negative effect of rising key indicators and to develop growth. According to the data, June GDP growth reached 0.1%, which allowed the index to continue strengthening for the second quarter in a row, rising 0.8%. The annual index reached 4.56%, exceeding the previous index of 2.90%, strengthening 3.3% year-over-year, with the market expecting a 3.1% strengthening for Q1. Next week the Canadian regulator meeting is announced, in which officials are expected to announce the tightening of monetary parameters. According to preliminary estimates, the Bank of Canada will revise the key figure in favor of a 0.75% growth rate, allowing the target to reach 3.25%, adding to the pressure on GDP. The agency remains cautiously hopeful that inflation will be brought under control before a recession hits the national economy, given the strength of the macroeconomic statistics.
- Resistance levels: 1.3201, 1.3380.
- Support levels: 1.3055, 1.2758.
Oil market review
The price of "black gold" of the WTI grade got a positive signal, ending the three-day "bearish" impulse that allowed the asset to retreat from the local maximum at the beginning of August, updating the local minimum on August 17.
The negative dynamic on the positions of the tool is provided by the market participants' fears on the decrease of the demand on the raw materials because of the recession of the production capacities in Asia-Pacific region, because China continues to follow the strict quarantine measures within the struggle against spreading of Covid-19 infection, which caused closing of many millions of cities, creating barriers for the logistics chain and stopping of large industrial companies. On the other hand, the positive dynamics for the instrument was given by the statistics on fuel reserves in US storages, based on which EIA (Energy Information Administration of the US Department of Energy) reported a decrease of 3.326 million barrels, developing a fall of the previous level by 3.282 million barrels, contrary to the expectations of analysts for a decline of 1.483 million barrels.
- Resistance levels: 90.00, 91.93, 93.97, 96.00.
- Support levels: 86.95, 85.00, 83.00, 81.00.