EUR/USD: Negative factors continue to weigh on the euro
The single currency of the Eurozone is showing a negative trend, making another record low and crossing another threshold of 0.9550, which caused the EUR/USD pair to show a decline.
The American currency has been actively strengthening its positions during the last week, especially it was brightly demonstrated last Friday, when the negative statistics was published for the markets. According to the data the PMI (business activity index) of the manufacturing sector in Germany according to S&P Global for September showed a decline down to 48.3 points from 49.1 points. Value of services sector decreased to 45.4 points from 47.7 points against expectations of 47.2 points, composite PMI (business activity index) decreased to 45.9 points from 46.9 points against expectations of 46.0 points. The same euro-area-wide index for manufacturing declined to 48.2 from the previous 48.9 points, and for services to 48.9 points from the previous 49.8 points.
- Resistance levels: 0.9700, 0.9800, 0.9850, 0.9900.
- Support levels: 0.9549, 0.9450, 0.9400 and 0.9300.
USD/CAD: the U.S. dollar strengthens the bullish dynamics
In the Asian trading session, the trading instrument USD/CAD is showing a confident upward dynamic, formed from September 13 and reached the level of 1.3625 with the prospect of growth in the future, having updated the July record of 2020.
Market participants are unanimous in their forecasts that the Canadian regulator will stick to the "hawkish" methods of tightening monetary parameters, the more so as Deputy Central Bank Governor Paul Beaudry said, the core and overall indicators for August were at levels above the target level of 2.0%, despite the slowdown in inflation. Specifically, the Consumer Price Index was at its highest level in more than 40 years at 8.1% over the summer, putting the household sector under unprecedented pressure, accelerating the 10.8% year-over-year rise in the food commodities group. A combination of factors allows experts to conclude that the Bank of Canada will decide to raise the key index by 50.0 percentage points, strengthening it to 3.75% in the summit in October.
- Resistance levels: 1.3650, 1.3700, 1.3750 and 1.3800.
- Support levels: 1.3600, 1.3535, 1.3500, 1.3440.
AUD/USD: instrument consolidation at the level of 0.6500
The AUD/USD currency pair is trading in a moderate downtrend, being at 0.6500 developing a bearish dynamic near the record low of May 2020.
Positions of the instrument are under moderate pressure amid increasing popularity among investors of the U.S. currency due to uncertainty in the markets. At the same time, most trades are made in British and euro zone currencies, while the Australian dollar is supported by Friday's business activity data. According to the statistics, the Commonwealth Bank service sector PMI for September strengthened to 50.4 points from 50.2 points a month earlier, beating the fall forecast to 47.7 points, the S&P Global manufacturing sector reading rose to 53.9 points from 53.8 points last month, just short of the 54.0 points forecast. The Composite PMI (business activity index) edged up to 50.8 from 50.2. The U.S. Business Activity Index remained in the lead, which provided the U.S. currency with a high level of demand.
- Resistance levels: 0.6572, 0.6650, 0.6700, 0.6750.
- Support levels: 0.6485, 0.6400, 0.6320, 0.6250.
GBP/USD: The government's statements are weighing on the pair
Due to the collapse of the British currency to the record low of the last 37 years, GBP/USD traded down to 1.0554.
The key factor for the pair quotes movement was the report of the U.K. Treasury Department where the actions to stabilize the economic situation were announced. So, besides helping to pay for electricity, taxation was named as a priority area of support. The new Finance Minister Kwasi Kwarteng noted that the government is working on an algorithm of actions that can significantly help reduce duties, preliminary estimates assume attraction for the implementation of additional 72.0 billion pounds through a number of ways, including the correction of the volume of benefits for the unemployed, which are now provided by the majority of British subjects. Evaluating the risks, the major market participants began to actively redirect assets into alternative currency pairs, due to which the pound may reach parity against the U.S. dollar in the short term.
- Resistance levels: 1.0800 and 1.1214.
- Support levels: 1.0276, 1.0000.