USD/CHF: instrument has reached a local maximum
Currency pair USD/CHF is trading mixed dynamics, testing the level of 0.8960 and the local high of May 2, updated a week earlier.
The day before the US dollar got a moderate support amid macroeconomic data releases, but all attempts to hold the updated limits failed. For example, retail sales for April rose 0.4% to a 0.7% decline in the past, contrary to analysts' expectations of a 0.7% consolidation, and excluding motor vehicles rose 0.4% to a 0.5% decline for March the day before. Industrial production strengthened 0.5%, breaking March's zero trend. Production capacity utilization rose to 79.7% in April from 79.4% as expected by experts.
- Resistance levels: 0.8960, 0.9000, 0.9030 and 0.9070.
- Support levels: 0.8930, 0.8900, 0.8858, 0.8819.
USD/TRY: lira is actively losing ground
The USD/TRY trade instrument is actively rallying, having reached the area of 19.7400, and the rate of appreciation has been breaking the records of the recent correction.
The Turkish currency is actively weakening due to the outcome of the first round voting in presidential and parliamentary elections. The incumbent president of the Republic of Turkey failed to overcome the threshold of 50.0% of supporters, in spite of a fairly confident breakaway from the representative of the opposition in power, as a result of which a new vote will be held on May 28. The current leader's government has been actively reforming the economy since 2017, in an attempt to overcome record consumer inflation and keep the Turkish lira afloat. The current president is ignoring the traditional approach of global regulators on monetary parameters by reducing the cost of borrowing, maintaining the hope that credit products will become more affordable and attractive to international investors in the country, causing the Central Bank of Turkey to come under pressure from the government on a regular basis. In turn, markets have expressed fears that the formed inflationary spiral could have very negative consequences for the financial sector in the country.
- Resistance levels: 19.7500, 19.8000, 19.8500, 19.9000.
- Support levels: 19.6530, 19.6000, 19.5500, 19.5000.
GBP/USD: UK keeps recording a slowdown in the economy
The strengthened American currency gives impetus to the GBP/USD currency pair to correct at 1.2479.
The day before the British pound made an attempt to rise, but on Tuesday the statistics on the national employment market negated the achievement of the asset. Thus, the number of unemployed rose from 3.8% to 3.9% in March amid an increase in initial applications for unemployment benefits from 26.5 thousand in February to 46.7 thousand, which set a new record for March 2021, where such a situation was possible due to epidemiological restrictions. This situation reduced labor productivity by 1.4 percent, after increasing by 0.4 percent. The average wage rate maintained its level of 5.8%, having a disincentive effect on new hires.
- Resistance levels: 1.2560 and 1.2680.
- Support levels: 1.2400, 1.2200.
Gold Prices
The precious metal is quoted near the key multi-year mark of 2000.0.
According to the published report of the World Gold Council, analysts noted a slight sentiment in favor of lowering the key value in Q1. For example, first-quarter demand fell 13.0% year-over-year to 1,080.0 tonnes, while the jewelry industry lowered gold demand to 508.6 tonnes, or 2.0%. Investor demand corrected by -51.0% to 273.7 tonnes, while physical gold bars and coins gained 5.0% to 302.4 tonnes. Capital outflows from gold-backed ETFs decreased to 28.7 tonnes from 270.7 tonnes the year before.
In turn, central banks are increasing their purchases of gold to bolster reserves, with the first quarter value renewing its highest peak over the same period in 2022 at 176.0% to 228.4 tonnes.
- Resistance levels: 2010.0, 2050.0.
- Support levels: 1975.0, 1920.0.