USD/JPY: Fed is calling to continue the hawkish vector
The trading instrument USD/JPY is showing moderate strengthening and is testing the 136.00 level. The asset is supported by technical factors and investors' expectations on the further steps of the U.S. Federal Reserve.
In turn, the Japanese currency is deprived of stimulus by the policy of the Central Bank of Japan, which the day before confirmed the continuation of neutral monetary parameters. Earlier, leading economists took part in a survey initiated by Reuters staff, according to which respondents expressed confidence in the increase of the core consumer inflation index for April to 3.4% from 3.1%. Wage gains and stronger price tags for consumer goods and services signal a high probability of such data in publications in the near future. Meanwhile, Japan's macroeconomic data set released earlier in the week showed the value of goods from manufacturers for April rising 0.2% from March's zero, with analysts expecting 0.3%, while the value of corporate goods at domestic prices fell to 5.8% from 7.2%, with an estimate of 6.0%.
- Resistance levels: 136.50, 137.50, 138.50, 139.67.
- Support levels: 135.57, 134.69, 134.00, 133.00.
AUD/USD: sideways dynamics within the boundaries of 0.6820-0.6600
As reported by the Australian Bureau of Data in its published March construction report, the overall rate of approved licenses to erect properties declined from February's figure by 0.1% and the private sector by 2.8%. The overall figure for all categories of properties sagged 5.9%, while new residential buildings fell 6.4%. Applications for the construction of non-residential property decreased in volume by 5.1%. Analysts said that the real estate market data that had given hope for a recovery in Q1, resumed a downward correction in the present, which put the national economy under pressure.
- Resistance levels are at 0.6720 and 0.6820.
- Support levels: 0.6600, 0.6470.
Gold prices
"The "safe-haven" asset is trading slightly higher, recovering positions lost from the uncertain decline the day before, and testing the 2014.00 level.
Moderate pressure on the precious metal was exerted by the news background last Thursday and Friday amid another attempt by the U.S. dollar to strengthen its position. Moreover, decrease of the quotations was caused by the increase of the rates on the US Treasury Bonds and the reconsideration of the FRS plans to correct the borrowing costs in future. The expert community continues to expect the zero dynamics on the interest rate and keeping the value at the target of 5.25%, while the probability of the next increase last Monday did not exceed 4.0%, but after that it increased to 12.0%.
The publication of the data at the end of the previous week, on May 12, acted as a moderate pressure for the US dollar, allowing gold to recover. Thus, the University of Michigan's consumer confidence index for May dropped to 57.7 points from 63.5, contrary to experts' estimations about a decline to only 63.0 points. Today investors will be able to evaluate the business activity announced the day before by the New York Fed.
- Resistance levels: 2030.00, 2050.00, 2065.00, 2085.00.
- Support levels: 2015.30, 2000.00, 1981.46, 1960.00.
Crude Oil market review
During the APAC trading session, the price of Brent crude oil displays contradictory sentiment, holding in the area of 73.75. "Bears" continue to press, using the stimulus of the previous week, pulling back the instrument from the local maximum of May 2. The market assesses the risk of decline in the world GDP due to the rapid correction of the cost of borrowing by the leading regulators, intending to overcome the record inflation in the regions.
Thus, in the first days of May the U.S. Federal Reserve again increased the interest rate by 0,25% to the target of 5,25%, contrary to signals from the banking sector on the continuation of the crisis. Meanwhile, another negotiation between the U.S. leader Joe Biden and congressmen on the correction of the upper "ceiling" of the government debt, announced for the end of last week, was postponed to the first half of the current week against the background of lengthy consultations. If consensus is not reached, the national Treasury Department will no longer service a number of the commitments it has made to the government in full as of June 1.
- Resistance levels: 74.00, 75.63, 77.00, 78.28.
- Support levels: 73.00, 72.00, 71.00, 70.00.