USD/JPY: The American made a new maximum of 24 years
The U.S. currency showed rapid appreciation after reaching its highest level in 24 years on expectations of a meeting of U.S. Federal Reserve officials.
Meanwhile, data out of Japan the day before showed a 1.0% gain in industrial activity in July and retail sales rose 2.4%, compared to an expected 1.9%. As noted by economists, the level of consumer demand develops a positive dynamic at a fairly strong inflation rate, which reached 2.6% year on year. Recently Junko Nakagawa, a member of the Central Bank of Japan's Monetary Policy Board, noted the possibility that the rising cost of living for the population will have a negative impact on household spending levels, so maintaining an ultra soft monetary policy is very important. The official also expressed the hope that the rate target will return to 2-3%.
- Resistance levels: 139.67, 140.50, 141.50, 142.50.
- Support levels: 138.50, 137.50, 136.50, 135.57.
USD/CHF: USD is getting stronger
The trading instrument USD/CHF keeps its positions at 0.9800 within the upward dynamics. The "American" is moving with moderate growth, having updated the local maximum of July 15, having got a positive signal on the announcement of the US Federal Reserve interest rate increase. Experts expect increase of the key rate by 0,75% due to the position of the "hawks" of the financial authority.
By the end of the week the statistics on the employment rate for August will be published. In case the data conforms to the experts' preliminary estimates, the U.S. regulator will have a basis for development of a tough position on tightening the monetary policy in future. The experts reviewed the report of Automatic Data Processing Inc. and noted the strengthening of the number of private sector employees in August by 132.0 thousand after the previous month growth by 270.0 thousand with expectations of 288.0 thousand.
- Resistance levels: 0.9807, 0.9847 and 0.9900.
- Support levels: 0.9762, 0.9700, 0.9650, 0.9594.
USD/CAD: updating of local maximums
During the Asian trading session, the instrument USD/CAD develops positive dynamics, updating the local maximum of July 14, testing the level of 1.3160 with the prospect of growth due to the expectations of further strengthening of the dollar from the U.S. Federal Reserve. The scheduled meeting of the agency's officials was announced for the next week, and current expectations of economists point to an interest rate hike of another 0.75% as part of the fight against rising inflation. Additional support for the U.S. currency is provided by published macroeconomic data from the U.S.
Having got acquainted with the publications the previous day the experts were disappointed as the national GDP turned out to be lower than the forecasts, which lead to a moderate decline of the Canadian dollar. The updated annual data for Q2 confirmed the positive trend of strengthening by only 3.3% that showed a growth of 3.1% the day before with the market expectation of a 4.4% gain. Monthly national economic growth was up 0.1% in June compared to a zero swing in May.
- Resistance levels: 1.3200, 1.3241, 1.3300, 1.3350.
- Support levels: 1.3150, 1.3100, 1.3050, 1.3000.
The maximum strengthening of the USD Index on a year-to-year basis to the level of 109.000 makes gold prices develop a negative dynamic, testing the level of 1705.0.
The U.S. currency strengthening became possible due to a number of facts, first of all, thanks to the statement of the U.S. Federal Reserve chairman in the frames of the symposium in Jackson Hole. The head of the agency gave the markets the unequivocal intention of the regulator to keep raising the interest rate until the rate of consumer price strengthening is brought under control, later the value is planned to be kept at the "stability level", fixing the effectiveness of the measures taken the day before. According to the official, stable price stability will require decisive application of the full range of possible levers by the national regulator, so economists predict that the next interest rate hike in the U.S. Federal Reserve meeting in September will be 0.75%. According to the head of the Federal Reserve Bank in New York, John Williams, the optimal level to fight inflation should be 3.5%, giving the possibility to expect that the correction could be as much as 1.00%. The rush of the index puts negative pressure on the precious metal's position.
- Resistance levels: 1721.0, 1770.0.
- Support levels: 1696.0, 1650.0.