NZDUSD: the "New Zealander" is going to win back its losses
NZDUSD demonstrates a moderate decline, resuming the dynamics of the "bears", completing a brief rise yesterday, where the asset updated the local maximum of February 16, but the "bulls" quickly exhausted its potential.
The negative factor for the pair reduction was the macroeconomic statistics release from the USA on the unemployment benefits claims. Thus, over the last seven days on March 17 the initial claims fell to 191,0 thousand from the previous 192,0 thousand, with analysts' estimates of growth to 201,0 thousand, and the number of secondary claims on March 10 strengthened to 1.694 million from 1.68 million, just under the expected 1.701 million. Investors were disappointed with the housing market dynamics, which reflected the slowdown in new home purchases to 1.1% from 1.8%, with the market estimate of 1.6%.
Meanwhile, at the end of the week investors expect to see macroeconomic data in the U.S. on demand for durable goods, as well as business activity in March from S&P Global. Estimates suggest that capital goods orders outside the aerospace and defense sector will remain flat in February, having previously increased 0.8% in January.
- Resistance levels: 0.6250, 0.6300, 0.6350, 0.6400.
- Support levels: 0.6200, 0.6155, 0.6100 and 0.6049.
USDCAD: pair is affected by contradictory factors
During the morning session USDCAD is moderately strengthening, recovering positions after a slight decline earlier, resuming a test of 1.3720.
The US dollar continues to trade under moderate pressure amid the released results of the Fed meeting on monetary parameters, in which the regulator decided to increase the interest rate by 0.25%, despite the negative sentiment of market participants regarding the situation in the banking sector. The accompanying letter from the officials noted the continuation of the fight against inflation, which continues to be well above the 2.00% target. In addition, participants confirmed the need to adjust the value in the short term, and based on the summary of economic forecasts, the median estimate of the percentage in 2023 will remain at 5.1%, and in 2024 adjusted to 4.3% from 4.1%. Meanwhile, investors agree that the U.S. regulator is in the final stages of a monetary policy adjustment cycle, which will gradually ease the pressure on the dollar, prioritizing real economic conditions and risks in the financial sector, which has already managed to show a negative reaction to interest rate appreciation.
- Resistance levels: 1.3750, 1.3800, 1.3860, 1.3900.
- Support levels: 1.3700, 1.3650, 1.3600, 1.3535.
AUDUSD: bears will be able to hold on to the pair's advantage
During the week AUDUSD tested the support level of 0.6660 due to the published protocols of RBA meeting on March 21.
The trading instrument received a positive signal on the decisions of the US Federal Reserve to increase the interest rate by 0.25% instead of 0.50%, as experts predicted the day before, and strengthened "dovish" vector in connection with the crisis situation in the banking sector, which developed amid the liquidation of conglomerates Signature Bank and Silicon Valley Bank. Negative sentiment shifted to the European Alliance, where a week earlier one of the two long-standing banking groups in Switzerland, Credit Suisse Group AG, issued a statement that it is impossible to fulfill its obligations to depositors in the future. The uncertainty in the financial sector is encouraging investors to divert capital to "safe" assets, which are traditional tools for safeguarding funds in times of crisis in the markets.
- Resistance levels: 0.6870, 0.7000 and 0.7130.
- Support levels: 0.6660, 0.6570 and 0.6480.
USDJPY: Japanese inflation may lose potential
Negative dynamics in the US dollar gives the USDJPY a chance to correct at 130.06.
The yen is set to extend the bullish potential, which was intercepted on Tuesday on the release of the Central Bank of Japan's Opinion Briefing, in which the dominant majority argues for the coming positive economic data. The positive trend is currently supported by the statistics on the consumer price index, which is fully in line with the expectations of the financial authorities. Thus, the nationwide inflation rate for February was 3.3%, lower than January's 4.3%, and the core value, which does not include food group goods and fuel, declined from 4.2% to 3.1%. Business activity in the manufacturing sector in the index strengthened to 48.6 points from the previous 47.7 points, while the services sector increased to 54.2 points from 54.0 points.
- Resistance levels: 131.60, 135.00.
- Support levels: 129.00, 125.50.