EUR/USD: macroeconomic data did not contribute to the strengthening of the euroAlthough the US dollar is showing a decline, the EUR/USD exchange rate continues to follow the corrective trend, being at the level of 1.0837.The latest macroeconomic data did not support the euro: in July, the business activity index in the French manufacturing sector fell from 45.4 to 44.1 points, in Germany the decline was from 43.5 to 42.6 points. In the French services sector, the index improved from 49.6 to 50.7 points, while in Germany it decreased from 53.1 to 52.0 points, which led to a correction in the overall indicators for the eurozone from 45.8 to 45.6 points in the manufacturing sector and from 51.9 to 45.6 points in services. As a result, the composite index fell from 50.4 to 48.7 points, returning to the deterioration zone for the first time since March, indicating a slowdown in the Eurozone economy. This, in turn, increases the chances of interest rate cuts by the European Central Bank (ECB) in September and December. Meanwhile, the GfK Group consumer climate index improved from -21.6 to -18.4 points in August, exceeding expectations of -21.1 points amid slowing inflation and improving household incomes due to wage growth.Resistance levels: 1.0909, 1.1021.Support levels: 1.0793, 1.0708.GBP/USD: pound rose on business activity dataAfter a significant rise at the beginning of the month, the GBP/USD exchange rate is now falling against the background of a temporary correction of the US dollar, remaining at 1.2888 during the Asian session.The pound is supported by macroeconomic data: the index of business activity in the manufacturing sector increased from 50.9 to 51.8 points, and in the services sector — from 52.1 to 52.4 points, which led to an improvement in the composite index from 52.3 to 52.7 points. This gives investors reason to expect further strengthening of the national currency until next week, when data on the labor and real estate markets will be published. Such indicators are a recovery from the period of instability caused by the recent parliamentary elections and may contribute to accelerating GDP growth. Nevertheless, most experts believe that the Bank of England will not begin active measures until autumn.Resistance levels: 1.2930, 1.3040.Support levels: 1.2860, 1.2750.AUD/USD: According to Roy Morgan, tax cuts will reduce mortgage pressureThe AUD/USD exchange rate stabilized at 0.6547, moving within the framework of an "expanding" pattern with boundaries of 0.6800–0.6300.Analysts are assessing possible actions by the Australian monetary authorities. Deutsche Bank expressed doubts about achieving the inflation target of 2.0–3.0% in the foreseeable future, which is confirmed by the data of the Melbourne Institute survey, where only 15% of participants believe in an early recovery of inflation after the pandemic. Experts from Roy Morgan believe that the tax cuts that have begun will significantly reduce the proportion of households experiencing mortgage stress if the labor market remains stable and the Reserve Bank of Australia does not raise interest rates. At the same time, the unemployment rate in the country reached 4.1% in June, which makes a correction in the cost of loans less likely, but persistent inflation may stimulate an increase in rates by 25 basis points at the August meeting, creating an additional burden for homeowners. According to RoyMorgan statistics, the number of mortgage borrowers facing late payments increased to 1.6 million or 30.3% of the total, which is 88.0 thousand more compared to the previous month. The proportion of people especially vulnerable to risks (based on their debt service costs) exceeded 1.016 million people, or about 20%, which is significantly higher than the average level over the last decade of 14.5%. Despite a slight decrease, mortgage stress remains high. According to analysts at Westpac Banking Corp., the probability of an increase in the RBA's key rate is estimated at 30%, and the first reduction is not expected until August 2025. In addition, the business activity indices in manufacturing and services showed a correction from 47.2 to 47.4 points and from 51.2 to 50.8 points, respectively.Support levels: 0.6530, 0.6450.Resistance levels: 0.6570, 0.6660.USD/JPY: the prospect of a rate hike by the Bank of Japan stabilizes the yenThe USD/JPY exchange rate continues to fall for the third week in a row, influenced by differences in the monetary policy of the US Federal Reserve and the Bank of Japan, with the current level at around 152.00.The increasing likelihood of monetary policy tightening by the Bank of Japan is supported by the latest data. The July figures indicate a strengthening of business activity, which may indicate a recovery in the country's economy. The consumer price index continues to exceed the target level, reaching 2.8% in June, with the base index at 2.6%. This allows the regulator to count on maintaining high inflation rates, which is facilitated by a significant increase in wages. According to information from Reuters, the Bank of Japan is expected to consider raising interest rates at its July 31 meeting, although specific measures may be postponed until the autumn.Resistance levels: 156.25, 159.37, 160.93.Support levels: 151.56, 150.00, 148.43, ...
On Thursday, AUD/USD stabilized near the 0.6547 mark and continues to form the "expanding formation" pattern with dynamic boundaries between 0.6800 and 0.6300.Analysts are discussing possible steps by the Australian monetary authorities. Deutsche Bank points to household doubts about achieving the inflation target of 2.0–3.0%, confirmed by a survey by the Melbourne Institute, where only 15% of respondents are confident in the recovery of the consumer price index after the pandemic. Roy Morgan believes that the tax cuts that began this month could reduce the number of households experiencing mortgage stress if the labor market holds up and the RBA does not raise interest rates. The unemployment rate rose to 4.1% in June, making a rate hike less likely. However, persistent inflation may force the RBA to raise rates by 25 basis points in August, which will create additional pressure on borrowers. According to Roy Morgan, more than 1.6 million mortgage holders faced repayment problems, which is 88 thousand more than in the previous month, and the number of those who are "extremely at risk" exceeded 1.016 million people, or 20%.Westpac Banking Corp. estimates the probability of an increase in the RBA's key rate at 30%, and a reduction is not expected until August 2025. The indices of business activity in the manufacturing sector and the service sector showed slight changes: from 47.2 to 47.4 points and from 51.2 to 50.8 points, respectively.In the United States, similar statistics showed a decrease in the manufacturing sector from 51.6 to 49.5 points and an increase in the service sector from 55.3 to 56.0 points. This increased the composite value from 54.8 to 55.0 points, confirming the stability of the economy to the "hawkish" policy of the US Federal Reserve. A Reuters poll showed that most analysts expect a rate cut in September and December, with an 86.8% chance of an autumn adjustment.Trading patterns indicates an "expanding formation" model with boundaries of 0.6800–0.6300 on the daily AUD/USD chart. Technical indicators recommend selling: the alligator moves have turned down, and the awesome oscillator histogram is declining in the sales area.It is recommended to open short positions only after the price is fixed below the support of 0.6530.The highest target is 0.6450. We put the stop loss at 0.6590.Purchases are rational after fixing the pair above the level of 0.6570 with a target of 0.6660. We will set the stop loss at ...
USD/CAD: Biden's refusal to participate in the elections strengthened the dollarAmid the active strengthening of the US dollar, the USD/CAD currency pair is experiencing growth, approaching the 1.3730 mark.The Canadian dollar did not find support after the recent publication of retail sales data, which showed a decline of 0.8% to 66.1 billion Canadian dollars in May. Sales fell in eight of the nine industries, with a particularly noticeable decline in the food and beverage sector. The base indicator decreased from 1.2% to -1.4%, with a noticeable decrease in income in all major categories, including food (-1.9%) and alcoholic beverages (-3.3%). There was also a decrease in the e-commerce segment by 3.6% to 3.9 billion Canadian dollars, which is 5.9% of total sales, compared with 6.1% previously.The US dollar maintains its position at 104.00 USDX, having successfully recovered from last week's decline. Joe Biden recently announced his refusal to participate in the next presidential election, explaining this decision in the interests of his party and naming Vice President Kamala Harris as his successor. This event increases the chances of the election of Republican candidate Donald Trump, which may lead to expected changes in economic policy and support the US dollar.Resistance levels: 1.3750, 1.3850.Support levels: 1.3700, 1.3600.USD/JPY: trading data did not support the yenDuring the Asian trading session, the USD/JPY exchange rate strengthened, moving away from the supporting range of 161.70–156.00 and stabilizing at 157.12.The Japanese currency was weakened by the latest data on foreign trade: exports increased by 5.4% in June, falling short of the expected 6.4% and significantly inferior to last month's growth of 13.5%. This is the seventh consecutive month of export growth, but it turned out to be the weakest since the end of the previous year. Imports increased by 3.2%, which is significantly lower than the projected 9.3%. Nevertheless, the trade balance remained in surplus at 224.0 billion yen.At the end of last week, the market reacted to the US labor market data. The number of initial applications for unemployment benefits increased to 243.0 thousand, which exceeded both the projected 229.0 thousand and the previous figure of 223.0 thousand. The total number of recipients of state support also increased from 1.847 million to 1.867 million, which reinforces expectations of rate regulation at the September meeting. According to the estimates of the Chicago Mercantile Exchange (CME Group) instrument FedWatch Tool, the probability of this is 94.0%.Support levels: 156.20, 152.90.Resistance levels: 158.30, 160.70.AUD/USD: the rate retreats from the upper limit of the expanding patternIn the context of the strengthening of the US dollar, the Australian dollar/AUD/USD is experiencing a decline, with the current exchange rate of 0.6664.The Australian currency is weakening after the latest reports on the state of the labor market: the unemployment index, taking into account seasonal fluctuations, increased from 4.0% to 4.1%, excluding seasonal factors, it remained at 4.0%. Labor force participation increased slightly from 66.8% to 66.9%, then stabilized at 66.8%. The number of full-time employees decreased by 43.3 thousand to 9.944 million, while the number of part-time employees decreased by 6.8 thousand to 4.461 million. This trend supports a negative mood in the labor market, which prevents the Reserve Bank of Australia (RBA) from taking decisive action. As a result, investors do not expect a reduction in interest rates in the near future, which further puts pressure on the Australian dollar.Resistance levels: 0.6680, 0.6760.Support levels: 0.6650, 0.6580.Gold market analysisGold quotes have again reached the level of 2400.0, but this week the price is influenced by key economic factors.Changes in the policy of the US Federal Reserve System have a significant impact on the price of gold, which may decide to cut rates as early as September, reducing them by 25 basis points. According to the CME Group FedWatch Tool, the probability that the Fed will switch to a more lenient policy at the September 18 meeting already reaches 91.7%. In addition, the recent decision of US President Joe Biden not to participate in the election campaign also helps to strengthen opinion about a possible reduction in interest rates this year, especially in the context of Donald Trump's possible return to power and his plans to reform the national economy.Support levels: 2385.0, 2290.0.Resistance levels: 2420.0, ...
AUD/USD analysis on July 22, 2024On Monday, amid the strengthening of the US dollar, AUD/USD is declining and is currently trading near the 0.6664 mark.The Australian currency weakened after the publication of labor market data for last week, where the seasonally adjusted unemployment rate rose from 4.0% to 4.1%, and without taking them into account remained at 4.0%. The share of the economically active population of Australia increased from 66.8% to 66.9%. Full-time employment decreased by 43.3 thousand to 9.944 million, and part-time employment decreased by 6.8 thousand to 4.461 million. This negative trend in the labor market is deterring Reserve Bank of Australia (RBA) officials from taking active action, and investors do not expect an interest rate cut in the near future, which puts pressure on the Australian dollar.The US dollar index is trading at 104.00, receiving support after Joe Biden's decision to withdraw from the presidential election, naming Vice President Kamala Harris as his successor. This statement increases Donald Trump's chances of winning and strengthens expectations of changes in the national economy, which supports the dollar.AUD/USD technical analysis for todayOn the daily chart, AUD/USD is adjusted, retreating from the resistance line of the "expanding formation" pattern with dynamic boundaries of 0.6800–0.6300.The main forex indicators still retain a buy signal, but it is already quite weak. The averages of the alligator indicator have broken the fan and are turning down, narrowing the range of fluctuations, and the awesome oscillator is falling to the zero line, although it still remains in the buying zone.Short positions can be opened with a decrease and consolidation of AUD/USD below the level of 0.6650 with a target of 0.6580. The stop loss is set at 0.6700.We consider purchases when the pair grows and strengthens above the level of 0.6680 with a target of 0.6760. In this case, we will set the stop loss to ...