EUR/USD: euro stabilizes at its local peaksThe EUR/USD pair shows ambiguous trading trends, being near the 1.0870 mark. On the previous day, the euro actively increased in value, updating the maximum values since June 7, but could not hold on to new heights, losing some of the acquired positions by the end of the day. By Friday morning, market activity had significantly decreased.Meanwhile, the latest data from Germany showed that the consumer price index in June remained at the level of 0.1% monthly increase and 2.2% annual growth, confirming the possibility of further interest rate adjustments by the European Central Bank (ECB). In this context, the results of a Reuters survey of leading economists indicate that the ECB may cut rates twice this year — in September and December. However, if inflation, especially in the services sector, stabilizes above the target level, the central bank may limit itself to one adjustment of its policy.Resistance levels: 1.0900, 1.0930, 1.0964, 1.1000.Support levels: 1.0863, 1.0844, 1.0820, 1.0800.GBP/USD: pound is growing on the back of good UK GDP dataDuring the Asian session, the GBP/USD pair stabilizes around the level of 1.2915, while not staying at the recently updated annual highs. This happened after the publication of inflation data, which reinforced expectations of a near-term reduction in the cost of borrowing by the US Federal Reserve. The consumer price index in June slowed to 3.0% per annum from 3.3%, falling short of the projected 3.1%, and the monthly dynamics decreased by 0.1% after stabilization in the previous month. Core inflation also declined, which, together with the latest labor market report indicating a downward revision in the number of jobs created in May, disappointed investors. In addition, the speech by the Chairman of the US Federal Reserve, Jerome Powell, emphasized the need to assess the economic situation as a whole, which increases the chances of an interest rate cut in September. As a result, the markets expect two rate adjustments in 2024 of 25 basis points each.On the other hand, recent statistics from the UK showed GDP growth of 0.4% in May after stagnating in April, exceeding expectations of 0.2%. The annual increase in industrial production was 0.4%, despite the previous fall of 0.7%, with a projected increase of 0.6%. The monthly figure was also in line with forecasts, accelerating by 0.2% after a 0.9% decline. Economic growth in the UK supports the risks of accelerating inflation and reduces the likelihood of an early reduction in the cost of borrowing by the Bank of England, especially given hints from members of its board about a possible continuation of current rates, including recent comments by Bank representative Catherine Mann and chief economist Hugh Pill about continued inflationary pressures, especially in the service sector, and significant wage growth, which makes a correction monetary policy is unlikely in the near future.Resistance levels: 1.2948, 1.3000, 1.3050, 1.3100.Support levels: 1.2900, 1.2860, 1.2817, 1.2776.USD/CHF: annual inflation in the United States decreased to 3.0%The USD/CHF pair is at 0.8958, demonstrating a corrective decline against the background of the weakness of the US dollar and the stability of the Swiss franc caused by the lack of new macroeconomic data.Investors are analyzing the latest conversations between Chinese Commerce Minister Wang Wentao and the Swiss head of the Federal Department of Economic Affairs, Education and Research Guy Parmelin. During the meeting, it was decided to deepen the free trade agreement, which became a key point in the context of trade restrictions caused by the Russian-Ukrainian conflict. These restrictions have made it more difficult to export Swiss goods, and a new agreement to improve the terms of trade could significantly support the Swiss economy, given that China ranks third among its trading partners. According to the State Secretariat for Economic Affairs (SECO), last year's exports to China amounted to 40.6 billion francs, while imports amounted to 18.4 billion francs. The expansion of the trade agreement is expected to increase these volumes by at least 30%.Resistance levels: 0.9000, 0.9100.Support levels: 0.8930, 0.8840.USD/CAD: lower range heralds new lowsThe USD/CAD pair shows a slight decrease against the Canadian dollar, being at the level of 1.3620 in anticipation of new factors that could affect the exchange rate.Today, at 16:00 GMT+2, the consumer confidence index from the University of Michigan in the United States is expected to be published, projected at 68.5 points for July, which is slightly higher than the previous value of 68.2 points. Earlier at 14:30, investors will pay attention to data on production inflation for June, the expected growth of which will be from 2.2% to 2.3% per annum and from -0.2% to 0.1% monthly, while the basic producer price index excluding food and energy should rise from 2.3% to 2.5%. Yesterday's report on the consumer price index showed a slowdown from 3.3% to 3.0% per annum, which was below expectations of 3.1%, and the monthly change was 0.1% after stability in the previous month, contrary to forecasts of an increase of 0.1%. The base rate also decreased from 0.2% to 0.1% monthly and from 3.4% to 3.3% per annum. Given the declining dynamics of the labor market, the US Federal Reserve may reconsider its policy towards easing at the September meeting. In particular, recent data showed a decrease in initial applications for unemployment benefits from 239.0 thousand to 222.0 thousand, and repeated applications — from 1,856 million to 1,852 million, which is also lower than the expected 1,860 million.Resistance levels: 1.3650, 1.3675, 1.3700, 1.3733.Support levels: 1.3614, 1.3588, 1.3550, ...
Trading idea for USD/CHF on July 16, 2024During Tuesday's Asian session, the USD/CHF pair declined slightly and reached the level of 0.8950. There have been no significant changes on the pair's chart since the end of last week, as traders assess the future steps of regulators, taking into account the latest inflation data.Recent data from the United States showed that the consumer price index fell from 3.3% to 3% in annual terms in June and reached a multi-year low. Fed Chairman Jerome Powell said earlier that the regulator is ready to ease monetary policy, but additional data is needed for this. Nevertheless, the probability of a Fed rate cut in September is estimated at more than 90%. Moody's suggests that the Fed may begin easing as early as this month (the next meeting is scheduled for July 30-31).Traders' attention today will be focused on US retail sales data, which will be released at 12:30 GMT. Another weak report could be an additional signal for the Fed.The head of the Swiss National Bank, Thomas Jordan, noted last week that he expects inflation to continue to decline with the support of a strong national currency. In June, the consumer price index in Switzerland fell from 1.4% to 1.3% in annual terms, after which the National Bank confirmed its intention to adhere to a "dovish" policy. In June, the NBSH cut its key interest rate by 25 basis points to 1.25%, while the Fed keeps the rate at 5.5%.Given the possibility that the NBSH may cut the rate again before the Fed, the USD/CHF pair has the potential for growth.It is recommended to include a new USD/CHF order in the trader's trading plan:Buy Stop at 0.8970, with a target of 0.9050 and a stop loss at ...
USD/CHF shows a slight decrease, far from retreating from the 0.8970 mark. Traders are waiting for new drivers of movement. The corrective momentum of the beginning of the week is weakening, as the US dollar did not receive support from official statements and the publication of economic data.Yesterday, the head of the US Federal Reserve, Jerome Powell, spoke in the Senate, noting that the US labor market is showing signs of significant cooling. The June report, published at the end of last week, turned out to be worse than analysts' forecasts. The revision of the number of new jobs in May from 272 thousand to 218 thousand had a significant impact. The unemployment rate increased from 4.0% to 4.1% in June. Powell will speak in the House of Representatives today, but it is unlikely that his speech will be much different from yesterday's. US inflation data for June will be released tomorrow at 14:30 (GMT+2). The annual consumer price index is expected to slow from 3.3% to 3.1%, and the monthly indicator will increase from 0.0% to 0.1%.The Swiss franc is under pressure due to the stabilization of the political situation after the parliamentary elections in France. Recall that Frank reacted by increasing the probability of a victory for the right, but the left-wing coalition won in the second round, and Marine Le Pen's party took third place. Now the markets are concerned about the possible difficulties of forming a new French government.USD/CHF Technical analysis for todayOn the daily chart, the Bollinger Band indicator is trying to level out. The MACD indicator is declining, maintaining a weak sell signal. Stochastic, moving away from the "20" mark, turns up.Short positions can be opened after a confident breakdown and price consolidation below the level of 0.8964. The sellers' immediate target is 0.8900. We place the stop loss at 0.9000.A rebound from the 0.8964 level followed by an upward breakout of 0.8989 becomes a signal to enter purchases with a target of 0.9037. We will set the stop loss to ...
EUR/USD: according to the head of the Central Bank of the Netherlands, the ECB will cut rates in SeptemberDuring the Asian trading session, the euro shows a slight increase against the US dollar, hovering around the 1.0830 mark ahead of important macroeconomic announcements this week. Traders are cautious in opening new positions, waiting for key economic statistics.The political instability caused by the results of parliamentary elections in European countries also contributes to the pressure on the euro. So, in France, after the second round of elections, the New Popular Front coalition won, while Marine Le Pen's far-right National Unification party took only third place, and the coalition of incumbent President Emmanuel Macron retained second place. According to experts, the French parliament remains divided, and the formation of a new government may face problems: recently acting Prime Minister Gabriel Attal resigned, but the president refused to accept it.Meanwhile, Claes Noth, head of the Dutch Central Bank, expressed the opinion that the European Central Bank (ECB) is unlikely to cut interest rates this month, but the September meeting may be more flexible and allow for necessary adjustments. He stressed that the measures taken to control inflation are effective and the target of 2.0% will be achieved by the end of 2025. Nevertheless, the duration of the process of stabilization of inflation levels indicates a slow decline in the deposit rate from the current 3.75%, which still limits economic growth. Markets expect from one to two changes in the cost of borrowing this year and up to four changes over the next eighteen months, assuming that the deposit rate will remain above 3.00% in the second half of 2025.Resistance levels: 1.0844, 1.0863, 1.0900, 1.0930.Support levels: 1.0820, 1.0800, 1.0765, 1.0730.GBP/USD: the UK, with the new prime minister, is looking for ways to strengthen trade with the EUThe pound sterling is showing stagnation, having stabilized around the 1.2800 mark. The day before, it reached new highs since June 12, but by the end of the day, most of the acquired advantages were lost. The support for the currency was influenced by the outcome of the parliamentary elections, in which the Labor Party, which advocates reducing public spending, won for the first time in 14 years. However, this factor is beginning to lose its relevance.On Thursday, investors in the UK will focus on GDP data for May, which is expected to show economic growth from 0.0% to 0.2%. It is also expected that industrial production will increase by 0.6% year-on-year after the previous decrease of -0.4%, and monthly growth by 0.2% after a significant drop of 0.9%.Meanwhile, new Prime Minister Keir Starmer, while on a visit to Scotland, announced the intentions of the Labour Party to strengthen ties with the European Union to review trade agreements concluded by former Prime Minister Boris Johnson in 2020. However, according to experts from the UK in a Changing Europe think tank, these actions may have a limited impact on reducing government spending, which increased after Brexit. In addition, they note that 78% of Labour voters would support Britain's return to the EU.Resistance levels: 1.2817, 1.2860, 1.2900, 1.2963.Support levels: 1.2776, 1.2730, 1.2700, 1.2650.USD/CHF: SECO forecasts strengthening of consumer sentiment in SwitzerlandDuring the Asian trading session, the USD/CHF exchange rate settled at 0.8983, influenced by the weakening of the US dollar and a less pronounced strengthening of the Swiss franc, which may receive support from upcoming data from the Swiss State Secretariat for Economic Affairs (SECO) this month.According to forecasts, in June, the consumer sentiment index will reach the level of -37.0 points, which is 3.0 points higher than a year ago. Sub-index indicators are also expected to improve, including expected economic development, financial situation and planning for significant purchases. Analyzing the trends of the consumer sentiment indicator, it can be noted that after a decline starting in July 2023, by autumn the indicator reached a minimum level of -53.0 points. However, SECO's current forecasts are much more positive and may contribute to the strengthening of the Swiss franc.Support levels: 0.8950, 0.8830.Resistance levels: 0.9020, 0.9160.AUD/USD: at Westpac Banking Corp. they do not rule out a rate cut in Australia in NovemberDuring the Asian trading session, the AUD/USD exchange rate is gaining momentum, stabilizing at 0.6742. The rise in quotations is supported by the latest inflation data, which may affect the postponement of monetary policy changes by the Reserve Bank of Australia (RBA), especially considering that such an option was considered at their last meeting in June.At the same time, experts from Westpac Banking Corp. It is assumed that a rate cut in November remains likely, as the central bank seeks to stimulate an increase in employment. Analysts expect rates to fall to 4.10% in November, to 3.85% by March and to 3.10% by next September. Nevertheless, if the fall in the consumer price index continues, and the labor market remains stable, this may push the RBA to take more drastic measures. On the other hand, today's data from the National Australia Bank (NAB) showed an increase in the business confidence index from -2.0 to 4.0 points, based on a survey of 350 companies. At the same time, Westpac's consumer sentiment indicator fell from 1.7% to -1.1%, highlighting the negative impact of high interest rates on the economy.Support levels: 0.6700, 0.6580.Resistance levels: 0.6760, ...