EUR/USD: ECB to maintain soft exchange rate – Deutsche BankThe quotes of the EUR/USD pair during the Asian session show a corrective trend, holding near the 1.0349 mark. The euro has resumed its decline after an unsuccessful attempt at growth, while volatility is increasing amid investor interest following the release of key macroeconomic data.Inflation figures for December were in the spotlight. The consumer price index rose from -0.3% to 0.4% on a monthly basis, and from 2.2% to 2.4% on an annual basis. The base indicator also increased from -0.6% to 0.5%, consolidating at 2.7%. In France and Italy, the dynamics remained unchanged, stopping at 1.3%. Although inflation is showing an increase, its indicators are in line with the expectations of the European Central Bank (ECB). Deutsche Bank analysts believe that the regulator will continue to adhere to the current strategy, basing its actions on general economic trends, rather than on individual indicators. According to forecasts, the harmonized index of inflation may fall below the target level of 2.0% as early as February, which will allow the ECB to begin reducing rates to a sub-neutral level during the year.The strengthening of the US dollar continues to exert pressure on the EUR/USD pair. The US currency was supported by positive data from the labor market: the number of job openings in November increased to 8,098 million, according to JOLTS, which exceeded analysts' expectations of 7,730 million. In addition, the ISM index of business activity in the service sector rose from 52.1 to 54.1 points in December, reflecting improved business conditions. Against this background, the US dollar is steadily strengthening its position, reaching the level of 108.4 points in the USDX index.Support levels: 1.0300, 1.0150.Resistance levels: 1.0390, 1.0580.USD/CHF: exchange rate growth supported by inflation data for DecemberThe USD/CHF pair is holding near the 0.9097 mark and demonstrates readiness to continue growth, focusing on the resistance level of 0.9158. The exchange rate is supported by published data on inflation in Switzerland.In December, the consumer price index remained at -0.1% on a monthly basis, in line with experts' expectations and the previous indicator, continuing its decline for the fourth month in a row. In annual terms, inflation slowed from 0.7% to 0.6%, which opens up opportunities for the Swiss National Bank to maintain a dovish monetary policy at the next meeting scheduled for March 20. In December, the regulator lowered the interest rate to 0.5%, which was the lowest level since November 2022.The updated forecasts of the department suggest that the average inflation in 2025 will be 0.3%, and in 2026 — 0.8%. Among the world's leading economies, inflation rates are lower only in China, where the rate is 0.2% per annum. To stimulate price growth, Switzerland may need to take additional measures, such as raising borrowing costs or increasing the volume of liquidity in the economy. Both scenarios may put pressure on the franc exchange rate, contributing to the strengthening of the US dollar.Resistance levels: 0.9158, 0.9244.Support levels: 0.9022, 0.8917.USD/CAD: foreign trade has become a CAD growth driverThe USD/CAD exchange rate stabilized around the 1.4349 mark, against the background of the strengthening of the US dollar, which was facilitated by positive macroeconomic statistics from Canada.According to Statistics Canada, exports increased by 2.2% in November, exceeding the previous month's growth of 1.7%, while imports increased by 1.8% after 0.3% earlier. This dynamic has made it possible to reduce the trade deficit from $544 million to $323 million. However, exports of services decreased by 0.2% to $18.2 billion, while imports decreased by 0.1% to $18.5 billion. In addition, the Ivey composite Business Activity Index (PMI) rose to 54.7 points from 52.3 points, indicating a recovery in the business environment in the country.At the same time, the attention of market participants is focused on the developing political crisis. On Monday, Canadian Prime Minister Justin Trudeau announced his intention to leave office after choosing a new leader of the Liberal Party. Donald Trump, the US president-elect, in turn, spoke about the need to stop supporting Canada through American trade subsidies and hinted that the country's inclusion in the United States could stabilize its economy and increase its security. Earlier, Trump had already announced the possibility of imposing 25% duties on Canadian imports, which, according to him, could radically change the situation in the economy of the northern neighbor.Support levels: 1.4300, 1.4150.Resistance levels: 1.4400, 1.4550.Silver market analysisSilver quotes (XAG/USD) stabilized around $30.0 per ounce after a temporary decline below this level. The instrument was supported by the weakening of the US currency, which reached an annual low of 107.5 points in the USDX index.With the beginning of a softer monetary policy by the US Federal Reserve, silver is showing sensitivity to rate forecasts. However, this year, most analysts expect them to remain in the range of 4.25–4.50%. According to the FedWatch Tool of the Chicago Mercantile Exchange (CME), the probability of such a scenario is 95.2%. The recovery of the American economy is also supported by fresh data: the index of business activity in the service sector increased from 56.1 to 56.8 points, the composite indicator rose from 54.9 to 55.4 points, although 56.6 points were expected. The number of vacancies in the non-agricultural sector, according to JOLTS, also increased to 8.098 million from 7,839 million previously.Trading activity in the silver market is showing growth. On Monday, the volume of transactions reached 80.0 thousand contracts, which exceeds the figures of January 2 and 3 at 59.0 and 43.0 thousand, respectively. In addition, option positions are also increasing: the day before, their volume amounted to 11,970 thousand against 5,700 thousand last week. These indicators indicate the optimism of market participants who expect silver prices to strengthen and form long positions for the long term.Support levels: 29.60, 27.90.Resistance levels: 30.60, ...
USD/CHF analysis on January 20, 2025On Monday, USD/CHF is working out a correction, signaling a possible continuation of growth. The asset is trading around 0.9127, against the background of low volatility of currency pairs due to the weekend in the United States.In December, the Swiss producer price index remained at 106.3 points, 0.9% lower than in December 2023, with an annual average of -1.7%. The increase in the cost of cocoa, chocolate products and coffee was offset by lower prices for pharmaceutical products, metals, semi-finished products and building materials. The slowdown in inflation in the manufacturing sector creates favorable conditions for the economy and supports the intentions of the Swiss National Bank to continue easing monetary policy.Despite the stability of the Swiss franc, recent fluctuations in the US dollar exchange rate have had little effect on the dynamics of USD/CHF. Currently, the US dollar index is at 108.90, approaching the annual high of 109.90. Investors' attention is focused on the inauguration of Donald Trump, who promises immediate changes in domestic policy. In addition, data on the US real estate market for December show a sharp increase in the volume of new home construction to 1,499 million, and the number of building permits issued amounted to 1,483 million, which reduces the likelihood of an early change in the monetary policy of the Federal Reserve System.USD/CHF technical analysis for todayOn the daily chart, the pair is approaching the resistance line of the ascending channel with dynamic boundaries of 0.9300–0.9020. Technical indicators indicate a possible strengthening of the buy signal. The lines of the Alligator indicator are diverging, and the histogram of the Awesome Oscillator (AO) indicator is forming correction bars in the positive zone.Trading Recommendations- long positions when the level of 0.9170 breaks up with a target of 0.9310. The stop loss should be set at 0.9120.- selling is advisable when the level of 0.9080 breaks down with a target of 0.8910. It is recommended to place the stop loss at the level of ...
EUR/USD: Euro drops to November 2022 levelsThe euro continues to show a decline in the EUR/USD pair during the Asian session on January 13, again trying to break through the 1.0200 mark and updating the November 2022 lows. The pair is rapidly approaching parity, and at the moment there are no obvious factors that can stop this movement.The US dollar is supported by expectations of the first steps of the newly elected President Donald Trump after the inauguration on January 20. Among the announced plans of the Republican administration is to increase import duties on goods from Canada and Mexico, which could accelerate inflation and force the Fed to tighten monetary policy. In addition, Trump's statements about the strategic importance of Greenland and the possibility of its return to US control are attracting the attention of the markets. His adviser Mike Waltz has already admitted that various ways of implementing this plan may be considered, including military measures.European investors are also analyzing December inflation data. On a monthly basis, the consumer price index rose from -0.3% to 0.4%, and on an annual basis — from 2.2% to 2.4%. Core inflation increased from -0.6% to 0.5%, reaching 2.7%. However, analysts believe that these figures are unlikely to affect the current policy of the ECB. Deutsche Bank experts note that despite the annual inflation rate in the service sector of about 4.0%, its growth rate and wages are slowing down. This allows us to expect to reach the target level of 2.0% by February. If the forecasts are confirmed, the ECB may consider lowering interest rates below the neutral level in 2025.Resistance levels: 1.0253, 1.0300, 1.0350, 1.0400.Support levels: 1.0200, 1.0150, 1.0100, 1.0050.GBP/USD: strong downward momentum of the pound is gaining momentumThe pound continues to develop the downward trend established last week, when the GBP/USD pair began to adjust from the local highs reached on January 7. The quotes are now approaching the 1.2140 level, testing it for a downward breakout. The US dollar is receiving additional support due to strong statistics on the US labor market.On Wednesday at 09:00 (GMT+2), the attention of British investors will be focused on inflation data. Analysts expect the annual core consumer price index to remain at 3.5%, while the overall figure could be 2.6% year-on-year and 0.1% month-on-month. Also at this time, a report on retail prices will be published, which predicts a slight increase from 3.6% to 3.7%. On Thursday, the market will focus on the November UK GDP and industrial production data. Economists assume that both indicators will show positive dynamics.: GDP may grow by 0.2% after a decrease of 0.1%, and industrial production — up to 0.1% after a fall of 0.6%.Market participants are also assessing recent statements by the Deputy governor of the Bank of England, Sarah Breeden. She noted that current economic statistics indicate the possibility of a gradual easing of monetary policy, but the exact timing and pace of rate cuts remain uncertain. According to her, against the background of tax indexation carried out by the Labor government, the weakening of the national economy may continue, which requires a balanced approach from the regulator.Resistance levels: 1.2150, 1.2200, 1.2230, 1.2261.Support levels: 1.2100, 1.2036, 1.2000, 1.1950.USD/CHF: NBS expects revenue of 80.0 billion francs for 2024he US dollar is showing mixed dynamics in the USD/CHF pair, holding near the level of 0.91 70. At the start of the new trading week, buyer activity remains subdued, and there are no prerequisites for a noticeable corrective movement yet. The dollar is supported by expectations related to the start of the new term of Donald Trump, whose inauguration will take place on January 20, as well as data on the state of the US labor market, which may affect the monetary policy of the regulator.The Swiss National Bank forecasts a record profit of 80 billion francs by the end of 2024, which will be the highest figure since the establishment of the institution. The main factors of this result are the growth of the dollar, the appreciation of precious metals and successful investments in shares of the largest technology companies. The strengthening of the US currency, which accounts for 39% of the bank's reserves, contributes to an increase in the value of assets when converted into francs. In addition, the increase in gold prices, which rose by 27% last year, increased the value of 1.04 million metric tons of this metal on the bank's balance sheet. The official report will be published on March 3, but analysts are confident that the bank's shareholders can expect to receive their first dividend payments in the last three years.Resistance levels: 0.9188, 0.9225, 0.9250, 0.9300.Support levels: 0.9150, 0.9130, 0.9100, 0.9037.USD/JPY: quotes are moving away from recent peaksThe USD/JPY pair is showing a decline, retreating from Friday's peak at 157.35. This trend is associated with the release of new data on Japanese macroeconomics.According to November statistics, the household spending index increased by 0.4% on a monthly basis, while analysts had forecast a decrease of 0.9%. On an annualized basis, the indicator decreased by 0.4%, which turned out to be a less significant decline compared to the expected decrease of 0.6%. Experts emphasize that the current wage growth rates offered by employers in Japan are insufficient to cover inflationary costs. This, along with the weakening of the yen, increases the financial burden on households and reduces the likelihood of continued tightening. Representatives of the Bank of Japan have previously stressed that the future of monetary strategy will depend on current economic statistics. In case of accelerated price growth, the interest rate may change. Currently, annual inflation is 2.9%, which exceeds the target level of 2.0%. If the growth rate continues, the regulator will have to take decisive action, which may support the Japanese currency.Resistance levels: 161.93 164.07.Support levels: 156.25, ...
GBP/USD: british 10-year bonds have shown peak yields since 2008The GBP/USD pair continues to remain in the correction phase, trading around the 1.2294 mark. This dynamic is due to the stable exchange rate of the US dollar and the sell-off in the market of British debt instruments. Investors are concerned about the growth of government debt and the consequences of the first decisions of the new US President Donald Trump, who took office on January 20.The yield on 30-year UK bonds reached a record high of 5.455% in the last 26 years, while 10-year bonds rose to 4.921%. Despite these figures, the Ministry of Finance of the country does not see the need to take emergency measures. In 2025, it is planned to issue government bonds worth about 300 billion pounds, which, according to the authorities, can normalize the situation on the capital market. Rising yields can stimulate investor activity, and one of the possible steps to stabilize will be a short-term increase in the key rate, which will also support the fight against inflation.Meanwhile, the US currency is strengthening, the USDX index rose to the level of 109.0 points. Today at 15:30 (GMT+2), market participants expect the publication of data on employment in the US non-agricultural sector. 154 thousand jobs are projected to be created, compared to 227 thousand in November. The average hourly wage is likely to slow down from 0.4% to 0.3%, while the unemployment rate will remain at 4.2%. If the forecasts are confirmed, this could be a weighty argument for the Fed in favor of slowing down monetary policy tightening. According to the CME FedWatch Tool, 93.1% of investors are confident in maintaining the rate in the range of 4.25%-4.50%. In addition, the published minutes of the Fed meeting indicate increased uncertainty about the economic course before the second term of Donald Trump. The regulator also noted the risks of accelerating inflation if the president's foreign trade and migration policies are fully implemented.Support levels: 1.2230, 1.2000.Resistance levels: 1.2380, 1.2610.USD/CHF: correction of the franc against the background of strengthening the position of the US currencyThe USD/CHF pair maintains a corrective trend near the level of 0.9125, demonstrating readiness for further growth. During the Asian session, the Swiss franc weakened slightly in the pair, which is explained by a decrease in market volatility and the strengthening of the US currency.The market is focused on the latest macroeconomic data from Switzerland. On a monthly basis, the consumer price index decreased by 0.1%, reaching 106.9 points, while in annual terms, the indicator slowed from 0.7% to 0.6%. The average annual inflation rate for 2024 was 1.1%, which corresponds to the central part of the target range of 0.0–2.0% set by the Swiss National Bank. These indicators may support the regulator's decision to continue its soft monetary policy in 2025. The bank plans to reduce the borrowing rate to 0.25%, and the head of the regulator Martin Schlegel admits the possibility of introducing negative rates. However, such measures are not yet on the priority agenda.Support levels: 0.9090, 0.8960.Resistance levels: 0.9150, 0.9270.USD/CAD: the expectation of data on the US and Canadian labor markets sets the tone for tradingThe US dollar is showing moderate strengthening in the USD/CAD pair in morning trading, reaching the level of 1.4410. The upward momentum continues, but the pair remains under pressure from bearish sentiment after a sharp decline on Monday, January 6. Market participants are still showing restraint, awaiting the publication of employment data in the United States and Canada, which is scheduled for 15:30 (GMT+2).Economists predict a decrease in job growth in Canada from 50.5 thousand to 25.0 thousand. The average hourly wage is likely to remain at 3.9%, and the unemployment rate may rise to 6.9% from 6.8%. Additionally, investors will pay attention to statistics on construction permits: an increase of 1.8% is expected in November after a decrease of 3.1% a month earlier.On Monday, Canadian Prime Minister Justin Trudeau announced that he would step down after the election of a new leader of the Liberal Party. Against this background, analysts are discussing the possible impact of political instability on the rate of the Bank of Canada. According to Bank of America experts, if, as CBC News polls show, the Conservative Party led by Pierre Pouillevre strengthens its position and wins a majority in the House of Commons, this will lead to a change in the political vector and increased fiscal discipline.Resistance levels: 1.4435, 1.4466, 1.4500, 1.4550.Support levels: 1.4400, 1.4350, 1.4300, 1.4250.NZD/USD: holding positions at the minimum levels of October 2022The New Zealand dollar is showing a multidirectional movement, remaining near the 0.5590 mark and the October 2022 levels, which were updated the day before. The pair is preparing to end the week with a slight correction related to the strengthening of the US dollar amid expectations for the publication of data on employment in the non-agricultural sector, scheduled for today at 15:30 (GMT+2).In the absence of significant statistics from New Zealand, investors' attention is focused on China's inflation figures. In December, the consumer price index fell to 0.1% year-on-year, and showed zero monthly dynamics after falling 0.6% earlier. These data were in line with analysts' forecasts, but indicate a decline in business activity in the country. This situation forces the People's Bank of China to consider additional stimulus measures to support the economy. In addition, the situation is complicated by rumors about possible new import duties that the US republican administration may impose. This creates additional obstacles to the recovery of Chinese economic indicators.Resistance levels: 0.5607, 0.5641, 0.5672, 0.5700.Support levels: 0.5571, 0.5540, 0.5511, ...