Fundamental updates by Solid ECN

[Solid ECN]

EURUSD​

The European currency is relatively stable against the US dollar during trading in the Asian session and is consolidating near local highs from May 5. The day before, the instrument showed active growth, which allowed leveling the results of Wednesday's "bearish" trend and brought the euro to a high at around 1.0600. EUR/USD was supported yesterday by expectations of the imminent end of quarantine due to the coronavirus in Shanghai, which will allow many enterprises to resume normal operation and have a positive effect on the dynamics of foreign trade. In turn, yesterday's macroeconomic data from the US put moderate pressure on the positions of the US currency. Initial Jobless Claims for the week ended May 13 increased from 197 thousand to 218 thousand, which was higher than market expectations by 18 thousand. Philadelphia Fed Manufacturing Index declined sharply in May from 17.6 to 2.6 points, while analysts expected the decline to only 16 points. The Minutes of the European Central Bank (ECB)'s meeting released the day before also contributed to the moderate growth of the single currency. In the report, the regulator pointed to the increasing risks associated with a sharp growth in inflation in the region, but at the same time maintained optimistic forecasts for both Q3 and Q4 of 2022. Also, many members of the ECB board are gradually speaking out in favor of tightening monetary policy. Analysts consider the rate hike at the end of summer or early autumn as most likely.
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GBPUSD​

The British pound is traded with mixed dynamics against the US currency during the morning session, consolidating near 1.2450. On Thursday, the pound showed active growth, which allowed it to fully recover from the decline last Wednesday. Moreover, GBP/USD briefly rose above 1.2500, having updated local highs from May 5. The growth of the instrument was facilitated by the weakening of the US currency, which came under pressure against the backdrop of weak macroeconomic statistics from the US. In addition, by the end of the week, corrective moods are intensifying. In turn, the fundamental picture on the market is changing slightly, and investors are still disappointed by the statistics released this week from the UK on the dynamics of consumer inflation. In April, the Consumer Price Index in annual terms accelerated from 7% to 9%, which fell short of the average market forecasts by only 0.1%. On a monthly basis, inflation in the UK also accelerated from 1.1% to 2.5%. Today traders are focused on British statistics on the dynamics of Retail Sales. At the moment, investors are taking a lead from the statistics on GfK Consumer Confidence. In May the index fell from -38 to -40 points against the forecast of -39 points.
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AUDUSD​

The Australian dollar is moderately declining against the US dollar during the Asian session, again testing 0.7000 for a breakdown. After active growth the day before, which allowed the instrument to renew local highs from May 9, corrective moods are again strong, and traders are in no hurry to open new purchases without the appearance of additional drivers. Also, the Australian dollar remains under moderate pressure after the publication of an ambiguous report on the labor market. The Employment Rate in Australia in April increased by only 4 thousand after an increase of 20.3 thousand in the previous month. Analysts were counting on an acceleration of positive dynamics to 30 thousand. The Full-Time Employment accelerated from 19.9 thousand to 92.4 thousand; however, a sharp reduction in Part-Time Employment by 88.4 thousand did not allow the final level to record a record growth. The Unemployment Rate remained at 3.9%, while the Participation Rate decreased slightly from 66.4% to 66.3%. The Australian dollar, in turn, is supported by upbeat news from China, where from June 1, the exhausting multi-week quarantine in Shanghai is expected to end, which significantly undermined the pace of Chinese economic recovery.
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USDJPY​

The US dollar shows mixed dynamics against the Japanese yen in Asian trading, consolidating near 127.70 and settling near the local lows of April 27. Demand for the yen is gradually increasing as interest in risk decreases; however, the dollar in this sense is also able to provide significant competition. Moreover, many investors prefer the American currency, since the difference between the interest rates of the US Federal Reserve and the Bank of Japan is high and will only increase in the future. In turn, inflationary risks in the two countries remain disproportionate. While the US regulator is extremely concerned about containing the growing price pressure, the Japanese one can afford to keep a wait-and-see attitude, managing only the quantitative easing program. Today's statistics on inflation in Japan reflected the increase in the National Consumer Price Index in April from 1.2% to 2.5%, which was significantly higher than market expectations at 1.5%. National CPI excluding Food and Energy in the country accelerated by 0.8%, while a month ago, analysts recorded its decline by 0.7%.
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XAUUSD​

Gold prices are consolidating after active growth the day before, which brought the instrument to new local highs from May 12. XAU/USD is testing 1840.00 for a breakout; however, the market activity remains quite low. The macroeconomic calendar on Friday is relatively empty, and therefore, significant changes in the dynamics of the instrument should not be expected. Experts attribute yesterday's growth in gold to the weakening of the dollar against the backdrop of the publication of disappointing macroeconomic statistics from the US. In particular, Initial Jobless Claims for the week ended May 13 increased from 197 thousand to 218 thousand. Philadelphia Fed Manufacturing Index fell from 17.6 to 2.6 points in May, with a slight correction forecast to 16 points. Existing Home Sales fell 2.4% in April, while investors expected a 0.7% decline.​

 

[Solid ECN]

EURUSD
The European currency starts the new week with moderate growth against the US dollar, again testing 1.0600 for a breakout and settling near the local highs updated last Thursday. Moderate support for the single currency at the beginning of the week is provided by the weakness of the US dollar, which came under pressure amid a noticeable correction in the yield of US Treasury bonds. Last Thursday, analysts recorded a decline in the yield of 10-year bonds to a three-week low of 2.77%, while earlier during the month the bonds showed a yield of 3.2%. In turn, pressure on the euro is exerted by the soft monetary policy of the European Central Bank (ECB), or rather the growing gap between the rates of the European regulator and the American one. Representatives of the ECB are beginning to speak out in favor of the idea of launching a rate hike program, but the official position of the Bank is still quite cautious. However, it is unlikely that the ECB will be able to remain on the sidelines for a long time, and the point here is not in the competition of rates or exchange rates. Inflation in the eurozone is growing at a record pace, and here the European regulator is at risk of following the path of the US Federal Reserve, which for a long time considered record price growth to be only a temporary phenomenon.

GBPUSD
The pound shows the uptrend in trading in tandem with the US currency during the morning session, testing the level of 1.255 for a breakout and updating local highs from May 5. The strengthening of the British currency at the beginning of the week is facilitated by the growth of corrective sentiment for the US dollar against the backdrop of a noticeable decrease in the yield of US Treasury bonds. Also, traders are still taking a lead from relatively optimistic macroeconomic statistics from the UK on Friday, which turned out to be significantly better than negative forecasts. In April, Retail Sales added 1.4% after falling by 1.2% a month earlier, although analysts had expected a decline of 0.2%. In annual terms, the indicator showed a sharp drop of 4.9% after increasing by 1.3% in March, while preliminary market estimates suggested a more active decline of 7.2%. Retail Sales excluding Fuel increased by 1.4% MoM, but decreased by 6.1% YoY, while the forecast was for a contraction of 0.2% MoM and 8.4% YoY. Today, statistics on housing prices in the UK were released. Rightmove House Price Index increased by 2.1% in monthly terms and by 10.2% in annual terms, which turned out to be slightly higher than the previous values at the levels of 1.6% MoM and 9.9% YoY.

NZDUSD
The New Zealand dollar is showing solid growth against the US dollar during the Asian session, building on the strong "bullish" momentum that was formed last week. NZDUSD is testing 0.6450 for a breakout, updating local highs from May 5. The instrument shows an uptrend against the backdrop of a correction in the US currency, which, in turn, reacts sharply to a decrease in the yield of US Treasury bonds. Also, the positions of the New Zealand dollar are strengthening on the news from Shanghai, where the authorities plan to lift the previously imposed quarantine restrictions from June 1. At the same time, the macroeconomic background from New Zealand remains rather neutral. Data released on Friday showed a slowdown in Credit Card Spending in April from 3.4% to 1.1%, which was worse than analysts' average forecasts of growth of 1.6%. Exports from New Zealand in April slightly decreased from 6.48 billion to 6.31 billion dollars, but against the backdrop of a sharper drop in imports from 7.06 billion to 5.73 billion dollars over the same period, the country's Trade Balance increased in April by 584 million after a decline of 581 million dollars a month earlier. Traders are waiting for the results of the meeting of the Reserve Bank of New Zealand (RBNZ), which will be announced on May 25, counting on another increase in interest rates by 50 basis points.

USDJPY
The US dollar is traded against the Japanese yen with a downtrend during the Asian session, once again testing the level of 127.50 for a breakdown. USD/JPY is located near the local lows of April 27, maintaining momentum for further development of the downtrend in the short term. The development of "bearish" trend is facilitated by corrective sentiment in the US currency, associated with a drop in the yield of US Treasury bonds. Investors also fear a further deterioration in inflation in the country, despite the fact that the latest data on consumer prices in the US reflected the possible passage of the peak of growth. One way or another, the policy of the US Federal Reserve has not changed much so far, and at its next meeting the regulator plans to raise the interest rate by another 50 basis points. In turn, the Bank of Japan maintains a wait-and-see attitude, preferring to limit itself to managing the quantitative easing program. Friday's statistics on inflation for April in Japan reflected the growth of the National Consumer Price Index by 2.5% after increasing by 1.2% a month earlier. Market forecasts assumed an increase of only 1.5%.

XAUUSD
Gold prices continue to show moderate growth at the beginning of the new week, updating local highs from May 12. The instrument is testing 1850 for a breakout, showing no clear signs of a weakening trend. The main factor in the growth of gold at the moment remains the weak dollar, which came under pressure after the publication of not the most optimistic macroeconomic statistics last week. In addition, investors are reacting negatively to the sharp decline in US Treasury yields. This week, market participants are waiting for the publication of the minutes of the last meeting of the US Federal Reserve, hoping to receive clear evidence of the continuation of the "hawkish" monetary policy. Also on Thursday, updated data on the dynamics of US GDP for Q1 2022 will be published. The previous estimate reflected the fall of the US economy by 1.4% in annual terms.​

 

[SOLIDECN]

US stock indices rose on Tuesday, buoyed by improving risk appetite following China's decisions.

China decided to reduce the duration of health isolation imposed on travelers as part of its anti-Covid operations.

Now investors are following the Federal Reserve's statements closely, with some officials hinting at even higher US rate hikes than expected to control inflation.

Dow Jones rose 0.6% as of 14:07 GMT to 31,614, as S&P 500 rose 0.3% to 3914, while NASDAQ slipped 0.1% to 11,509.​

 

[SOLIDECN]

AUDUSD: consolidation after reaching local highs in August​

The AUDUSD pair shows ambiguous trading dynamics during the Asian session, consolidating near 0.6830. Investors are trying to predict the situation in the market after many currencies showed a confident upward rally against the US dollar at the end of last week. So, for only one trading session on Friday, September 9, the Australian dollar recovered to the local highs of August 31.

At the same time, traders were disappointed by the publication of poor macroeconomic statistics from China, where, in particular, a decrease in inflation in August by 0.1% from 0.5% last month was recorded, while the growth rate adjusted from 2.7% to 2.5% YoY with preliminary estimates of experts at 2.8%, which is a signal of a slowdown in the national economy.

Following the publication by the analytical company Impact Economics and Policy of information about the inflated costs of post-COVID rehabilitation of citizens in the amount of 3.6B US dollars, the Australian authorities launched a parliamentary inquiry to determine the exact number of people who need medical care after an infection. In particular, according to the information provided, taking into account weekly expenses, which amount to about 100.0M Australian dollars, the losses of the national budget for the year amount to 5.2B Australian dollars. As a result, the authorities will submit a report that will collect expropriated treatments and determine whether those who have been ill will be able to receive payments from the state.

On Thursday, Australian investors are focused on the report on the national labor market for August, and analysts predict an increase in employment by 50.0K after falling by 40.9K last month.

On the daily chart, Bollinger bands reverse in the horizontal plane: the price range is narrowing from above, reflecting the ambiguous nature of trading in the short term. MACD is growing, maintaining a relatively strong buy signal and above the signal line. Stochastic shows a confident upward direction, but at the moment, it is rapidly approaching its highs, indicating that the instrument may become overbought in the ultra-short term.

Resistance levels: 0.6853, 0.69, 0.695, 0.7 | Support levels: 0.680, 0.675, 0.67, 0.665​

 

[SOLIDECN]

Gold - Candlestick Analysis​

H4​

On the four-hour chart, there is the formation of an Inverted Hammer reversal pattern at the level of 1696.34; however, the attempt of the "bulls" to seize the initiative in the XAU/USD pair was unsuccessful. This can be seen in the formation of a Bearish Engulfing pattern, which showed that the market is still under the influence of sellers. The appearance of opposite figures states uncertainty, and in the current situation the price may reverse at the support level of 1682.63 and head higher to the resistance level of 1732.43, overcoming of which will open the way for the "bulls" to the zone of 1808.60–1879.88. An alternative scenario is likely if the price breaks down the support level of 1682.63, then the instrument may drop to the area of 1628.66–1551.08.

D1​

On the daily chart, at the level of 1696.34, there is the formation of Inverted Hammer and Hammer candlestick analysis patterns, which warn of a likely price reversal upwards, and at the moment, at the level of 1717.8, another Inverted Hammer model is being built. After a long decline in the asset, the price has probably reached the bottom and is preparing for a reversal. In the current situation, it seems possible to restore quotes to the level of 1732.43, overcoming which will allow the price to strengthen to the area of 1808.6 – 1879.88.

Support levels: 1682.63, 1628.66, 1551.08 | Resistance levels: 1732.43, 1808.6, 1879.88​

 

[SOLIDECN]

EURUSD -The euro returns to declining​

The European currency is falling, retreating after an active corrective growth the day before, when quotes retreated from record lows. The reason for the strengthening of the downtrend was mainly technical factors, as well as the prospect of foreign exchange interventions by regulators.

In turn, the news background remained quite pessimistic, which did not allow the "bulls" to develop an uptrend. In particular, Gfk Group's Consumer Confidence Index, published yesterday in Germany, corrected from -36.8 points to -42.5 points in October. In addition, the index of Economic Expectations in Switzerland in September from the Center for European Economic Research (ZEW) fell from -56.3 points to -69.2 points.

The focus of investors today will be a block of data on the level of Consumer Confidence and Economic Sentiment in the euro area for September. Also, during the day statistics on the dynamics of inflation in Germany is expected to be released: the figure may accelerate sharply from 7.9% to 9.4% in September.

According to Bloomberg, the EU states intend to postpone the final decision on the issue of setting a price limit for Russian "black gold". Earlier it was predicted that the amendments could be part of another package of sanctions against the Russian economy, which is likely to target specific sectors such as aviation, as well as affect the export of technologies for industry. In particular, it was not possible to obtain unanimous approval of all EU member states: among those who expressed disagreement, Bloomberg names Cyprus and Hungary. Against this backdrop, the region's authorities are discussing other sanctions policy options against Russia, which include control over the supply of diamonds and a ban on the export of certain products made from steel and wood.

Resistance levels: 0.97, 0.975, 0.98, 0.985 | Support levels: 0.9600, 0.9534, 0.945, 0.94​

 

[SOLIDECN]

AUDUSD - The pair is consolidating near 0.65​

Slight support for quotes at the end of the week is provided by macroeconomic statistics from Australia and China. The Chinese Manufacturing PMI from NBS in September increased from 49.4 points to 50.1 points, which was better than expected 49.6 points, but the Services PMI corrected from 52.6 points to 50.6 points, demonstrating decline more active than forecasts at the level of 52.0 points. Australian data indicated an increase in Private Sector Credit in August from 0.7% to 0.8% MoM and from 9.1% to 9.3% YoY.

In turn, the US currency is supported by macroeconomic statistics from the United States. The data released the day before confirmed the decline in the Annualized Gross Domestic Product (GDP) in the second quarter at the level of -0.6%. At the same time, Initial Jobless Claims for the week ended September 23 decreased from 209 thousand to 193.0 thousand.

Analysts at Danske Bank point to the upside potential of the Australian dollar quotes due to the limited supply of liquefied natural gas, as Australia is one of the world's key producers of raw materials. At its September meeting, the Reserve Bank of Australia (RBA) adjusted interest rates by 50 basis points, and analysts are confident that there will be a similar increase next month, despite growing recession risks for the national economy. Given these factors, the Australian currency will continue to receive only minor support from the tightening of monetary policy by the regulator.

Resistance levels: 0.6572, 0.665, 0.67, 0.675 | Support levels: 0.645, 0.64, 0.632, 0.625​

 

[SOLIDECN]

USDJPY - US dollar holds near its record highs​

The American currency continues its moderate growth during the Asian session, again testing the psychological level of 145 for a breakout. The US dollar is in high demand among investors in anticipation of further tightening of monetary policy by the US Federal Reserve. It is predicted that by the end of the year the regulator will make at least one more large increase in the indicator, and the adjustment can immediately reach 1.25%. In turn, the Bank of Japan does not change its wait-and-see tactics, as it fears the return of the previous deflationary risks.

The published macroeconomic statistics from Japan put additional pressure on the yen. Tankan Large Manufacturing Index in the third quarter showed a decrease from 9.0 points to 8.0 points, while analysts expected growth to 11.0 points, and the Jibun Bank Manufacturing PMI in September fell from 51points to 50.8 points with a forecast of 51.5 points.

US investors will be watching today for data from the Institute of Supply Management (ISM), which reflects the state of business activity in the national manufacturing industry and is calculated based on a survey of purchasing and supply managers of leading national enterprises in all industries. The indicator is projected to decrease from 52.8 points to 52.2 points. In addition, during the day there will be a number of speeches by representatives of the US Federal Reserve.

Resistance levels: 145, 146, 147, 148 | Support levels: 144, 142.54, 141.5, 140.78​

 

[SOLIDECN]

Gold under the pressure of the "hawkish" policy of the world's leading central banks

Quotes of the XAUUSD pair are holding near the level of 1660, receiving moderate support from the corrective weakening of the US dollar at the end of last week, but the "bulls" still remained under pressure. In addition, gold is still reacting negatively to the rising yields of US government bonds.

It is likely that this week the precious metal will return to the downward plane, as the world's leading financial regulators continue their policy of tightening monetary conditions. On Tuesday, October 4, a meeting of the Reserve Bank of Australia will be held, which may adjust the interest rate from 2.35% to 2.85%, and the next day, officials of the Reserve Bank of New Zealand will probably increase the rate from 3.0% to 3.5%. At the end of the week, investors will be watching the rhetoric of the representatives of the European Central Bank (ECB) and the Bank of England, hoping to hear plans for further tightening of monetary policy against the background of increased inflation to 10.0% in the EU.

It is worth noting the high interest in gold from British investors after the plan announced by the national Ministry of Finance to reduce the fiscal burden in the context of the energy crisis. Long positions in the asset contrast sharply with the "bearish" sentiment in the precious metals market, as XAU/USD quotes have lost 11% since the beginning of the year, which was facilitated by the "hawkish" policy of the US Federal Reserve. However, the precious metals' status as a hedge against inflation and currency depreciation keeps high demand from retail investors.


Resistance levels: 1675, 1688.58, 1700, 1720 | Support levels: 1653.92, 1640, 1620, 1600​

 

[SOLIDECN]

USDCHF - The pair is consolidating near 0.992​

The US dollar shows mixed dynamics of trading during the Asian session, consolidating near local highs from September 28 and 0.9920, despite the fact that the macroeconomic background from the US remained rather weak, and data from Switzerland supported buyers of the franc.

Business activity index from the Institute of Supply Management (ISM) in September showed a decline from 52.8 points to 50.9 points. It is worth noting that a similar index from S&P Global rose from 51.8 points to 52.0 points in September with analysts' neutral forecasts. In turn, data from Switzerland pointed to a slowdown in inflation. In September, the Consumer Price Index showed a decrease of 0.2% after rising by 0.3% last month. Finally, the Business Activity Index from SVME recorded a moderate increase from 56.4 points to 57.1 points with analysts' neutral forecasts.

Resistance levels: 0.9948, 1, 1.005, 1.01 | Support levels: 0.9868, 0.9807, 0.9762, 0.97​

 

[SOLIDECN]

USDCAD - Flat trading dynamics​

The pressure on the position of the instrument is exerted by weak macroeconomic statistics, which allowed investors to revise their forecasts regarding the pace of further tightening of monetary policy by the US Federal Reserve. In particular, market participants drew attention to the rapid drop in the Manufacturing PMI from 52.8 points to 50.9 points, against a forecast of 52.2 points, according to the Institute for Supply Management (ISM). The negative background intensified today, when a zero trend in the volume of manufacturing orders in the US was recorded in August after falling by 1% in the previous month, although analysts expected a value of 0.3%. JOLTS Job Openings in August also adjusted from 11.17 million to 10.053 million.

On Wednesday, the market will focus on Automatic Data Processing's (ADP) private sector employment report, as well as the Institute for Supply Management's (ISM) September data set on US service sector business activity. Canada will publish statistics on International Merchandise Trade for August.

Bank of Canada Governor Tiff Macklem said that high inflation requires policymakers to take decisive action, so officials will continue to raise interest rates despite the fact that the regulator has faced public criticism for increasing the cost of borrowing at a time when many Canadians can hardly afford the goods of the first need. Officials have adjusted the interest rate by 300 basis points in just six months, trying to return inflation to the target level of 2.0%. It is worth noting the effectiveness of the measures taken: in September, the figure fell from 8.1% to 7.0%.

Resistance levels: 1.36, 1.365, 1.37, 1.375 | Support levels: 1.35, 1.344, 1.34, 1.335​

 

[SOLIDECN]

NZDUSD - RBNZ raises interest rate to a seven-year high​

The New Zealand dollar shows a moderate increase during the Asian session, testing 0.5800 for a breakout. The NZDUSD pair renews its local highs from September 23 amid reduced activity in the market, as traders are in no hurry to open new trading positions, waiting for the publication of an extensive block of US macroeconomic statistics on the labor market for September and hoping to receive new signals regarding the pace of further tightening of monetary policy by the US Federal Reserve.

Meanwhile, the Reserve Bank of New Zealand (RBNZ) held a meeting on Wednesday, following which, as expected, the interest rate was raised by 50 basis points to 3.5%, which was the eighth adjustment of the monetary tightening cycle that started a year ago and the highest rate in the last seven years. According to the RBNZ Governor Adrian Orr, the "hawkish" course allows maintaining price stability and contributes to the most sustainable employment. The market estimates the probability of an interest rate increase by another 50 basis points at the next meeting of the Reserve Bank of New Zealand in November to be more than 60%, and by May the value could reach 4.5%. It is worth noting that the decision of the financial authorities somewhat disappointed the traders, who were counting on the easing of pressure from the leading central banks. The day before, the Reserve Bank of Australia raised interest rates by only 0.25%, while the market expected a correction of 50 basis points. In an accompanying statement, agency officials noted that an increase of 0.25% is necessary to assess the effectiveness of measures already taken to combat inflation.

Resistance levels: 0.58, 0.585, 0.59, 0.5938 | Support levels: 0.572, 0.565, 0.5563, 0.55​

 

[SOLIDECN]

AUDUSD - The pair returns to record lows​

Investors are waiting for today's publication of macroeconomic statistics from the US on the situation on the labor market in September. Analysts' forecasts suggest that the economy will add about 250 thousand new jobs outside the agricultural sector after rising by 315 thousand in the previous month, while Unemployment will remain at the same level of 3.7%. A slight decrease in hourly wages is also possible, but otherwise the estimates are fairly neutral.

In the meantime, the data from Australia released the day before put moderate pressure on the instrument. Thus, Export volumes in August added 2.6% after a sharp decline by 9.9% last month, while Imports for the same period increased by 4.5% after an increase of 5.2% earlier, mainly due to the supply of fuels and lubricants. However, a serious downward correction of the AUD/USD quotes is hindered by rising prices for commodities, primarily coal, which is one of the most important Australian export commodities. Meanwhile, Australia's Trade Surplus narrowed slightly in August from 8.733 million to 8.324 million Australian dollars, while analysts had expected the figure to rise to 10.500 million Australian dollars.

Technical indicators do not contradict the further development of the "bearish" trend in the short and/or ultra-short term.

Resistance levels: 0.645, 0.6522, 0.6572, 0.665 | Support levels: 0.6362, 0.632, 0.625, 0.62​

 

[SOLIDECN]

EURUSD - European currency remains under pressure​

The single currency noticeably weakened in the second half of last week after the publication of Friday's report on the US labor market, which confirmed the commitment of the US Federal Reserve to the course of further tightening of monetary policy. Thus, in September, 263.0 thousand new jobs were created after 315.0 thousand recorded in the previous month. Analysts had expected growth of the indicator by only 250.0 thousand. At the same time, the Average Hourly Earnings in September maintained a monthly growth rate of 0.3% but slowed down in annual terms from 5.2% to 5.0%. At the same time, the Unemployment Rate fell from 3.7% to 3.5%, while investors did not expect any changes.

Weak macroeconomic statistics from Germany put additional pressure on the instrument. Retail Sales fell 1.3% in August after increasing 1.9% a month earlier, while analysts had expected a decline of 1.0%. In annual terms, the decline in sales accelerated from -2.6% to -4.3%, which turned out to be slightly better than experts' forecasts at the level of -5.1%.

Meanwhile, gas reserves in European storage facilities, according to the Gas Infrastructure Europe association, exceeded 90.1%, while warm weather in the region, as well as high wind generation rates, contribute to a decrease in "blue fuel" prices in Europe. The spot gas price at the Dutch gas hub TTF fell to a low of 1.612 thousand dollars. Nevertheless, experts believe that in order to combat the consequences of the energy crisis, the European authorities need to spend more than 1.5 trillion euros additionally, otherwise the decline in GDP could range from 6.5 to 11.5%.

Resistance levels: 0.975, 0.98, 0.985, 0.99 | Support levels: 0.97, 0.96, 0.9534, 0.95​

 

[SOLIDECN]

XAUUSD - Development of a downtrend amid rising US bonds​

The trading instrument is under pressure amid growing expectations of further tightening monetary policy by the world's leading regulators. The meeting of the US Federal Reserve will take place in early November, and at the moment, traders hope to receive new signals regarding the pace of the upcoming interest rate hike. The Bank of England has slightly softened its "hawkish" rhetoric after the revision of the British government's plans for tax cuts but still adheres to the policy of "high rates." The European Central Bank (ECB) has the softest rhetoric among the trio but is also under pressure, particularly from the German Federal Bank. On Tuesday, several speeches by representatives of leading regulators will take place, and the speech of the head of the British department, Andrew Bailey, may attract the most attention of experts.

Also, the precious metal quotes are negatively affected by the growing yield of US bonds: over the past week, bond rates rose by a noticeable 2.0%.

Resistance levels: 1675, 1688.58, 1700, 1720 | Support levels: 1653.92, 1640, 1620, 1600​

 

[SOLIDECN]

USDJPY - The US dollar updates record highs​

The USDJPY pair is developing an uptrend, renewing record highs. After some decline last week, the dollar resumed active growth against the yen, despite the risks of new currency interventions from the Bank of Japan: the instrument consolidated above 146.00, and the "bulls" are waiting for the publication of the September minutes of the US Federal Reserve meeting during the day.

Additional pressure on the positions of the yen today is exerted by uncertain macroeconomic statistics from Japan. Machinery Orders in August showed a sharp decline of 5.8% after an increase of 5.3% in the previous month, while analysts expected –2.3%, and in annual terms the indicator increased by 9.7% after 12.8%, shown a month earlier, which also turned out to be worse than forecasts at the level of 12.6%. The day before, August data recorded a surplus in the Trade Balance, which decreased by 96.1% compared to the same period last year and amounted to 58.9 billion yen due to the fact that a weak national currency causes an increase in the cost of imports into the country, while increasing prices Japanese goods sold abroad are not so significant.

During the week, the market's attention will be drawn to publications from the US. In particular, key inflation statistics for September will be released tomorrow, where current forecasts suggest a slowdown in the Consumer Price Index from 8.3% to 8.1%, while the Core CPI excluding Food and Energy may again adjust from 6.3% to 6.5%.

Resistance levels: 147, 148, 149, 150 | Support levels: 146, 145, 144, 143.51​

 

[SOLIDECN]

USDCAD - Trading near record highs​

Market activity remains subdued as investors await today's release of US consumer inflation data, which may soon shed light on the US Fed's monetary policy outlook. Thus, if forecasts of a decrease in the indicator to 8.0% come true, the regulator may revise its "hawkish" rhetoric and move on to a more measured rate increase. In the meantime, experts have at their disposal a report on manufacturing inflation, released yesterday: the producer price index rose by 0.4% in September after falling by 0.2% last month, although analysts expected an increase of 0.2%, while in annual terms, the value slowed down from 8.7% to 8.5% compared to forecasts of a decline to 8.4%.

There key statistics from Canada will be released on Friday: forecasts suggest a sharp decrease in the dynamics of manufacturing sales by 1.8% after falling by 0.9% last month. Also, there is a possibility that the market will ignore this data against the backdrop of US publications on retail sales in September and consumer confidence in October.

Resistance levels: 1.3853, 1.3930, 1.4, 1.41 | Support levels: 1.3759, 1.37, 1.365, 1.36​

 

[SOLIDECN]

USDTRY - Lira under pressure from Turkish president's rhetoric​

The American currency failed to significantly increase in value amid the publication of poor inflation data: the consumer price index, excluding food and energy, accelerated from 6.3% to 6.6% in September, while analysts expected an increase to only 6.5% and maintained its previous growth rate at 0.6% MoM, which also was worse than market expectations of a slowdown to 0.5%. In general, inflation in the country only slightly decreased in September from 8.3% to 8.2%, while it rose from 0.1% to 0.4% MoM, which was twice worse than analysts' forecasts. Negative statistics will allow the US Federal Reserve to continue its course of further tightening of monetary policy, and now 97% of analysts are confident that in November, the regulator will raise interest rates by 75.0 basis points for the fourth time in a row.

Turkey's central bank is still pursuing a policy of gradual rate cuts, under pressure from Turkish President Recep Tayyip Erdogan, who noted that the country's authorities would not follow anyone's advice and recommendations on this issue. The government's course is aimed at correcting the indicator to stimulate exports, production, and investment, as well as to reduce inflation and support the national currency. The regulator has already lowered rates this year to 12%, and meanwhile, in September, inflation reached 83.45% YoY. However, according to statistics from the Turkish Statistical Institute (TurkStat), output in August added only 1.0% YoY. However, the 26th month of positive dynamics has been going on since April 2020, when the coronavirus pandemic began. However, growth has slowed in recent months, and industrial activity has declined amid the global downturn.

Resistance levels: 18.634, 18.75, 18.85, 19 | Support levels: 18.5, 18.373, 18.3, 18.15​

 

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XAUUSD - Upward correction around 1650​

Gold quotes again came under pressure after the publication of statistics on inflation in the US: in September, consumer prices added 8.2% after rising by 8.3% in the previous month and turned out to be worse than analysts' forecasts of an increase of 8.1%, while the Harmonized Core CPI for the same period accelerated from 6.3% to 6.6%. This strengthened investors' confidence that the US Federal Reserve will continue raising interest rates and, already during the November meeting, will increase the value by 75 basis points for the fourth time in a row. A number of other leading central banks of the world adhere to a similar policy, since inflationary risks are still extremely high.

The trend to increase the number of positions in the market continues, and last week was the third in a row, when an increase in the number of contracts was recorded. According to the latest report from the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions increased to 94.4 thousand from 88.4 thousand a week earlier. If one pays attention to the balance of sellers and buyers, the "bears" still hold the lead in the positions of swap dealers, the number of which is 169.310 thousand against 91.854 thousand of the "bulls". As for the dynamics, this week the changes affected the buyers more: they liquidated 2.423 thousand, and the sellers got rid of only 0.511 thousand.

In turn, quotes are supported by ongoing geopolitical risks due to the military conflict on the territory of Ukraine, which is still in an acute phase and there are no clear trends towards its diplomatic resolution.

Resistance levels: 1653.92, 1675, 1688.58, 1700 | Support levels: 1640, 1620, 1600, 1579.25​

 

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XAGUSD - Silver prices remain under pressure​

Silver prices show a slight increase, correcting after falling the day before. XAGUSD is testing 18.50 for a breakout, waiting for new drivers to appear on the market.

The day before, the American currency was supported by the published report of the US Federal Reserve, Beige Book, which reflected a moderate increase in economic activity in most regions of the country, which, in turn, strengthened investors' confidence in the imminent increase in interest rates by another 75 basis points. At the moment, more than 95% of analysts adhere to this scenario. Steps towards tightening monetary policy are also expected from the European Central Bank (ECB) and the Bank of England, although they are somewhat limited in their freedom of action due to significant recession threats already in the fourth quarter of this year.

The focus of investors today will be statistics from the US on the dynamics of Jobless Claims. It is expected that for the week ended October 14, the number of Initial Jobless Claims may show an increase from 228.0 thousand to 230.0 thousand. Also during the day, the release of data on the Existing Home Sales for September is expected, and closer to the end of the afternoon session, representatives of the US Federal Reserve Philip Jefferson, Lisa Cook and Michelle Bowman will speak.

The market continues the global trend to increase positions in silver, but at the moment a correction is fixed after five weeks of constant growth in the number of contracts in a row. Thus, according to the latest report of the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions amounted to 7.4 thousand against 8.7 thousand a week earlier. However, the "bulls" still hold the lead in the positions of swap dealers, and their number is 42.983 thousand, against 32.097 thousand of the "bears", which closed 1.327 thousand transactions this week, while the buyers reduced their positions by only 0.051 thousand contracts, which indicates the continued fixation of short positions in the asset.

Resistance levels: 18.68, 19, 19.2, 19.5 | Support levels: 18.29, 18, 17.52, 17​