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The GBPUSD pair fluctuates within the narrow channel 1.3100–1.3160, currently around 1.3070. Although business activity in the UK picked up sharply in March as restrictions related to the coronavirus pandemic were lifted, optimism in business circles fell to a 17-month low for the coming months as the military conflict in Ukraine and global economic uncertainty weighed on consumer spending.

Meanwhile, thousands of UK citizens took to the streets to protest the soaring electricity and gasoline prices. If earlier an ordinary English family spent about 1K pounds a year on electricity and gas, now this figure has grown to 1,971K pounds, and this year it may even reach 2,600K pounds. Despite the rise in prices, the March service business index rose to 62.6 from 60.5 in February, while the composite index rose to 60.9 from 59.9 a month earlier.

The USD Index, despite pressure, tried to break the year’s high of 99.300. The US dollar exchange rate is supported artificially since there are no economic or political drivers for such dynamics. The data on the index of purchasing managers, published yesterday, was worse than expected, amounting to 58.3 instead of 58.4 points predicted by analysts. Composite PMI from Markit was 57.7 points, which is also below the forecast of 58.5 points.



The asset is moving within the global downward channel and is approaching the support line, around which there is the year’s low of 1.3000. Technical indicators maintain a sell signal: indicator Alligator’s EMA fluctuations range is still quite wide, and the histogram of the AO oscillator forms alternating bars in the sell zone.

Resistance levels: 1.326, 1.3627 | Support levels: 1.3, 1.28​

 

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The Australian dollar shows a rather active decline during the Asian session, developing the "bearish" momentum formed the day before. The US dollar is gaining in value after yesterday's publication of the minutes of the meeting of the Federal Open Market Committee of the US Fed (FOMC), which pushed AUDUSD to new lows below 0.75.

Traders noted an even more resolute attitude of the regulator regarding the prospects for further tightening of monetary policy in the country. In particular, the Committee spoke in favor of reducing the Fed's balance sheet by 95 billion dollars a month, although earlier experts assumed that the volume could be only about 60 billion dollars. The dollar was also supported by comments from US Federal Reserve Board member Lael Brainard, who warned that the agency may need more than one rate hike by 0.50% at once during 2022.

In turn, the Reserve Bank of Australia, at a meeting held on April 5, decided to keep the official monetary rate at a record low level of 0.10%. The monetary policy statement said that the Australian economy remains resilient and spending is on the rise after the tide of the pandemic caused by the Omicron strain of coronavirus has subsided.

Some pressure on the positions of the Australian currency today is exerted by weak macroeconomic statistics from Australia. Export volumes in February showed zero dynamics after an increase of 8% in January. Imports at the same time rose sharply by 12% after falling by 2% a month earlier. As a result, the trade surplus in February fell sharply from 12.891 billion to 7.457 billion Australian dollars, which was significantly below the market's expectations of 12.000 billion Australian dollars. AiG Services PMI in March fell from 60 to 56.2 points.​

Bollinger Bands in D1 chart show active growth. The price range is sharply narrowing, reflecting ambiguous dynamics of trading in the short term. MACD reversed downwards having formed a new sell signal (located below the signal line). Stochastic is showing similar dynamics; however, the indicator line is already approaching its lows, indicating the risks of oversold AUD in the ultra-short term.

Resistance levels: 0.75, 0.755, 0.76, 0.765 | Support levels: 0.744, 0.7366, 0.73, 0.725​

 

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In the absence of positive drivers that can reverse or temporarily stop the current downtrend, the European currency continues to lose value, correcting around 1.0913 actively.

The problems associated with the energy confrontation between the EU and Russia are growing, and after statements by several German officials about the refusal of gas supplies, the press secretary of the President of the Russian Federation, Dmitry Peskov, in an interview with the LCI television channel, said that the EU countries could permanently lose access to cheap "blue fuel" in in the event of termination of cooperation since Russia will look for other markets. The recently published data on the producer price index also did not add positively to traders, which was worse than expected: the February indicator was 1.1%, which is below the forecasted 1.3%, and the annual growth was recorded at 31.4%, which is also below preliminary estimates of the market at 31.5%.

The index of the American currency could not overcome the psychologically important level of around 100 points and remained lower, around 99.600. The minutes of the meeting of the Open Market Committee of the US Federal Reserve (FOMC) published yesterday confirmed analysts' forecasts that the regulator consolidates to accelerate the increase in the interest rate and also has plans to significantly reduce the balance sheet capital, according to preliminary estimates, in the amount of up to 2T dollars.



The asset is moving within a wide downward channel and has begun working out the local Flag pattern. Technical indicators maintain a global sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms down bars in the sell zone.

Resistance levels: 1.1070, 1.1232 | Support levels: 1.0850, 1.0600​

 

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This week, the GBPUSD pair resumed its decline and tested 1.3061 (Murrey [3/8]) again but cannot consolidate below it yet.

The US currency received support after a series of "hawkish" comments from US Federal Reserve officials. Earlier, regulator board member Lael Brainard and San Francisco Fed chief Mary Daly confirmed the need for an early rate hike, and on Wednesday, they were joined by Philadelphia Fed chairman Patrick Harker. The official said that inflation expectations could become unmanageable, so he expects a methodical rate hike throughout the year. At the same time, Harker considers the development of the economy quite stable. According to the published minutes of the last meeting of the US Federal Open Market Committee (FOMC), the regulator intends to reduce the balance sheet by 95B dollars every month, starting from May of this year. As for interest rates, the possibility of accelerating their growth rates to 0.50% is allowed. In general, officials are optimistic about changing the current parameters to fight inflation, believing that the US economy is strong enough not to experience a recession, although some investors are afraid of this scenario.

The British pound looks less attractive for investment than the US currency in the current environment. Although the state of the British economy seems to be stable, business activity in all its sectors continues to increase. While traders fear a further recent impact on the Ukraine crisis figures, it should be moderate as the UK's reliance on Russian resources is less significant. The main problem is record inflation, which reduces the standard of living of the population and can put serious pressure on demand. Today came March data on prices in the housing market: the index rose by 1.4% MoM and by 11.0% YoY. Experts believe that only a combination of rate hikes by the Bank of England and lower demand from households can stop the negative dynamics.


Technically, the price remains within the long-term downward channel. The consolidation below 1.3061 (Murrey [3/8]) allows a decline to its lower border around 1.2939 (Murrey [2/8]). The key "bullish" level is 1.3183 (Murrey [4/8]), the breakout of which will allow the instrument to reach 1.3305 (Murrey [5/8]), 1.3427 (Murrey [6/8]). In general, the indicators reflect the continuation of the downward trend: Stochastic is pointing downwards, and the MACD histogram is stable in the negative zone.

Resistance levels: 1.3183, 1.3305, 1.3427 | Support levels: 1.3061, 1.2939, 1.2817​

 

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GBPUSD, consolidation near the level of 1.306​

GBPUSD has been fluctuating in a wide range of 1.3045-1.3106 over the past three trading sessions, continuing to lose value after consolidating below the April 6 low at 1.3045 following the release of "hawkish" Minutes from the US Federal Open Market Committee (FOMC). At the moment, quotes are consolidating near the level of 1.3060.

The situation around Ukraine is still in the spotlight. Western countries continue to introduce new restrictions against the Russian economy, primarily aimed at reducing or completely banning energy imports. The export of high-tech equipment, cars and agricultural machinery is also noticeably limited. However, these measures have not yet brought the expected effect, since the special military operation continues. At the same time, the position of the Western authorities has become a catalyst for updating record highs in commodity markets, which threatens to increase inflation in many regions of the world. Against this background, British Prime Minister Boris Johnson said that the UK intends to use more fossil fuels and commission one new nuclear reactor per year in order to maintain energy security. In addition, the country's government intends to abandon imported oil and gas in order to avoid a rapid increase in energy tariffs in the future, so this autumn another round of distribution of licenses for the development of the North Sea shelf by British oil and gas enterprises will be held.

The macroeconomic statistics of the United Kingdom released the day before only confirmed the fact of a rapid increase in inflation: the Halifax House Price Index accelerated from 0.8% to 1.4% in March, while analysts expected a slowdown in dynamics to 0.4%.
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Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD indicator is trying to reverse upwards and form a new buy signal (the histogram is trying to consolidate above the signal line). Stochastic is showing similar dynamics, trying to retreat from the oversold area (below the level of "20").

Resistance levels: 1.31, 1.315, 1.32, 1.325 | Support levels: 1.305, 1.3, 1.296, 1.29.​

 

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EURUSD, upcoming rate hike strengthens the USD​

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Current trend
This week, the EURUSD pair continued to decline and is currently testing the 1.0864 mark (Murray [1/8]). The movement of the pair has recently been influenced by expectations of further actions from the US Fed and the European Central Bank (ECB).

The comments of the officials of the American regulator and the minutes of its last meeting look much more "hawkish" than a similar document of the European department, which became a catalyst for strengthening the US currency. Last week, the governor of the US Fed, Lael Brainard, the head of the Federal Reserve Bank of San Francisco, Mary Daly, and the chairman of the Philadelphia Fed, Patrick Harker, spoke in favor of continuing to raise interest rates and sharply reducing the regulator's balance sheet. The protocols indicated that it could begin in May and would amount to 95B dollars per month. At the same time, the correction of the indicator may reach 0.50%. Investors fear that too rapid tightening of monetary policy may lead to a downturn in the economy, but officials are confident that it will stand the test, since the recorded growth is strong enough.

Against this background, the European currency looks less attractive for investment, experiencing significant pressure due to the Ukrainian crisis. The most negative of its consequences is an increase in inflation, which affects household incomes and reduces demand, however, unlike the US Fed, the ECB has not yet taken active actions to reduce price growth. At the last meeting of the regulator, officials agreed to stop buying bonds in Q3 2022, but did not make specific decisions on further tightening of monetary policy, probably still considering the factors of inflation growth temporary, although bidders have long been expecting the start of a rate hike cycle. Moreover, earlier, the EU authorities decided to abandon the supply of Russian coal, which can only increase energy inflation.​

Support and resistance
Consolidation of the price of the EUR/USD pair below the 1.0864 mark (Murray [1/8] the middle line of the Bollinger Bands) will give the prospect of continuing the decline to the levels of 1.0742 (Murray [0/8]) and 1.0620 (Murray [-1/8]). The key for the "bulls" is the 1.0986 mark (Murray [2/8], the middle line of the Bollinger Bands), the breakout of which will allow the instrument to strengthen to 1.1108 (Murray [3/8]), 1.1230 (Murray [4/8]). Technical indicators do not give a single signal: the Bollinger Bands are reversing downwards, the MACD histogram is increasing in the negative zone, but the Stochastic is preparing to leave the oversold zone and form a buy signal.

Resistance levels: 1.0986, 1.1108, 1.123 | Support levels: 1.0864, 1.0742, 1.062​

 

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USDJPY, the instrument is updating March local highs​

The US dollar shows strong growth against the Japanese yen during trading in Asia, continuing the development of the "bullish" trend from April 1. At the moment, USDJPY is updating local highs from March 28 and is again preparing to test strong resistance at 125.

At the beginning of the week, the "bulls" are very optimistic, but the growth factors change slightly: the US dollar is still receiving support as a "safe" asset, becoming more attractive to investors as the US Federal Reserve tightens its monetary policy. Earlier, representatives of the regulator spoke in favor of raising the rate by 50 basis points at once during the May meeting. At the same time, as expected, a program of quantitative tightening may be launched in order to reduce the balance sheet of the Fed.

In turn, the Bank of Japan is far from a possible start of tightening monetary policy. Last week, the regulator's former chief economist, Hideo Hayakawa, predicted that the agency could change current parameters as early as July as worries about the depreciation of the yen and rising inflation rise. Hayakawa's views stand in stark contrast to those of Bank of Japan Governor Haruhiko Kuroda, who has repeatedly stated the regulator's intention to maintain an ultra-loose monetary policy even after other major central banks such as the US Federal Reserve and the Bank of England raise interest rates.

The macroeconomic statistics released in Japan on Friday provided little support to the yen. Eco Watchers Current Situation Index in March rose from 37.7 to 47.8 points, which turned out to be 10 points better than market expectations. Eco Watchers Outlook for the same period strengthened from 44.4 to 50.1 points, while the forecast was 43.5 points.



Bollinger Bands on the daily chart show a steady increase. The price range is slightly expanding, but it fails to catch the surge of "bullish" sentiment at the moment. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, having reached its highs is reversing into a horizontal plane, indicating overbought USD in the ultra-short term.

Resistance levels: 125.09, 125.6, 126, 126.5 | Support levels: 124.50, 124, 123.02, 122

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EURUSD, "bears" leveled the price gap at the opening of trading​

During the Asian session, the EURUSD pair is declining, opening with a slight positive gap. Now the "bears" have leveled the gap, and the instrument is retesting 1.0880 for a downward breakdown.

The market's general situation changes slightly, and the demand for risky assets remains under pressure. Despite the growing sanctions, Russia continues to conduct a special military operation on the territory of Ukraine, while peace negotiations have almost completely faded. Last week, the EU countries agreed on a new, already the fifth package of sanctions, which, among other things, provides for new restrictions on the import of Russian coal: a complete ban on the purchase, import, or transit of solid fuel. The bill will take effect from August 10, and before that, the parties can fulfill contracts concluded before April 9. Thus, the EU authorities want to prevent the worsening of the situation with inflation, which is currently reacting sharply to the dynamics of the commodity areas. The key issue with importing oil and natural gas is still open. The European authorities have not yet developed a unified attitude towards the Russian oil embargo, although certain steps are being taken in this direction.

Meanwhile, traders continue to monitor the results of the presidential elections in France. After counting 97% of the votes in the first round, incumbent President Emmanuel Macron takes the lead with about 27.6% of the vote. Second place goes to the head of the right-wing National Rally party, Marine Le Pen. The next round of elections is due on April 24.



Bollinger bands are moderately decreasing on the daily chart, and the price range is expanding from below, letting the "bears" renew local lows. The MACD indicator is trying to reverse into an upward plane, keeping the sell signal (the histogram is below the signal line). Stochastic shows a similar trend, reversing upwards near its lows, signaling that the euro is oversold in the ultra-short term.



Resistance levels: 1.09, 1.0957, 1.1, 1.1051 | Support levels: 1.086, 1.0835, 1.08, 1.0767.​

 

[Solid ECN]

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The New Zealand dollar shows ambiguous dynamics of trading against the US dollar during today's Asian session, consolidating near the opening levels and 0.6835. NZDUSD fell sharply on Friday, recording its first fall in four weeks. Investors' fears about a series of aggressive interest rate hikes by the US Federal Reserve, as well as changing commodity prices were the catalysts for the sales of the currency. In addition, the negative dynamics of the instrument was provoked by a reduction in the spread between government bonds of New Zealand and the United States. 10-year New Zealand Treasury bonds at the end of last week showed a yield of 3.274%, and 10-year US bonds showed 2.740%.

The pressure on NZD/USD is exerted by weak macroeconomic statistics from New Zealand. Electronic Card Retail Sales in March decreased by 1.3% after a sharp decline of 7.8% a month earlier. Analysts had expected negative dynamics to remain at -0.6%. In annual terms, sales decreased by 0.5% after rising by 1.1% in February. Markets projected a sharp 9.7% growth. Later, buying activity on the instrument was supported by encouraging statistics from China. The Consumer Price Index in China in March showed an increase of 1.5%, accelerating from 0.9% shown in February. The real dynamics turned out to be noticeably better than analysts' forecasts at 1.2%.

Another "bullish" factor is the new EU sanctions policy on the Russian economy. In particular, New Zealand coal exporters positively perceived the possibility of introducing restrictions on the supply of solid fuel from the Russian Federation this summer. Currently, New Zealand exports more than a third of all coal mined in the country.



On the D1 chart Bollinger Bands are reversing into the descending plane. The price range is expanding but it fails to conform to the surge of "bearish" activity at the moment. MACD is going down preserving a stable sell signal (located below the signal line). The indicator is about to test the zero level for a breakdown. Stochastic, having reached its lows, reversed into the horizontal plane, indicating risks of oversold NZD in the ultra-short term.

Resistance levels: 0.6874, 0.6924, 0.696, 0.7 | Support levels: 0.6812, 0.6766, 0.6732, 0.67​

 

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The AUDUSD pair is falling to the support level of 0.7430 after strengthening the US dollar due to "hawkish" statements by the US Federal Reserve members.

Thus, Cleveland Fed President Loretta Meister is confident that the country will be able to avoid a recession, as the regulator will continue to tighten monetary policy, even though inflation is likely to exceed the target value of 2% next year. The dollar was further supported by the US Initial Jobless Claims, published last Thursday: the figure consolidated around 166K, which is significantly less than the forecast of 200K and lower than the previous value of 171K. Positive dynamics reflect a strong recovery national labor market.

The Australian dollar lost ground after the correction in oil prices, and the pair AUD/USD fell to 0.7430. However, according to the country's financial stability report published last Friday, large borrowers expect an increase in interest rates of the Reserve Bank of Australia, which could push the national currency quotes up to renew the last year's high.

The long-term trend is upwards. After reaching 0.7650, the instrument corrected to 0.7430. If it holds, the growth will continue with the first target at the high of the previous week. The breakdown of the support level of 0.7430 allows a correction to the 0.7300 area.


The mid-term trend may reverse downwards as the price trades below the key support at 0.7496–0.7479. If the AUD/USD pair rate consolidates below the support, zone 2 (0.7331–0.7314) will become the sell target. If quotes return to the 0.7496 area this week, the uptrend will intensify, and the new target will be 0.7655.

Resistance levels: 0.765, 0.78 | Support levels: 0.743, 0.73

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The Australian dollar is showing a weak corrective growth against the US dollar during the Asian session, recovering from a four-day "bearish" rally. The instrument is testing the level of 0.7420 for a breakout, retreating from its local lows of March 22. The positions of the asset remain under pressure from the development of a new wave of coronavirus incidence in China. The country's government has announced strict quarantine measures that will also affect Shanghai, a major financial and industrial center, which consumes about 4% of all oil purchased by China. As a result of the lockdown, many companies such as Tesla Inc., Bayerische Motoren Werke AG, Volkswagen AG, as well as some suppliers to Apple Inc. were forced to stop their activities. In total, a record 130K new cases of COVID-19 infection have been detected in Shanghai since March 1 this year.

Nevertheless, the Australian dollar was supported at the beginning of the week by optimistic macroeconomic statistics from China. The Consumer Price Index in China in annual terms in March accelerated from 0.9% to 1.5%, which was better than market expectations at 1.2%. On a monthly basis, however, inflation showed only zero dynamics after rising by 0.6% in February. Today's data support the buying mood for the instrument with strong statistics from Australia. National Australia Bank's Business Conditions in March strengthened from 9 to 18 points, while the Business Confidence index for the same period rose from 13 to 16 points, with a slowdown forecast to 8 points.



Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is expanding, however, it does not keep up with the activity of trading in the last few days, which signals in favor of the development of corrective dynamics. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic, having reached its lows, is reversing upwards, indicating risks of a strongly oversold instrument in the ultra-short term.

Resistance levels: 0.745, 0.75, 0.755, 0.76 | Support levels: 0.7398, 0.7366, 0.73, 0.725

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[Solid ECN]

USDCHF, the instrument in anticipation of new drivers​

Activity on the market remains quite high, but trades in the short term are mostly flat. Today, investors are waiting for the publication of data on consumer inflation in the US. The yield on 10-year US Treasury bonds rose above 2.81% amid "hawkish" plans by the US Federal Reserve to raise interest rates at a meeting in May and the beginning of a reduction in assets against the background of 40-year record inflation in the country. Markets are confident that the regulator will tighten its monetary policy even faster to curb inflation. Along with fears that the recent surge in commodity prices will further exacerbate consumer inflation, it has pushed US Treasury yields to new multi-year highs. According to analysts, the regulator will decide to raise the rate immediately by 0.50% at the May meeting, but much will depend on the economic situation.

The Bank of Canada and the European Central Bank (ECB) will also meet this week. Experts expect the Canadian agency to raise the interest rate by 0.5%, while the ECB is likely to keep a wait-and-see position again. Nevertheless, inflation in the EU continues to beat records, which means that pressure on the position of the European regulator is increasing, and traders expect to hear clear plans for further prospects for monetary policy. The original plans to launch a rate hike cycle in June may be revised.



On the daily chart, Bollinger Bands are moving flat. The price range remains virtually unchanged but remains spacious enough for the current level of activity in the market. The MACD indicator grows, keeping a very poor buy signal (the histogram is above the signal line). Stochastic reversed downwards at 80, reacting to the "bearish" nature of trading at the end of last week.

Resistance levels: 0.9320, 0.9352, 0.9381, 0.9430 | Support levels: 0.93, 0.9279, 0.925, 0.9219.

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[Solid ECN Securities]

NZDUSD, card spending in New Zealand has skyrocketed​

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Despite the positive macroeconomic statistics from New Zealand, the NZD/USD pair declines, trading near the level of 0.6829. Yesterday, Stats NZ published a report on e-card spending, according to which the country increased its spending by 124M New Zealand dollars last month, up 1.6% from February. The positive dynamics were noted in the tourism and healthcare industries, where electronic payments grew by 14.5%, while the same indicator, which considers transport trips, added 2.7% due to higher fuel prices.

At tomorrow's meeting of the Reserve Bank of New Zealand on monetary policy, interest rates are expected to rise to 1.25% from 1.00%, which was announced by officials earlier as part of a program to combat high inflation. Analysts are divided on whether the regulator will raise rates by 25 bps or 50 bps, although money market pricing favors the latter.

The US currency was as close as possible to this year's key level of around 100 points in the index before the publication of today's inflation data. The consumer price index is forecast to rise to 8.4% from 7.9% a month earlier, while the core consumer price index, which excludes fuel and food, is expected to rise to 6.6% from 6.4%. Implementation of expectations will negatively affect both the dollar rate and the state of the US economy.



The asset moves within the local Expanding formation pattern, completing the eighth wave. After working out a local sell signal, technical indicators are uncertain: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram is close to the transition level.

Resistance levels: 0.6871, 0.6987 | Support levels: 0.6742, 0.6337​

 

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GBPUSD, pending statistics on the dynamics of consumer prices​

The British pound traded with an uptrend against the US currency during the morning session, trying to regain a foothold above 1.3. Activity on the market remains quite low, as market participants are waiting for the publication of a block of macroeconomic statistics from the UK on the dynamics of consumer prices.

Inflation is one of the key indicators today, since the world regulators largely rely on it when choosing the vector of monetary policy. According to current forecasts, the UK Consumer Price Index in March will accelerate from 6.2% to 6.7%, updating record highs.

At the moment, the positions of the pound are supported by relatively optimistic data on the UK labor market, which were published the day before. ILO Unemployment Rate unexpectedly decreased from 3.9% to 3.8% with a neutral forecast. Average Earnings Excluding Bonus for the same period accelerated growth from 3.8% to 4.0%, which coincided with analysts' forecasts. Average Earnings Including Bonus increased from 4.8% to 5.4%. Only BRC Like-For-Like Retail Sales were noticeably disappointing, dropping 0.4% in March after rising 2.7% a month earlier.
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Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is slightly narrowing, reflecting the emergence of multidirectional trading dynamics in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic remains horizontal for some time, holding close to the level of "20". The indicator readings signal the risks of the pound being oversold in the ultra-short term.

Resistance levels: 1.305, 1.31, 1.315, 1.32 | Support levels: 1.3, 1.296, 1.29, 1.285​

 

[Solid ECN]

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The European currency continues to trade in a downtrend around 1.0833 amid poor macroeconomic reports.​

Thus, the index of current economic conditions from ZEW in Germany in April fell to –30.8 points from –21.4 points, and the index of economic sentiment in Germany fell to –41.0 points from –39.3 points, while the same indicator in the euro area fell to –43.0 points from –8.7 points a month earlier. ZEW spokesman Achim Wambach said business is pessimistic about the current economic situation and expects it to continue to worsen as the threat of stagflation persists. Also, the region is experiencing record inflation growth: in Germany, the indicator added 2.5% for March after rising by 0.9% for February and has already reached a record 7.3% YoY. The single European currency is also under pressure from possible disruptions in Russian oil and gas supply to the EU countries. European Commission President Ursula von der Leyen and EU diplomat Josep Borrell announced their intention to extend EU sanctions on oil exports, including them in the sixth package of restrictions against the Russian economy.

As expected earlier, the US currency has overcome the index's psychological mark of 100 points and is now trading around 100.300 points. Positive dynamics were facilitated by data on inflation in the United States, which reached the maximum of 1981, consolidation for March at 8.5% YoY, which exceeded even the bold forecast of analysts at 8.4%. Thus, the value added another 1.2% to the March figure. The largest value growth was recorded for used cars (+35%) and energy products (+32%).



The instrument moves within a wide downward channel, approaching the support line. Technical indicators maintain a global sell signal: fast EMAs on the Alligator indicator are below the signal line, while the AO oscillator histogram remains in the sell zone, forming down bars.

Resistance levels: 1.0912, 1.1155 | Support levels: 1.08, 1.06​

 

[Solid ECN]

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AUDUSD, the instrument is in a state of uncertainty​

This week, the AUDUSD pair is trading at 0.7445 (Fibonacci correction 23.6%, Murrey [6/8]) and cannot move away from it yet. Investors expect specific steps to tighten monetary policy from the US Federal Reserve and the Reserve Bank of Australia (RBA), so the instrument quotes are in a state of relative equilibrium.

US inflation data for March released yesterday was ambiguous: the consumer price index rose from 0.8% to 1.2% MoM and from 7.9% to 8.5% YoY, the most serious increase since 1981. However, the core consumer price index fell from 0.5% to 0.3% MoM and corrected from 6.4% to 6.5% YoY, which is lower than experts' expected value of 6.6%. This statistic aroused hope among investors that prices would slow down. Some experts believe that the March rise in prices has become a peak, and a correction will follow in the future. US Federal Reserve Governor, Lael Brainard, noted that the slowdown in the growth of the core index might be an omen of the coming decline in inflation, but these comments look like an attempt to find at least one positive moment in the current difficult situation. Prices, especially for energy, gasoline, and food, continue to skyrocket, necessitating decisive action on the part officials.

The position of the Australian currency looks relatively stable. It is supported by high prices for raw materials and a decrease in the incidence of coronavirus, which creates favorable conditions for doing business. According to March data, the country's business conditions index rose from 9 to 18 points and the business confidence index – from 13 to 16 points. However, rising inflation, which is beginning to curb consumer demand, prevents the national currency from strengthening. The Westpac Consumer Sentiment Index for April, released today, only confirmed this: the index fell for the fifth month in a row, this time by 0.9%.



The key "bearish" level is 0.7385 (Murrey [5/8]). Its breakdown will give the prospect of further decline to 0.7263 (Murrey [3/8]) and 0.7200 (Murrey [2/8], Fibonacci retracement 61.8%). If the middle line of Bollinger bands (0.7475) is broken upwards, the growth may continue to 0.7568 (Murrey [8/8]) and 0.7660 (April highs). The indicators do not give a single signal: Bollinger bands are directed upwards, the MACD histogram decreases in the positive zone, and Stochastic prepares to leave the overbought zone and form a buy signal.

Resistance levels: 0.7475, 0.7568, 0.766 | Support levels: 0.7385, 0.7263, 0.72​

 

[Solid ECN]

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The European currency shows moderate growth against the US dollar during the Asian session, developing a "bullish" signal formed the day before, when the instrument retreated from its March 7 local lows.

The growth of buying activity in the single currency is facilitated by technical factors, as well as some correction of the US dollar after the publication of consumer and industrial inflation, which, as expected, renewed record highs. The Producer Price Index released the day before rose by 1.4% in March after rising by 0.9% a month earlier. Analysts expected an acceleration of only up to 1.1%. In annual terms, the growth rate of producer prices accelerated from 10.3% to 11.2%, which was also higher than the market forecast at 10.6%. Such statistics once again confirm the fact that many politicians and economists were mistaken last year, arguing that the rapid rise in prices is only a temporary phenomenon.

Support for the single currency is also provided by the meeting of the European Central Bank (ECB), which will be held today. Despite the fact that analysts' forecasts do not imply any changes in the vector of the monetary policy of the European regulator, the comments of its representatives will be extremely important. Traders are primarily interested in the timing of the start of the rate increase, since the central banks of developed countries have already managed to resort to tightening monetary policy. Investors will focus on a statement by the ECB President Christine Lagarde, including information on how long after the end of the quantitative easing program a cycle of rate hikes could begin, given the complex combination of inflation far above the target and a slowdown in the national economic recovery due to a sharp jump in energy prices.



On the D1 chart, Bollinger Bands demonstrate a tendency to reverse into a horizontal plane. The price range is also trying to consolidate, but within a fairly wide range, fully consistent with the observed dynamics. MACD is reversing upwards and forming a new buy signal (located above the signal line). Stochastic is showing the same dynamics being located in the middle of its area.

Resistance levels: 1.09, 1.0957, 1.1, 1.1051 | Support levels: 1.086, 1.0835, 1.08, 1.0767

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[Solid ECN]

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The US dollar shows a slight decrease against the Japanese yen in Asian trading, retreating from the record highs updated the day before and again testing 125.00 for a breakdown. The decline of the US currency is largely due to technical factors, while the general news background changes slightly.

The day before the US released a block of statistics on producer inflation, which, as expected, reflected the rise in prices to new record highs at 9.2%. The US Federal Reserve has less and less freedom of action at the upcoming meeting in May, where, as expected, the rate will be raised immediately by 50 basis points. Similar measures were taken by the Bank of Canada and the Reserve Bank of New Zealand, bringing their interest rates to 1% and 1.5% respectively.

The Japanese yen came under pressure as the Fed's expected aggressive monetary tightening contrasts sharply with the Bank of Japan's ultra-soft stance, but the general inflation situation around the world could push the Japanese economy, which has long suffered from deflation, to rise (consumer prices in March grew by 0.4% year-on-year). Bank of Japan Governor Haruhiko Kuroda acknowledged that the recent rise in inflation, fueled by higher import costs, could hurt the national economy. It is still premature to say when the regulator will think about raising the interest rate, and therefore the dollar will remain more in demand as a safe-haven currency for a long time to come.

Today, investors are waiting for the publication of statistics on jobless claims in the US. In addition, March Retail Sales figures will be released, promising a significant increase compared to February.



Bollinger Bands in D1 chart show moderate growth. The price range expands from above, freeing a path to new record highs for the "bulls". MACD indicator tries to reverse downwards and to form a new sell signal (the histogram is about to consolidate below the signal line). Stochastic is showing a more confident decline, signaling a strongly overbought USD in the ultra-short term.

Resistance levels: 125.6, 126.3, 127 | Support levels: 125.09, 124.5, 124, 123.02

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[Solid ECN]

GBPUSD, UK inflation hits 30-year high​

Yesterday, the pound made one of the most serious upswings for the current year and has now reached 1.3135. Investors are focused on the statistics from the UK on inflation, which has long gone beyond the target levels of the Bank of England and therefore creates only additional threats to the economic recovery process after the coronavirus pandemic.

Thus, CPI for March rose by 1.1% after rising by 0.8% a month earlier, although analysts had expected a value of 0.7%. It reached new record highs at 7% YoY, while market forecasts suggested an increase from only 6.2% to 6.7%. Thus, the March inflation in the UK was a record for the last 30 years – since March 1992. PPI also rose to 19.2% YoY from 15.1%, but the sharpest jump was recorded for prices that include homeowners' costs for their living space. According to the calculations of the special index CPIH (inflation, taking into account the costs of homeowners for its maintenance) for February and March, the indicator corrected immediately by 11.7%. Experts believe that rising inflation will put additional pressure on the Bank of England, forcing officials to accelerate the pace of raising interest rates.

Meanwhile, after reaching the key mark of 100.000 points in the USD Index, the US currency could not hold its position for a long time and returned to the current levels around 99.600. Today, data on initial jobless claims will be published, which will help assess the local state of the labor market and predict the prospects for the movement of dollar quotes for the next week.
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The pair continues to trade within the global downward channel, but after reaching the support line at 1.3000, it reversed and began to form a new upward wave. Technical indicators keep the weakening sell signal. Indicator Alligator's EMA fluctuations range narrows, and the histogram of the AO oscillator approaches the transition level.

Resistance levels: 1.3259, 1.3616 | Support levels: 1.3, 1.28​

 

[Solid ECN]

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AUDUSD shows a moderate decline during the Asian session, testing 0.74 for a breakdown. The instrument is preparing to finish yet another trading week in the "red" zone; however, due to the active growth of the Australian currency last Tuesday, the total losses can be characterized as insignificant.

In addition to the rising US dollar, quotes are under pressure from weak macroeconomic statistics from Australia, published the day before. Employment Change in March was recorded at around 17.9K, which was below market expectations at the level of 40K and significantly inferior to 77.4K shown in February. At the same time, Full-Time Employment decreased from 121.9K to 20.5K, while the dynamics of Part-Time Employment improved from -44.5K to -2.7K. The Unemployment Rate remained at 4%, while many experts were confident that it would stay below this psychological level. At the same time, Consumer Inflation Expectations rose from 4.9% to 5.2% in April, while analysts had projected a decline to 4.6%.

Investors continue to monitor the consequences of the Russian-Ukrainian conflict. The Australian government imposed targeted financial sanctions on 14 Russian state-owned enterprises of strategic and economic importance. In particular, PJSC Gazprom, PJSC Rostelecom, JSC United Shipbuilding Corporation, JSC Ruselectronics, PJSC Novorossiysk Commercial Sea Port, PJSC Alrosa, JSC Russian Railways, and others were included in the list.



On the daily chart, Bollinger Bands are moderately declining. The price range expands, making way to new local lows for the "bears". MACD is preserving a stable sell signal (located below the signal line). Stochastic, having tried to reverse upwards at the beginning of the current week is directed downwards again, indicating the continuing risks of the instrument being oversold in the ultra-short term.

Resistance levels: 0.745, 0.75, 0.755, 0.76 | Support levels: 0.74, 0.7366, 0.73, 0.725

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