GBPUSD British currency is trying to grow. GBP/USD is developing the upward trading dynamics against the background of the depreciation of the US dollar and is currently at around 1.3546.
The pound quotes reacted with growth to the statements of British Prime Minister Boris Johnson that the high rates of revaccination of the population make it possible to avoid severe restrictive measures and the introduction of a lockdown is not planned in the near future, despite the fact that the UK, like many other European states, is faced with another wave of coronavirus caused by the Omicron mutation. According to Johnson, an increase in the incidence will be observed in the coming weeks, and the load on the national health system will increase significantly, but the country, in his opinion, will be able to overcome the fourth wave of the epidemic without resorting to quarantine.
The authorities’ refusal to tighten sanitary standards has inspired investors, who hope that the epidemiological situation will not affect the pace of economic recovery. The pound was also supported by the December data on business activity indices: in the services sector, the indicator was 53.6 points, which is higher than the 53.2 points predicted by analysts, as well as the composite PMI index, which showed absolutely identical values.
The positions of the US dollar slightly corrected after the indicator of Initial Jobless Claims again exceeded the threshold of 200K, amounting to 207K against the background of 197K expected by analysts. The number of Continuing Jobless Claims also increased to 1.754M, higher than the market’s preliminary estimates of 1.688M. The final data on Nonfarm Payrolls are due today and if the number of jobs falls below the forecast, the US dollar may continue the downtrend.
Support and resistance
GBP/USD is trading within the global downtrend channel, having approached the resistance line. Technical indicators are holding a signal to open long positions: the fast EMAs of the Alligator indicator is above the signal line, and the histogram of the AO oscillator is trading in the buy zone, forming ascending bars.
USDCHF probability of a growth asset remains, After last week’s correction to the area of 0.9180–0.9160, USD/CHF quotes continue their upward trend against the background of the publication of data on a decrease in unemployment rate in the USA last month by 0.3%.
Last Friday, statistics on the US labor market were released. The dynamics of changes in the number of people employed in the non-agricultural sector disappointed investors and amounted to only 210K instead of the 550K predicted by analysts. However, the markets were able to recover from a short-term correction in the USD, playing back data that recorded a decrease in the unemployment rate in the country.
The indicator was 4.2% with a forecast of 4.5%. According to key indicators, the national economy continues to approach the pre-crisis levels of the beginning of last year, which has a strengthening effect on the US currency.
The long-term trend in USD/CHF is upward with the aim of growth near the November high of 0.9360. The key trend support is located at 0.9089.
The mid-term trend changed to a downward one last week after the breakdown of the key support at 0.9258–0.9247 and the price-fixing below it. Now the target for sales is target zone 2 (0.9147–0.9136). The price of USD/CHF is being adjusted and is trying to test the trend boundary of 0.9280-0.9269. The most optimal entrances to sales transactions are located in the area of 0.9280-0.9247.
Support and resistance
Resistance levels: 0.9360, 0.9434.
Support levels: 0.9119, 0.9089.
Short positions may be opened from the level of 0.9270 with targets at 0.9150 and stop-loss at 0.9305.
Implementation time: 7-10 days. Long positions can be opened above 0.9305 with target at 0.9400 and stop-loss at 0.9270.
Scenario:
Recommendation SELL LIMIT Entry point 0.9270 Take Profit 0.9150 Stop Loss 0.9305 Key levels 0.9089, 0.9119, 0.9360, 0.9434
Alternative Scenario:
Recommendation
BUY STOP Entry point 0.9310 Take Profit 0.9400 Stop Loss 0.9270 Key levels 0.9089, 0.9119, 0.9360, 0.9434
USDCHF Swiss economy shows signs of a slowdown. The USDCHF pair shows a downward trend, trading at 0.9181. The franc resists the growth of the dollar, although investors perceived the latest macroeconomic data from Switzerland as contradictory.
Thus, the national economy shows a slowdown: according to January data, quarterly GDP rose by 0.3% after increasing by 1.9% a month earlier. The negative dynamics were also reflected in the annual rate, which reached 3.7% instead of 3.8% a month earlier. Meanwhile, the index of leading economic indicators also lowered the Swiss Economic Institute (KOF): the February figure was 105.0 points against 107.5 points a month earlier. Strengthening of positions was demonstrated only by the January retail sales volume, which increased to 5.1% after falling by 0.5% in December.
The index of the US currency began to decline slowly after yesterday’s trading reached a yearly high of around 97.350. Investors fear that unprecedented economic sanctions against Russia could harm the global economy and provoke even more disruptions in the supply of raw materials and goods than they were during the peak of the incidence of the Delta strain of coronavirus. Today, February data on the state of the US manufacturing sector will be published. The business activity index may rise to 57.5 points from 55.5 points a month earlier.
Support and resistance
On the daily chart, the price moves within the global side channel, gradually approaching the support line. Technical indicators remain in a state of uncertainty: fast EMAs on the Alligator indicator is close to the signal line, and the AO oscillator histogram stays close to the transition level.
NZDUSD trading volumes began to decline. The New Zealand currency is correcting against the US dollar on the background of positive macroeconomic statistics and is now near 0.6746.
International trade continues to grow. As of November, New Zealand’s imports rose to 6.73B NZ dollars and exports reached 5.86B NZ dollars. The trade balance in November amounted to -864M NZ dollars, and in annual terms, the figure was fixed at -6.040B NZ dollars.
The positive dynamics of the recovery of the national economy can be traced by statistics of Credit Card Spending: in November, the figure was -0.1%, which is significantly better than -5.2% shown a month earlier. Thus, despite the impact of the coronavirus pandemic, the indicators continue to improve with confidence, supporting the exchange rate of the New Zealand currency.
The US dollar remains at its opening levels for the week, just above 96.500 in the USD Index. Trading volumes dropped markedly due to investors leaving for the Christmas holidays. Perhaps the only news that could change the rate of the US currency was a bill to allocate 2T US dollars to support the national economy, but, according to the leader of the majority in the US Senate Chuck Schumer, Democrats will consider this issue only in 2022.
Support and resistance
Quotes of NZD/USD are correcting within the next downward wave of the global downward channel. Technical indicators hold a stable sell signal, but do not exclude corrective growth: the range of the Alligator indicator EMAs fluctuations continues to narrow down and the histogram of the AO oscillator forms local ascending bars being in the sales area.
The bulls did not manage to gain enough momentum to successfully breach the resistance zone of 1.1597 and, during the early hours of today`s trading session, the pair is trading just under the mentioned level. A new test of the level in question is a highly probable scenario and, if successful, the pair will most likely continue to recover and target the resistance level of 1.1639. However, if the bears regain control of the market and breach the support zone of 1.1528, the common European currency will most likely continue to lose ground against the greenback and move towards the levels of around 1.1400. During today’s session, volatility could spike when the data for the retail sales in the U.S. is announced (today; 12:30 GMT).
USDCHF forming a local correctional formation. The trading instrument demonstrates a local upward correction and is currently trading at 0.9216.
The Swiss currency remains under serious pressure. After the quarantine measures were seriously tightened in a number of European countries due to the gathering new wave of the pandemic, the country’s authorities also decided to tighten sanitary rules from December 20 to January 24. Now only vaccinated citizens or those who previously had COVID-19 will have access to restaurants, cultural institutions, sports, and entertainment centers.
The Swiss National Bank also pointed out a possible decline in economic indicators due to restrictions caused by the spread of the Omicron strain in its report on monetary policy. According to the regulator, the global economic recovery slowed down in Q3 2021, which led to an increase in consumer prices and a decrease in the activity of the industrial and service sectors. The new inflation forecast for the current year is 0.6%, with a gradual increase in 2022 to 1.0%.
The smooth growth of USD/CHF in the near future may be interrupted by the depreciation of the US dollar, which is under pressure due to the continued growth in the number of coronavirus cases in the United States. According to the New York state authorities, over the past day, another record of 23.4K cases was set; however, the holiday weekend is approaching, and during this period investors are trying to avoid active work on the stock exchange, which can lead to the preservation of the pair’s rate at current levels until the end of the week.
Support and resistance
On the daily chart of the asset, the price is trading within the global ascending channel, forming a local corrective formation. Technical indicators are in a state of uncertainty: the fluctuation range of the Alligator indicator EMAs have completely narrowed and the histogram of the AO oscillator approached the transition level as close as possible.
Morning Market Review, EUR is showing insignificant growth against USD during today’s Asian session, correcting after falling the day before. The “bullish” activity remains rather low, so the instrument is still holding near 1.1200 and its record lows since mid-summer 2020. The euro is noticeably inferior to the dollar, as investors are not sure that the European Central Bank (ECB) is ready to start tightening monetary policy, while the US Federal Reserve, judging by the comments of its representatives, is looking for an opportunity to accelerate the winding down of the current quantitative easing program (QE).
Additional pressure on the position of the euro is exerted by the worsening epidemiological situation in the region, which forces the European authorities to take extremely unpopular measures. Macroeconomic statistics released in Germany yesterday also did not add optimism to the markets. The IFO Business Climate index in November fell from 97.7 to 96.5 points, which was close to the forecasts at 96.6 points. The IFO Expectations index for the same period was revised from 95.4 to 94.2 points against the forecast of analysts at 95 points.
GBP/USD
The British pound is trading higher against the US currency during the morning session, trying to recover from a strong “bearish” rally since the end of last week, which has led to a renewal of record lows since December 2020. The growth of the instrument at the end of the week is mainly driven by technical factors, while the fundamental background changes little. Also, buying activity for the pound is affected by the markets closed in the US on the occasion of Thanksgiving Day. The day before, a large block of macroeconomic statistics was released in the US, which provided additional support to the American currency.
The number of initial jobless claims fell sharply from 270K to a new post-crisis low of 199K. Analysts had expected a decline to 260K. Personal Income of American citizens in October increased by 0.5% MoM, while Personal Expenses added 1.3% MoM. At the same time, the Durable Goods Orders suddenly decreased by 0.5% MoM (the forecast assumed an increase of 0.2% MoM), and the annualized GDP data for Q3 2021 reflected the acceleration of the economy to only 2.1% from 2.0% YoY.
NZD/USD
The New Zealand dollar is showing near-zero trading dynamics during the Asian session, consolidating around 0.6870. The “bulls” are trying to slightly recoup after a sharp decline the day before, which led to the renewal of local lows since August 23. Trading activity remains subdued today as markets in the US are closed for Thanksgiving. Nevertheless, traders have at their disposal a large block of statistics from the United States, which was published the day before.
The data managed to support the buyers of the American currency with a confident decrease in the number of Initial Jobless Claims from 270K to 199K, while the dynamics of GDP in Q3 2021 changed slightly (from 2.0% YoY to 2.1% YoY), while the statistics on Durable Goods Orders reflected a decline of 0.5% MoM, contrary to forecasts of an increase of 0.2% MoM. Some support for the New Zealand dollar is provided by statistics from New Zealand. Exports in October increased from 4.36B to 5.35B dollars. Imports for the same period accelerated from 6.57B to 6.64B dollars. The trade deficit narrowed from 2.206B to 1.286B dollars.
USD/JPY
The US dollar is trading mixed against the Japanese yen in Asia, consolidating near 115.35 and new all-time highs since March 2017. The American currency showed another growth the day before, responding to the publication of a large number of macroeconomic statistics from the United States, which, in general, confirmed the possibility of accelerating the pace of tightening of monetary policy by the US Federal Reserve.
The most striking positive moment was the decrease in the number of initial jobless claims below the next psychological level of 200K. Additional support was provided by data on the dynamics of personal income and spending of American citizens in October. Trading activity during the Asian session remains rather low as Thanksgiving is celebrated in the US today. Investors are focused on macroeconomic statistics from Japan today. The Coincident Index in September showed a decrease from 91.3 points to 88.7 points, which turned out to be better than market expectations at 87.5 points. The Leading Economic Index for the same period decreased from 101.3 to 100.9 points with the forecast of 99.7 points.
XAU/USD
Gold prices are showing weak corrective gains during the Asian session, trying to recover from a sharp decline earlier this week, which led to the renewal of local lows from November 4. At the moment, the instrument is again testing 1800.00 for a breakout; however, only technical factors contribute to the growth of buying activity, while the news background changes insignificantly. The macroeconomic statistics from the United States published yesterday supported investor confidence that the US Fed will probably try to reconsider the pace of monetary tightening, which will ultimately lead to a more rapid increase in interest rates.
