Solid ECN | Professional Market Analysis | *Video*

[SOLIDECN]

EURUSD
market is waiting for the ECB meeting​

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The day before, EURUSD corrected upwards against the current medium-term downtrend and reached 1.1094. Investor demand for risky assets is fixed against the backdrop of reports of a possible serious increase in oil production by Iraq and the United Arab Emirates, which could stop the rapid rise in commodity prices and reduce inflation. The rate of currencies alternative to the US dollar is also supported by reports about the start of negotiations between the foreign ministers of the Russian Federation and Ukraine in Turkey, which give the market hope for a resolution of the military conflict through diplomacy.

The downtrend in the asset may resume in case of a negative reaction of traders to the results of the next meeting of the European Central Bank (ECB). In the face of geopolitical uncertainty, the regulator is expected to be cautious and possibly hint at maintaining the current monetary policy, trying to prevent stagflation, in which prices in the eurozone continue to rise and business activity begins to decline. In addition, investors' attention today will be drawn to the February data on inflation in the US. It is predicted that the Consumer Price Index will increase from 0.6% to 0.8% in monthly terms and from 7.5% to 7.9% in annual terms. An increase in price pressure may push the US Fed to more actively tighten monetary policy.

Resistance levels: 1.1108, 1.123, 1.1352.
Support levels: 1.0986, 1.0864, 1.0742.​

 

[SOLIDECN]

GBPUSD, consolidation near record lows​

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At the same time, activity on the market remains quite low ahead of the publication of a large block of the UK macroeconomic statistics. Today, traders focus on the January data on GDP and industrial production dynamics. It is assumed that the economy of the United Kingdom may show growth of 0.2% after declining by a similar amount last month. Also, during the day, there will be February estimates of GDP growth from the National Institute of Economic and Social Research (NIESR) and a forecast for the dynamics of consumer inflation. The United States will release the index of consumer confidence from the University of Michigan for March (preliminary forecasts suggest a drop in values from 62.8 to 61.3 points).

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

 

[SOLIDECN]

USDCHF, the US dollar ends the week with a strong rise​

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Thus, the regulator decided to keep the key interest rate unchanged at 0% but announced a more rapid curtailment of the current quantitative easing (QE) program. Key interest rates will remain at their current levels until inflation in the euro area reaches the target level of 2% (in February, the indicator showed an increase to 5.8% against 5.1% a month earlier, becoming a record for the entire history of observations). Therefore, cardinal changes should be expected already in the third quarter of this year. Also, the agency will reduce APP bond purchases to 30B euros in May and then to 20B euros in June, while PEPP asset buybacks will be slower than in the previous quarter and, as planned, completed by the end of March. Analysts believe that the current decisions of the European financial authorities are aimed at maintaining flexibility in the face of market uncertainty caused by the launch of a special military operation of Russian troops in Ukraine.

Support and resistance
Resistance levels: 0.93, 0.9341, 0.9372, 0.94.
Support levels: 0.9271, 0.925, 0.922, 0.92.​

 

[SOLIDECN]

AUDUSD, the Australian dollar is losing ground​

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Investors are fixing long profits at the end of the week, continuing to take a lead from macroeconomic statistics from the US. The data released yesterday reflected the growth of the Consumer Price Index in the US in February from 0.6% to 0.8%, which fully coincided with analysts' forecasts. In annual terms, inflation in the country accelerated from 7.5% to 7.9%. At the same time, Consumer Price Index excluding Food and Energy over the same period accelerated only from 6% to 6.4% in annual terms, and in monthly terms it slowed down from 0.6% to 0.5%.

Either way, energy prices are the biggest concern at the moment. The development of the military conflict in Ukraine has already caused some countries to adjust their supply chains, and further sanctions against the Russian economy threaten a total restructuring of all the usual energy flows in Europe. Earlier, the United States announced a complete embargo of "black gold" from Russia, but the eurozone authorities are not yet ready to join this decision, since they are more dependent on imports from Russia. Nevertheless, the leaders of European countries announced a course towards the gradual abandonment of oil and gas from Russia, condemning the actions of the authorities of this country in Ukraine.

Support and resistance
Resistance levels: 0.7366, 0.744, 0.75, 0.755.
Support levels: 0.73, 0.725, 0.72, 0.7158.​

 

[SOLIDECN]

GBPJPY Tests 200 DMA​

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Traders were trying to remain optimistic Friday, buying riskier assets such as stocks and selling JPY crosses, pushing GBPJPY toward its 200-day moving average at 153.3. If that level (the green line) is broken to the upside, we could see another leg higher, targeting the 50-day moving average (the purple line) near 155.25. Alternatively, if traders sell the current rally, the decline could be bought near the support zone at 152.50. The short-term outlook will likely depend on the developments coming from Ukraine.

The USDJPY pair has already broken to the upside from its multi-month triangle pattern, soaring to the highest level since 2017. Therefore, we might see further buying pressure in the JPY crosses. The outlook seems neutral from the long-term perspective as the cross has been stuck in a narrow range between 158 and 149 (as shown on the chart with blue horizontal lines).

Earlier in the day, the Office for National Statistics showed the UK economy bounced back strongly in January after taking a hit from the Omicron variant and Plan B restrictions. GDP grew 0.8% after contracting by 0.2% in December, coming in comfortably ahead of expectations of 0.1% growth. This leaves GDP 0.8% above pre-pandemic February 2020 levels.

In the initial reaction, sterling failed to rally after the data, but sentiment improved ahead of the US session, strengthening the Pound.​

 

[SOLIDECN]

EURUSD, the euro is testing 1.09​

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The European currency shows mixed dynamics of trading against the US dollar during the Asian session, consolidating near 1.09 in anticipation of new movement drivers.

EURUSD ended last week's trading with an active two-day decline, which almost completely leveled the instrument's attempt to grow on Tuesday and Wednesday. Significant support for the euro was provided by the rhetoric of the European Central Bank (ECB), which announced the curtailment of the quantitative easing (QE) program sooner than expected. Asset purchases will be slowed down from 40 billion euros in April to 30 billion euros in May and to 20 billion euros in June, although earlier it was planned to gradually reduce from 40 billion euros to 20 billion euros by October. The "hawkish" rhetoric of European officials means that before the end of the year, the regulator will be able to get additional space to start a full-fledged tightening of monetary policy through an increase in interest rates, which will remain at current values until inflation reaches the target value of 2%.

In turn, pressure on the euro continues as the conflict escalates in Ukraine, where Russian troops continue to conduct a special military operation. Western countries are introducing more and more new sanctions against businesses and individuals. US authorities have already banned the import of oil, gas and other energy products from Russia, and Europe, in turn, being more dependent on Russian exports, is likely to act gradually. The European Commission has already presented a project for an accelerated phase-out of Russian energy carriers, under which the EU's need for gas from Russia will be reduced by two-thirds by the end of 2022. At the moment, the EU imports 90% of "blue fuel", about 45% of which is supplied by the Russian Federation.

Support and resistance
Bollinger Bands in D1 chart demonstrate active decrease. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal. Stochastic shows more confident negative dynamics, but at the moment it is rapidly approaching its low, indicating the risks of EUR being oversold in the ultra-short term.

Resistance levels: 1.0957, 1.1, 1.1054, 1.11.
Support levels: 1.09, 1.086, 1.08, 1.0767.​

 

[SOLIDECN]

NZDUSD, the instrument develops a corrective impetus​

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The New Zealand dollar starts the week with a slight decline against the US currency, trying to consolidate below the psychological support level at around 0.68.

The pressure on the position of the instrument is exerted by the continuing demand for safe assets as the geopolitical situation in Europe worsens. In addition, the market is alarmed by the sharp rise in energy prices around the world, as well as the likelihood of further deterioration of the situation as Western countries abandon Russian oil and gas. Additional support for the US currency is provided by the expectations of the launch of a cycle of tightening monetary policy by the US Federal Reserve this week. The regulator's meeting will take place on Wednesday, and current market forecasts suggest that the rate will be increased by 25 basis points.

Published on Friday, macroeconomic statistics from New Zealand and the US were mixed. Thus, the Manufacturing PMI of New Zealand in February showed a slight increase from 52.3 to 53.6 points, which fell short of analysts' forecasts at the level of 54.5 points. At the same time, the Food Price Index unexpectedly fell by 0.1% in February after rising by 2.7% in January. The market expected the index to slow down to 1.3%. Data from the US, in turn, disappointed investors with a noticeable drop in Consumer Confidence Index from the University of Michigan in March from 62.8 to 59.7 points, while the market expected a decline to only 61.4 points.

Support and resistance
Bollinger Bands on the daily chart show a weak increase: the price range is narrowing, reflecting the emergence of multidirectional dynamics in the short term. MACD is falling, keeping a fairly strong sell signal (the histogram is below the signal line). Stochastic shows an even more active decline, but is located in close proximity to its lows, which indicates the risks of the New Zealand dollar being oversold in the nearest time intervals.

Resistance levels: 0.6795, 0.684, 0.6866, 0.69.
Support levels: 0.6766, 0.6732, 0.67, 0.665.​

 

[SOLIDECN]

GBPUSD, the downtrend increases​

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The British pound continues to decline, reacting to negative inflation statistics and increased geopolitical tensions in the world, currently trading around 1.303.

GBPUSD remains under pressure ahead of the Bank of England interest rate meeting scheduled for March 17, as well as a significant increase in consumer prices and energy tariffs, as a result of which households will be forced to reconsider their spending. Based on the latest data, official inflation in the United Kingdom for January was 5.5% in annual terms, the highest value in the last 30 years. According to a study by the analytical company Resolution Foundation, against the backdrop of negative dynamics, the additional average spending per household will increase by 1 thousand pounds in the next financial year.

The British pound may be supported by the fact that in January the national economy has been actively recovering over the past seven months, exceeding the figures before the start of the coronavirus pandemic: GDP rose by 0.8% from 0.2% in December, when the Omicron strain was spreading. Compared to February 2020, Manufacturing Production increased by 0.8%, with growth observed in all sectors of the economy. This data may push the Bank of England to raise interest rates to fight inflation, as a result of which GBP/USD may correct to the levels of 1.3200 and 1.3400 in the medium term.

Support and resistance
The long-term trend in GBP/USD is downward. Last week, market participants managed to fix the price below the support level of 1.3065, which allows considering new sales with the target of 1.2905. The level of 1.32 turns into resistance, and the trend boundary shifts to 1.3400.

As part of the medium-term downtrend, all targets were reached last week. At the moment, market participants are testing target zone 2 (1.306–1.3026), which currently acts as support and holding which will allow the rate to go into a correction with the maximum possible target in the area of key resistance at 1.3387–1.3353.

Resistance levels: 1.32, 1.34, 1.351.
Support levels: 1.2905, 1.272.​

 

[SOLIDECN]

Aussie Falls as Sentiment Improves​

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The AUDUSD pair was down 0.7% today as US yields advanced to new cycle highs, strengthening the USD against some of its counterparts.
The Australian dollar has behaved rather strangely during the Russia-Ukraine war as it rallied on lousy news and declined on good news. Usually, it's the other way around with the Aussie - it tends to strengthen on positive news and decline on negative news.

Nevertheless, the AUDUSD pair has failed to stay above the 200-day moving average (the green line) as the Fed is about to start raising rates this week. And because inflation seems unstoppable, the central bank will likely increase the pace of rate increases throughout the rest of the year.

Therefore, the next support could be at the 50-day moving average (the purple line) at around 0.72, and if the Aussie breaks below it, further declines toward 0.71 could occur.

The MACD indicator is about to send a bearish signal on the daily chart, likely supporting the bearish bias in the following days.

Alternatively, the resistance for the near future is at 0.73, where previous highs are converged with the 200-day average. Once the Aussie jumps above that level, it might continue higher toward March highs at 0.7445.​

 

[SOLIDECN]

USDJPY, US dollar hits highs since 2017​

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The US dollar is developing an upward impetus against the Japanese yen in Asian trading, renewing record highs since January 2017.

Noticeable support for the instrument is provided by the meeting of the US Fed scheduled for Wednesday, within which a cycle of raising interest rates is likely to begin. Tomorrow, the rate could be adjusted by more than 25 basis points. US inflation reached a new 40-year high in February, with the CPI up from 0.6% to 0.8% on a monthly basis and from 7.5% to 7.9% on an annualized basis, according to data released last week. The increase in oil prices to the peak values of 2008 also contributes to the negative dynamics, which in the future will lead to a reduction in household spending on other goods.

The Bank of Japan in this sense is far behind not only the US Federal Reserve, but also the European Central Bank (ECB), preferring to refrain from reducing economic stimulus and believing that tightening monetary policy in the current environment can do more harm to the economy than good, which has significant pressure on the positions of the Japanese currency. However, the issue of inflation in the country is not so acute, and therefore the policy of the regulator is quite expected and sufficiently transparent.

Tomorrow, investors expect the publication of February data on the dynamics of Imports and Exports, as well as January statistics on Industrial Production from Japan. Export forecasts are quite optimistic and suggest a sharp rise of 21% in February after rising only 9.6% in the previous month. Imports over the same period may slow down from 39.6% to 28%, which should favorably affect the dynamics of the trade balance.

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

Resistance levels: 118.43, 119, 119.5, 120.
Support levels: 118.00, 117.50, 117.00, 116.6.​

 

[SOLIDECN]

Gold prices are actively corrected​

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Gold prices are developing a corrective downtrend during the morning session, updating local lows from March 4 and rapidly retreating from their record highs, the growth to which was provoked by Russia's special military operation in Ukraine. Now, the demand for risky assets is gradually recovering, as traders are counting on significant progress in the negotiation process and some stabilization of the global economy if, after a truce is reached, part of the blocking sanctions against the Russian Federation are lifted.

In turn, the development of "bearish" trend in the asset is supported by the strengthening of the US dollar on the eve of the US Federal Reserve meeting scheduled for Wednesday. Current market forecasts suggest a 25 basis point hike in interest rates, marking the welcome start of a monetary policy adjustment cycle. In the latest commentary by the Chairman of the department, Jerome Powell, he mentioned multiple increases in rates this year, taking into account rising inflation, which, in turn, will become a catalyst for strengthening the national currency. At the same time, the yield on 10-year US Treasuries has already risen by 13 basis points, hitting a 32-month high, and the UK gold rate has corrected to its highest level since 2018.

As for macroeconomic statistics from China, it turned out to be positive: Retail Sales in February increased by 6.7% after rising by 1.7% in the previous month, while analysts had expected a 3.0% increase.

> Resistance levels: 1952, 1974, 2000, 2015.
> Support levels: 1918, 1900, 1877, 1860.​

 

[SOLIDECN]

Brent Crude Oil, quotes have renewed local lows​

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During the Asian session, Brent Crude Oil prices are falling, renewing local lows of the beginning of the month and testing the level of 99.00 for a breakdown. The instrument has lost 23% in value since March 7, after hitting a 14-year high at 139.13.

Investors are gradually returning to risk as the geopolitical situation somewhat stabilizes, but in general, the situation remains quite tense: Russian troops continue to conduct a special military operation on the territory of Ukraine for the third week already. Against this background, sanctions pressure on the Russian Federation from Western countries leads to increased risks for the global economy. Last week, the Russian authorities demanded from the United States guarantees that the economic restrictions imposed would not impede full-fledged trade, economic, and investment cooperation between Moscow and Tehran in the restoration of the agreement on the Iranian nuclear program. And yet, after a long period filled with exclusively negative reports, investors hope that significant progress will be made in the negotiations between the Russian and Ukrainian delegations.

The focus of the market is also on the decision of the US Federal Reserve on interest rates, which will be announced on Wednesday evening. Analysts forecast an increase of at least 25 basis points. Still, investors are also awaiting comments from the head of the regulator, Jerome Powell, who may announce specific steps and dates for adjusting monetary policy parameters to curb inflationary pressure in the country soon.

Also, traders monitor the further development of the coronavirus epidemic in China, the world's largest importer of crude oil and the second-largest consumer after the United States. So, the authorities decided to quarantine the city of Shenzhen amid an increase in the incidence of COVID-19 (60 cases of infection were detected). At the moment, all commercial organizations, except for food and fuel, are required to either suspend work or transfer employees to a remote mode.​

• Resistance levels: 102.8, 105, 108.18, 112.​
• Support levels: 100, 96, 93, 91.00.​

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[SOLIDECN]

URUSD Trades Within 1.10, Lacks Direction​

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The euro was half a percent stronger on Tuesday, but so far, the pair has shown no genuine interest to remain above 1.10 for some considerable time.

Earlier in the day, German ZEW surveys crashed brutally, with the economic sentiment falling to -39.3 in March, down from 54.3. The current situation gauge dropped from -8.1 to -21.4. The survey for the whole eurozone fell from 48.6 to -38.7. Additionally. the US PPI inflation jumped to 10% yearly in February, up from 9.7%, as expected. The monthly change decelerated slightly from 1% to 0.8%. The core PPI inflation ticked higher to 8.4% year-on-year.

The short-term uptrend line is currently near 1.095, but the overall situation could be viewed as a continuation pattern. Thus, if the pair drops below the trend line, we might see a further decline, targeting 1.09 and possibly the current cycle lows near 1.08.

On the upside, should the euro rise above 1.10, we might see another leg higher, targeting the 1.1040 zone, or possibly the current swing highs in the 1.11 region.

As long as the euro trades below 1.12, the medium and long-term outlooks seem bearish, implying further losses for the single currency.​

 

[SOLIDECN]

AUDUSD, the pair is under pressure from the development of the pandemic in China​

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The AUD/USD pair started the current week with a decrease and is currently trading around 0.7170. The Australian currency was under pressure from two negative factors: a new wave of the coronavirus pandemic in China and a wait-and-see position of the Reserve Bank of Australia (RBA) regarding the adjustment of national monetary policy parameters.

Investors fear a decline in industrial production in China due to the introduction of new restrictive measures and a reduction in demand for raw materials, including Australian coal. The industrial center of Shenzhen is already under quarantine, but the situation could worsen significantly since, according to experts, significant herd immunity has not yet been formed in the country. Today's positive Chinese data on industrial production (growth by 7.5%) and retail sales (growth by 6.7%) in China stopped the fall of the AUD/USD quotes, but the negative dynamics is likely to resume soon, as indicators do not yet take into account the impact of a new increase in the incidence. Investors were also disappointed by the minutes of the last meeting of the RBA. Officials have reaffirmed their wait-and-see attitude towards raising rates even in the Ukrainian crisis, which is pushing global inflation up. The country's financial authorities believe that it is still premature to say that inflation will remain in the corridor of 2–3%, and wage growth is still insufficient for drastic measures on the part of the department.

The position of the American currency also cannot be called stable. Bidders are ready for the first rate increase this week by 0.25% but what the next steps of the regulator will be is unknown. On the one hand, he must fight rising inflation. On the other hand, he is afraid to slow down the recovery of the economy, which remains vulnerable due to the current geopolitical crisis. The gradual correction of indicators will likely continue, but experts doubt these measures will lead to a serious slowdown in price growth.

Resistance levels: 0.7263, 0.7385, 0.7446.
Support levels: 0.7141, 0.7080, 0.7019.​

 

[SOLIDECN]

Silver, the price develops a strong "bearish" momentum​

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At the end of February, Russian President Vladimir Putin initiated a special military operation on the territory of Ukraine, after which large-scale anti-Russian sanctions were introduced, and in Europe, there was a record increase in gas and oil prices. Now the situation has somewhat stabilized: although the special operation continues, investors hope that soon Russian-Ukrainian negotiations will halt hostilities and decrease the degree of global geopolitical tension.

Additional pressure on the quotes of the instrument is exerted by the expectations of the decision of the US Federal Reserve on monetary policy issues. Interest rates are forecast to rise by 25 basis points today, kicking off a cycle of national monetary policy adjustments. A subsequent press conference by Regulator Chairman Jerome Powell is likely to raise the issue of the impact of the military conflict on the US economy.
Resistance levels: 25, 25.28, 25.58, 26
Support levels: 24.67, 24.37, 24, 23.6


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[SOLIDECN]

USDTRY, Turkish economy continues to suffer losses​

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The USDTRY pair is declining amid the aggravation of the geopolitical situation in Eastern Europe, currently trading at 14.646.

Although Turkey is taking active steps towards a possible settlement of the military conflict between Russia and Ukraine, acting as a mediator in the negotiation process, the country's economy continues to suffer losses. Yesterday, the head of the Turkish Association of Industrialists and Entrepreneurs, Simone Kaslowski, said that since the beginning of the conflict, the national economy has already lost more than $40B due to various restrictions. Recent macroeconomic data indirectly confirm it. Thus, the volume of retail sales decreased by 1.5%, and in annual terms, the growth of the indicator slowed down to 7.9% from 13.0% in the previous period. According to the official, inflation in the country will not fall below 60% by the end of the year.

The USD Index is holding at the same levels, around 98.800, amid expectations of the US Federal Reserve meeting, the results of which will be known today. Judging by the numerous statements by regulator officials, the interest rate will be increased by at least 25 basis points. It will not immediately impact inflation, which could act as a deterrent for the dollar. Investors will also be watching today for retail sales data, which is expected to rise 0.4% in February, which is rather subdued given January's 3.8% rise.

Resistance levels: 14.98, 16.58.
Support levels: 14, 12.73.​

 

[SOLIDECN]

GBPUSD Defends 1.30 Support​

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Sterling has managed to defend the critical 1.30 support and bounced higher today, strengthening nearly 0.5% during the US session.

On the macro data front, US retail sales came out weaker than expected, printing just 0.3% monthly for February, down from 4.9% previously. At the same time, the control group, used in GDP calculations, cratered to -1.2% from 6.7% in January. Finally, the ex-autos gauge decelerated from 4.4% to 0.2%.

On the other hand, yesterday's better than expected UK labor market data strengthened the Pound, which also benefited from optimism coming from Ukraine-Russia diplomatic talks. Later today, volatility will indeed be elevated as the FOMC decision looms, and the Fed is expected to hike rates for the first time since the Corona crisis.

As previously said, the key support is now at 1.30, and while the Cable trades above it, the short-term outlook seems cautiously bullish. Investors could be taking some profits from the recent decline, which has brought the pair into heavily oversold territory.

On the upside, the GBPUSD pair must jump above 1.32, which is the crucial short-term resistance. The overall sentiment could improve notably if that occurs, possibly pushing the Pound toward the 1.33 level.

We could see some sideways trading in the 1.32 - 1.30 region until then.​

 

[SOLIDECN]

EURUSD. consolidation near 1.1​

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The European currency shows mixed dynamics of trading against the US dollar during the Asian session, consolidating near 1.1 and local highs from March 10.

The day before, the instrument managed to demonstrate a fairly active growth, despite the publication of the decision of the US Fed on the planned increase in interest rates by 25 basis points for the first time since 2018. Committee members voted almost unanimously (8 people participating in the meeting voted for the increase), which launched the indicator adjustment cycle. In total, 6-7 increases of 0.25% each are expected this year. In addition, the regulator intends to start reducing its 8.9 trillion dollar balance sheet at one of the next meetings. It is worth noting that the "hawkish" rhetoric of the US financial authorities is aimed at curbing maximum inflation, which reached 7.9% in February on an annualized basis, showing the highest result in 40 years. The Chair of the US Federal Reserve, Jerome Powell, noted that the increase in the cost of energy and other goods against the backdrop of a special operation carried out by the Russian authorities in Ukraine will become an additional factor in increasing consumer prices in the short term and will exceed the target value of 2%. At the same time, it should be noted that the decision of the regulator provoked only a short-term growth of the dollar, since the traders have already managed to put this event into quotes.

In turn, the euro is supported by hopes for a peaceful resolution of the conflict between Russia and Ukraine. Traders are hoping for progress in the negotiation process, citing comments from officials from both countries as arguments.

Today, the focus of investors is on the February statistics on consumer prices in the euro area, as well as the speech of the President of the European Central Bank (ECB), Christine Lagarde.

Resistance levels: 1.1051, 1.11, 1.115, 1.1185.
Support levels: 1.1, 1.0957, 1.09, 1.086.​

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[SOLIDECN]

USDCHF, "bulls" failed to develop an upward momentum​

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The US dollar showed mixed dynamics against the Swiss franc during the morning session, consolidating near 0.9400. The day before, USD/CHF showed a sharp increase, having updated record highs since April 2021, but then the "bulls" began to quickly lose the initiative.

The reason for the emergence of positive dynamics was the outcome of the meeting of the US Federal Reserve, which raised the interest rate by 25 basis points. At the same time, the market put such growth into quotes a long time ago, and only a correction by 50 basis points could have contributed to a more active reaction. Instead, the regulator limited itself to reports about the imminent start of reducing its own balance sheet, which currently reaches almost 9 trillion dollars. The Chair of the US Federal Reserve, Jerome Powell, noted the impact of a special military operation in Ukraine, initiated by the Russian authorities, on the American economy, stressing that the current situation could significantly worsen logistics and complicate supply chains. Meanwhile, investors hope for a successful negotiation process between representatives of Russia and Ukraine, aimed at a ceasefire and the withdrawal of Russian troops from the territory of Ukraine.

The focus of traders today will be on a block of statistics on imports and exports in Switzerland in February. In addition, the publication of consumer prices in the eurozone for February is expected, as well as a meeting of the Bank of England, at which the rate may be increased for the third time in a row.

Resistance levels: 0.943, 0.9459, 0.95.
Support levels: 0.9372, 0.9341, 0.93, 0.9271.​

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[SOLIDECN]

USDCAD, the US dollar has returned to decline​

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During the Asian session, the USDCAD pair shows ambiguous trading dynamics, consolidating near the level of 1.268 and local lows of March 3.

Yesterday, the instrument declined, despite the publication of the US Federal Reserve meeting minutes. As expected, the US regulator raised interest rates by 25 basis points to 0.5% and also signaled the possibility of starting to reduce its balance sheet of almost $9T at one of the next meetings. When exactly this will be done, the head of the regulator, Jerome Powell, did not say. He noted that the consequences of the military conflict in Ukraine would have consequences for both the world and the national economy, but it is difficult to predict them. The agency has launched a cycle of monetary tightening, which should cover 6 or 7 rate hikes in 2022. According to the authorities' forecasts, it will contribute to a sharp decrease in inflation as early as next year, although now the figure is significantly higher than the target of 2%.

In turn, strong national macroeconomic statistics published on Wednesday provided significant support to the Canadian dollar. February's core consumer price index rose by 0.8%, which was better than market expectations of 0.6%. Inflation accelerated from 4.3% to 4.8% YoY, ahead of analysts' forecasts of 4.5%. The overall annual rate rose from 5.1% to 5.7%. In January, the growth of wholesale sales accelerated from 1% to 4.2%, while the forecast was 3.9%.

Resistance levels: 1.27, 1.275, 1.2788, 1.2812.
Support levels: 1.265, 1.26, 1.2558, 1.25.​

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