Solid ECN | Professional Market Analysis | *Video*

[SOLIDECN]

European currency shows moderate growth against the US dollar in the Asian session, recovering after the "bearish" start of the week and retreating from the local lows of April 14, updated the day before. The growth of the instrument is primarily driven by technical factors, while the news background changes slightly and still does not contribute to an increase in demand for risky assets.

Moreover, since the beginning of the week, no significant macroeconomic statistics have been received from Europe, while US Federal Reserve officials continue to stir up investor interest in the May meeting of the Fed. In particular, on Monday, the Chair of the St. Louis Fed, James Bullard, admitted the possibility of raising the interest rate immediately by 75 basis points in the near future, but noted that this is not a "baseline scenario". In addition to adjusting the rate, the regulator is also expected to launch a program of quantitative tightening.

Today, investors will pay attention to the statistics on the dynamics of Industrial Production and Trade Balance in the euro area in February. It is assumed that the pace of production will increase by 0.7% after the zero dynamics of the previous month, and in annual terms, the figure may rise by 1.5% after falling by 1.3%. However, given the sharp deterioration in the geopolitical situation in Eastern Europe at the end of February, it is likely that the relevance of these data will be in question.

Bollinger Bands on the daily chart show a moderate decline. The price range is narrowing, reflecting the emergence of mixed trading dynamics in the ultra-short term. MACD indicator is reversing upwards forming a new buy signal (the histogram is trying to consolidate above the signal line). Stochastic is showing similar dynamics, again trying to rebound upwards from the level of "20".

Resistance levels: 1.085, 1.09, 1.0957, 1.1 | Support levels: 1.0800, 1.0767, 1.0726, 1.069

 

[SOLIDECN]

The US dollar is recovering its position against the Japanese yen in Asian trading, correcting after a downtrend the day before, when the US currency showed a decrease in almost the entire spectrum of the market against the background of the rhetoric of the US Federal Reserve, which significantly corrected investors' expectations regarding a possible rate hike at the May meeting more than 0.50%.

San Francisco Fed President and FOMC member Mary Daly noted a correction in the federal funds rate to 2.5% by the end of the year, since a smooth transition to a neutral policy is the main priority of the regulator at the moment. The official stressed that the risks of uncertainty remain on the market caused by the development of the military conflict in Ukraine and the recorded outbreaks of COVID-19. In addition, traders drew attention to not the strongest statistics from the US on the dynamics of Existing Home Sales.

In turn, pressure on the yen was exerted by data from Japan. In March, Exports from the country slowed down from 19.1% to 14.7%, which turned out to be worse than analysts' forecasts at the level of 17.5%, while Imports for the same period decreased from 34.1% to 31.2%, while investors expected 28.9%. All this led to a trade deficit in March at -412.4 billion yen, which was significantly worse than the -100.8 billion yen forecast by analysts. Additional pressure on the position of the instrument was exerted by the Tertiary Industry Index of Japan, which fell by 1.3% in February after a decrease of 0.7% a month earlier.

A more "dovish" outcome of the Bank of Japan's meeting on April 28 and a further rise in US bond yields could see USD/JPY break out of its uptrend range and head back into correction.

Bollinger Bands on the daily chart show a steady increase. The price range expands, freeing a path to new record highs for the "bulls". MACD histogram preserves the uptrend and a buy signal (located above the signal line). Stochastic, having reacted to the emergence of corrective dynamics the day before, maintains a confident downward direction, signaling a strongly overbought US dollar in the ultra-short term.

Resistance levels: 128.62, 129.39, 130 | Support levels: 127.5, 127, 126.3, 125.6

 

[SOLIDECN]

The Australian dollar is showing mixed trading against the US dollar during the Asian session, holding near 0.7430. Since the opening of the daily session, the instrument has been trading mainly with the downtrend, but this still fits into the framework of a weak technical correction after active growth the day before. The Australian and New Zealand currencies rose significantly on Wednesday, reacting to the appearance of rather weak macroeconomic statistics from the US on the dynamics of Existing Home Sales.

As a result of March, Existing Home Sales fell again by 2.7% after a collapse of 8.6% a month earlier, which turned out to be much worse than analysts' forecasts. In addition, the quotes of AUD/USD were supported by statements by representatives of the US Federal Reserve, which weakened the hopes of investors for more active actions of the regulator aimed at tightening monetary policy in the country. The President of the Chicago Fed, Charles Evans, said that he adheres to a plan to raise the rate twice, by 0.50% each time. In turn, Fed spokesman Rafael Bostic, who is the President of the Fed of Atlanta, noted that raising the rate by more than 0.50% would be premature and could have negative consequences for the growth of the US economy.

In addition, the Reserve Bank of Australia (RBA) in the minutes of its April meeting indicated a "hawkish" position and gave a convincing hint to the market that the interest rate increase would occur earlier than expected, which contributed to the strengthening of AUD/USD in the middle of the week.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is reversing to growth forming a weak buy signal (located above the signal line). The indicator is also trying to recover above the zero level. Stochastic is showing more active growth and is already approaching its highs, signaling the risks of the Australian dollar being overbought in the ultra-short term.

Resistance levels: 0.7456, 0.75, 0.755, 0.76 | Support levels: 0.74, 0.7366, 0.7341, 0.73

 

[SOLIDECN]

Against the backdrop of the growth of the US dollar, the NZDUSD pair is correcting in a downtrend, trading near 0.6788.

Today's trading on the Wellington stock exchange began to decline after the New Zealand analytical company Stats NZ published March inflation data. Thus, the consumer price index added 1.8% MoM, much higher than 1.4% a month earlier. The annual value reached 6.9%, reflecting the highest growth in the last 30 years. The main driver of the current trend was not the situation in the energy market but the utility segment, which reacted to an increase in the cost of new homes by 18%, which happened for the first time since 1985. Also, gasoline prices rose by 32% compared to the same period last year.

The US currency continues to trade above the psychological level of 100 points in the USD Index, and its rate was not affected even by disappointing data on sales in the secondary housing market. After the increase in the number of building permits for the construction of new homes, the drop in the indicator was expected, and analysts included in the forecast a value of 5.80M, but the actual decrease was even larger and amounted to 5.77M, while sales in February reached 5.93M.

The asset moves within the local rising channel, being near the support line. Technical indicators maintain a stable sell signal: fast EMAs on the Alligator indicator are well below the signal line, and the AO oscillator histogram is trading deep in the sell zone.

Resistance levels: 0.6842, 0.6988 | Support levels: 0.6718, 0.6536​

 

[SOLIDECN]

The British pound has been actively declining this week, reaching the support level of 1.3000 under the pressure of pessimistic investor sentiment regarding the growth of the national economy amid unprecedented high inflation.

According to a Deloitte survey, a record number of UK managers expect operating costs to rise sharply this year as inflation has proved more resilient than expected, with a majority (98%) of respondents believing that the Bank of England will not be able to bounce back prices in the nearest future. The survey included 89 CFOs, 22 of whom were from FTSE-100 companies and 34 from FTSE-250 companies. The results of the study show negative sentiment in business circles, primarily due to disruptions in supply chains and energy supply, as well as high prices as a result of the closure of warehouses with products during the coronavirus pandemic. Against this background, the projected decline in GDP in Q2 2022 is likely to force the Bank of England to decide to raise interest rates as early as this summer.

This news has a negative impact on GBPUSD, which is trading in a long-term downtrend. The key support at the moment is at 1.3000, in case of a breakdown of which the quotes will continue to fall with the targets of 1.2870-1.2700. The nearest resistance level is at 1.3150, near which one can consider new sales.

The mid-term trend is downward. This week, market participants are trying to break through the target zone 2 (1.3060–1.3026). If they succeed, the decline will continue with the target in the area of the target zone 3 (1.2716–1.2682). The key resistance of the trend is shifting to the levels of 1.3351–1.3317.

Resistance levels: 1.3150, 1.3288, 1.34 | Support levels: 1.3, 1.287, 1.27

 

[SOLIDECN]

Since the beginning of this month, the EUR/USD pair has been declining, but during the week the price attempted an upward correction and is now trading around 1.0915. The pressure on the US currency was exerted by the latest comments of US Fed officials.

Earlier, the head of the Federal Reserve Bank of San Francisco, Mary Daly, spoke on the current situation. Like most representatives of the department, she advocated an early increase in the rate to a neutral level, but admitted that such actions by the US Fed could cause a moderate recession. Earlier this week, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, also expressed his fears of a sharp increase in rates. In general, the US economy looks confident due to the recovery of the labor market and the construction sector, but a serious disagreement within the regulator increases uncertainty in its further actions, which puts short-term pressure on the dollar.

Meanwhile, the eurozone economy continues to be under pressure from high inflation. Today, data on the consumer price index for March were released: on a monthly basis, the indicator increased from 0.9% to 2.4%, and on an annual basis – from 5.9% to 7.4%. Despite the fact that the statistics turned out to be somewhat lower than experts' expectations, the values are still at record high levels and require the intervention of the European Central Bank. At the same time, the regulator's officials continue to take a wait-and-see attitude, not risking starting to raise rates in the face of uncertainty due to the Ukrainian crisis.

Now the price is at the middle line of the Bollinger Bands in the area of 1.0915. Consolidation above it will give the prospect of growth to 1.0986 (Murray [2/8]) and 1.1108 (Murray [3/8]). Otherwise, the price will return to the levels of 1.0742 (Murray [0/8]) and 1.0620 (Murray [-1/8]). Technical indicators do not give a single signal: the Bollinger Bands are directed downwards, but the MACD histogram is shrinking in the negative zone, and the Stochastic is directed upwards.

Resistance levels: 1.0915, 1.0986, 1.1108 | Support levels: 1.0864, 1.0742, 1.0620​

 

[SOLIDECN]

The New Zealand dollar shows an active decrease against the US dollar during the Asian session, developing a strong "bearish" momentum that formed the day before. NZDUSD is testing 0.67 for a breakdown and updating local lows from February 28. The pressure on the instrument is again exerted by the growing US dollar, which is supported by the expectations of an early tightening of the monetary policy of the US Fed. The regulator expects to raise the interest rate immediately by 50 basis points already during its May meeting. In addition, the Fed is likely to launch a quantitative tightening program that will help reduce its balance sheet.

Additional pressure on the NZ dollar is exerted by the macroeconomic statistics from New Zealand released yesterday. The Consumer Price Index in Q1 2022 accelerated from 1.4% to 1.8%, which turned out to be only 0.2% worse than market expectations. In annual terms, inflation reached a new record high of 6.9%, although analysts had projected an increase to 7.1%.

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting the emergence of multidirectional trading dynamics in the short term. MACD reversed downwards having formed a new sell signal (located below the signal line). Stochastic, which made an attempt to grow a few days ago, is again reversing into a horizontal plane, reacting to a surge of "bearish" activity. It is necessary to wait for the trade signals from technical indicators to become clear.

Resistance levels: 0.677, 0.6812, 0.6874, 0.6924 | Support levels: 0.67, 0.665, 0.66, 0.6568

 

[SOLIDECN]

The euro's fall continues against the backdrop of approaching the next meeting of the US Federal Reserve on May 4, at which the regulator is likely to raise interest rates by 25–50 basis points. Only 0.2% of experts believe that monetary policy will not change. The US dollar is likely to strengthen against all major currencies in the long term. By raising the rate, the regulator hopes to bring inflation under control: according to the latest data, the consumer price index in the US reached a record high in 40 years – 8.5%.

Inflation in the EU is not far behind at 7.4%, but the European Central Bank is in no hurry to tighten monetary policy. So far, all that is known is that in the second half of 2022, the curtailment of the bond redemption program may begin, and only then the agency will consider raising the rate. Until the ECB takes decisive action and until the end of the military conflict in Ukraine, the euro is likely to decline against the US dollar.

The long-term trend is downwards. After the price consolidates below 1.085, the decline continues to the 2020 low at 1.0650. The nearest resistance, from which one can consider selling, is 1.085.

The medium-term trend is down. This week, market participants are trying to break through target zone 2 (1.08–1.0781). The next sell target will be zone 3 (1.0608–1.0589) if they succeed. The key resistance of the trend is shifting to the levels (1.0968–1.0949).

Resistance levels: 1.085, 1.117 | Support levels: 1.065, 1.05

 

[SOLIDECN]

AUDUSD, is trading in a downtrend amid a significant decline in the Australian currency, being at around 0.7343.

The Australian currency continues to decline in tandem with the US dollar against the background of the lack of positive dynamics of macroeconomic indicators. According to preliminary data, the Manufacturing PMI in April may reach 57.9 points, which is slightly higher than 57.7 points in March. The Services PMI may rise to 56.6 points from 55.6 points a month earlier.

In turn, the US currency continues to hold in an uptrend, being above 100.000 in the USD Index. The day before, the Chair of the US Fed, Jerome Powell, made a speech during which he indirectly blamed Russia's actions on the territory of Ukraine for the increase in inflation and noted that now the conflict in Eastern Europe is exerting slight pressure on the US economy, but soon it may intensify, and inflation may increase even more. In the local perspective, this will support the US currency, but globally, the growth of the dollar will soon end.

On the global chart of the asset, the price is trading within a broad upward channel, approaching the support line. Technical indicators have already reversed and issued an updated sell signal: the range of the Alligator indicator EMAs fluctuations is expanding in the direction of decline, and the histogram of the AO oscillator forms descending bars.

Support levels: 0.7285, 0.7 | Resistance levels: 0.745, 0.76​

 

[SOLIDECN]

The Australian dollar shows a steady decline during the morning session, updating local lows from February 28. The instrument has been developing a downtrend since last Thursday, when the Fed Chairman Jerome Powell once again announced the need to raise interest rates by 0.50% at once at the May meeting. In addition, the regulator may launch a quantitative tightening program, which its representatives have also often spoken about recently. Investors took the official's speech as an additional signal to reduce risky positions, which provoked a noticeable strengthening of the US currency.

The macroeconomic statistics released on Friday from Australia failed to slow down the development of the "bearish" dynamics for the instrument, despite the fact that the data turned out to be quite positive in general. The Commonwealth Bank Manufacturing PMI in April rose from 57.7 to 57.9 points, while analysts had expected growth to only 57.8 points. The Services PMI for the same period strengthened from 55.6 to 56.6 points, but the market expected a much more noticeable increase to 58.5 points. At the same time, the Composite PMI rose from 55.1 to 56.2 in April.

In addition, China recorded the highest daily death rate of the population from COVID-19 this year, and the record for the incidence in Shanghai was 21K people. The city authorities announced a new round of quarantine measures last week, including daily testing of citizens for coronavirus. China remains one of the few countries that have adopted a "zero tolerance" policy, imposing mandatory quarantine for those who come into contact with infected citizens in order to contain the spread of the disease.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is expanding, but at the moment it is not keeping up with the surge of "bearish" sentiment. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic retains a steady downtrend but is located in close proximity to its lows, which indicates the risks of oversold AUD in the ultra-short term.

Resistance levels: 0.72, 0.725, 0.73, 0.7341 | Support levels: 0.715, 0.71, 0.705, 0.7

 

[SOLIDECN]

During the Asian session, the USDCHF pair is actively growing, testing the level of 0.9580 for a breakout and holding near the record highs of June 2020, renewed at the end of last week after the speech of the head of the US Federal Reserve, Jerome Powell.

The regulator chairman confirmed his intention to start an aggressive adjustment of the monetary policy parameters and raise the interest rate by 50 basis points at the next meeting in May to combat the inflation rate, which has been a record for 40 years. Also, the agency is likely to launch a quantitative easing program, which will allow it to reduce its balance sheet, which currently stands at about 9T dollars, mainly consisting of Treasuries and mortgage-backed securities.

Against the backdrop of rising buying sentiment, the US currency ignored the national macroeconomic data on Friday. The PMI Markit index in the manufacturing sector in April rose from 58.8 to 59.7 points, while analysts expected a slight decline to 58.2 points. In turn, the business activity index in the service sector for the same period fell from 58 to 54.7 points with neutral market forecasts. The composite business activity index corrected from 57.7 to 55.1 points, which was noticeably worse than analysts' expectations of 58.1 points.

On the daily chart, Bollinger Bands are steadily growing: the price range is expanding, letting the "bulls" renew the highs. The MACD indicator grows, keeping a strong buy signal (the histogram is above the signal line). Stochastic also maintains an upward direction but is near its highs, signaling that the dollar may become overbought in the ultra-short term.

Resistance levels: 0.96, 0.965, 0.97, 0.975 | Support levels: 0.9535, 0.95, 0.9459, 0.94

 

[SOLIDECN]

The European currency shows a moderate decline against the US dollar during the Asian session, building on the "bearish" momentum formed at the end of last week, when the euro retreated from its local highs from April 7. The pressure on the instrument is exerted by the previous factors of a gradually strengthening dollar against the backdrop of deterioration in global economic prospects.

The military conflict in Ukraine is intensifying, despite the unprecedented sanctions imposed on the Russian economy by Western countries. Meanwhile, the EU is preparing another, sixth in a row, package of sanctions, which will likely be announced on April 25-29 and will significantly reduce the possibility of energy supplies from Russia. The issue of oil and gas imports for European countries is still extremely painful. Nevertheless, quite clear trends have been identified, and, not without pressure from the White House administration, the EU is gradually reducing its energy dependence on Russian resources, which, in turn, leads to an upward correction in energy prices, simultaneously pushing up the already high inflation in the region.

The macroeconomic statistics from Europe published last Friday did not have a noticeable impact on the dynamics of the instrument, despite the fact that the data, in general, was not disappointing. The eurozone Composite Manufacturing PMI rose from 54.9 to 55.8 in April, beating its forecast of a decline to 53.9. The Services PMI for the same period strengthened from 55.6 to 57.7 points, contrary to forecasts of a decline to 55 points.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is expanding reluctantly, making way to new local lows for the "bears". MACD reversed downwards having formed a new sell signal (located below the signal line). Stochastic, having made an attempt to grow last week reversed downwards again and is testing the border of the oversold area.

Resistance levels: 1.08, 1.085, 1.09, 1.0957 | Support levels: 1.075, 1.07, 1.0634, 1.06

 

[SOLIDECN]

The US dollar is developing flat trading dynamics in tandem with the yen during the Asian session, consolidating near 128. The development of the uptrend stopped last week, when USDJPY made new record highs, and the market plunged into a correction.

Meanwhile, demand for the US currency is increasing in anticipation of a more aggressive approach to tightening monetary policy parameters by the US Federal Reserve, pushing buyers to open new deals, while the Bank of Japan is only cautious about the risks of rising inflation in the country. The latter, however, does not frighten Japanese investors at all, who are accustomed to the deflationary characteristics of the national economy. The Bank of Japan is likely to keep its rate unchanged at -0.10% at its meeting on Thursday and refrain from major adjustments in its forecasts for further actions, as rising commodity prices force it to focus on maintaining the economic recovery after the coronavirus pandemic. Thus, in a broader sense, the Japanese yen is currently experiencing a "bullish" pullback after a consistent decline due to the regulator's ultra-loose monetary policy.

Macroeconomic statistics from Japan, released the day before, turned out to be restrainedly optimistic: the Coincident Index in February rose from 96.3 to 96.8 points, which turned out to be better than the negative forecasts of analysts for a decline to 95.5 points. The Leading Economic Index for the same period fell from 101.2 to 100.0 points, while the market expected 100.9 points. The Unemployment Rate in the country in March also corrected down from 2.7% to 2.6%.

Bollinger Bands on the daily chart show a steady increase. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down having formed a new sell signal (located below the signal line). Stochastic maintains a confident downtrend, being approximately in the center of its area.

Technical indicators do not contradict the development of the correctional decline in the short and/or ultra-short term.

Resistance levels: 128.62, 129.39, 130, 131 | Support levels: 127.5, 127, 126.3, 125.6

 

[SOLIDECN]

The American currency is moderately declining, retreating from the local highs of March 16, updated the day before. Investors attribute the development of "bearish" trend to the emergence of technical factors, while the fundamental background changes slightly and still contributes to the strengthening of the US dollar.

In particular, traders are concerned about the prospects for the recovery of the global economy against the backdrop of further escalation of the conflict in Ukraine, which is the cause of the crisis in the commodity areas. In addition, there are reports from Beijing of a rapid increase in the incidence of coronavirus infection among the local population. Recently a large-scale lockdown ended in Shanghai, and now a similar prospect seems to threaten the capital of China. Over the past day, about 22K cases of COVID-19 were detected in the country, and more than 21K infected occurred in Shanghai. Further tightening of coronavirus restrictions could lead to a decline in energy consumption in the Chinese economy.

Canadian macroeconomic statistics released late last week put moderate pressure on the positions of the Canadian currency, reflecting the expected slowdown in economic activity in the country. First of all, investors drew attention to a sharp slowdown in Retail Sales in February from 3.3% to 0.1%, while analysts had expected a decline of 0.1%. At the same time, Retail Sales excluding Automobiles over the same period slowed down only from 2.9% to 2.1%, while forecasts assumed zero dynamics.

Bollinger Bands in D1 chart show moderate growth. The price range expands, freeing a path to new local highs for the "bulls". MACD is growing, maintaining a relatively strong buy signal, being located above the signal line. Stochastic, having approached the level of "100", reversed into the horizontal plane, indicating risks of strongly overbought USD in the ultra-short term.

Resistance levels: 1.2750, 1.28, 1.2850, 1.29 | Support levels: 1.27, 1.265, 1.2600, 1.2538

 

[SOLIDECN]

Quotes of USDJPY fell to a weekly low the day before, but today the yen is trying to regain its positions, despite the fact that the observed correction is largely associated with a slowdown in the growth of the US currency. Now the instrument is trading around 127.7.

Macroeconomic statistics from Japan turned out to be positive and supported the quotes of the national currency. The Unemployment Rate in the country in March fell to 2.6% from 2.7% a month earlier, despite the fact that analysts did not expect changes in the indicator. In turn, the Jobs / Applicants Ratio rose to 1.22 from the February value of 1.21, which coincided with analysts' forecasts. Also noteworthy is the Core CPI from the Bank of Japan, which stood at 1.1% in March, slightly up from 1.0% in the previous month. Investors are waiting for the results of the meeting of the Japanese monetary policy regulator, which will be held tomorrow. Prime Minister Fumio Kishida has already called for keeping the current monetary policy parameters and not raising interest rates to prevent a rapid fall in the yen.

In turn, the US dollar is holding at its highs, having exceeded the level of 102.000 in the USD Index the day before against the backdrop of disappointing data on the Conference Board Consumer Confidence Index for April, which fell to 107.3 points, despite preliminary estimates of 108.0 points. In addition, New Home Sales also corrected downward in March from 835K to 763K.

The instrument is trading in a global uptrend, correcting within the local Flag pattern. Technical indicators hold a steady buy signal, which is working out a slight correction: the range of EMA fluctuations on the Alligator indicator is expanding, and the histogram of the AO oscillator is high in the purchase zone.

Support levels: 126.94, 123.77 | Resistance levels: 128.96, 133​

 

[SOLIDECN]

Today, the EURUSD pair renewed the 2020 low at 1.065, falling under the pressure of escalating the military conflict in Ukraine.

The decision of Russian President Vladimir Putin to sell natural gas to "unfriendly" countries for rubles is forcing European officials to refuse supplies and look for an alternative, more expensive options, which leads to inflation rising to a record high of 7.4% YoY. Analysts suggest that the negative trend will continue, and in April, the figure will reach 7.5%. Also, German Economic Minister Robert Habeck said on Tuesday that the country can now stop importing Russian oil, and Poland is ready to help it search for new suppliers, which has already indicated its position on refusing to renew existing contracts. Authorities hope to find alternatives in the coming days, the official said.

Against the backdrop of high inflation, the European Central Bank (ECB) is forced to adjust the current parameters of monetary policy. There are no official statements about the upcoming interest rate hike, however, according to analysts at Goldman Sachs Group, the regulator may adjust the rate by 25 basis points in July, and by 2023 the value will reach 1.25%. If ECB officials confirm this information, we can expect the EUR/USD pair to strengthen, and until then, the instrument is waiting for trading in a downtrend.

The US dollar is rising ahead of the US Federal Reserve's interest rate decision on May 4th. It is expected that it will rise by 0.5% to 1%, which will help fight against high inflation.

The long-term trend is downward. Today, the asset has reached the support level of 1.0650, and after its breakdown, it may drop to 1.05, 1.035.

As part of the medium-term downtrend, the price reached the target zone 3 (1.0608 - 1.0589), after the breakdown of which the fall will continue with the target around zone 4 (1.0416 - 1.0397). Otherwise, we can expect a correction to the area of the key trend resistance 1.0799 - 1.078.

Resistance levels: 1.0850, 1.117 | Support levels: 1.065, 1.05

 

[SOLIDECN]

The euro is actively losing value in tandem with the US currency, dropping to its lowest level since 2017 against the backdrop of investors redirecting capital from risky assets to "protective" ones. Traders fear a slowdown in global economic growth and acceleration of inflation, and also hope for decisive steps to adjust monetary policy by the US Federal Reserve. In the event of an increase in the interest rate immediately by 0.50%, the US dollar will receive support, and experts believe that the US economy will be able to cope with geopolitical challenges better than the European one. Now the quotes of EURUSD are trading around 1.0502.

After the refusal of countries "unfriendly" to Russia to adhere to the new scheme of paying for energy resources in rubles, the day before, the PJSC Gazprom announced the termination of gas supplies to Poland and Bulgaria. Against this background, the exchange price of gas soared by 16% and rose above 1.35K dollars per thousand cubic meters. A number of countries have already recognized this step as a violation of the terms of the contract, but assured the population that in case of force majeure, fallback options have long been provided. European Commission President Ursula von der Leyen noted the unreliability of Russia as an energy supplier, saying that Poland and Bulgaria will now receive "blue fuel" from other countries, but she did not specify the cost of these supplies. In addition, eurozone macroeconomic indicators continue to deteriorate. The German Gfk Consumer Confidence Survey fell to -26.5 points from -15.7 points a month earlier, and the French Consumer Confidence Index fell from 90 to 88 points.

The American currency, on the contrary, continues to rise and yesterday reached its highs over the past six years, having consolidated above 103.000 in the USD Index. The dynamics of the dollar cannot be pressured even by the deterioration in the borrowing market, where for the seventh month in a row the growth of the rate on 30-year mortgage loans has continued. The day before, the indicator reached 5.37%, up from 5.20%, which once again leads to higher cost of loans for those wishing to purchase housing in the United States.

EURUSD continues to trade within a wide downward channel, coming close to the support line. Technical indicators maintain the global sell signal: the fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator continues to decline in the sell zone, forming descending bars.

Support levels: 1.0432, 1.005 | Resistance levels: 1.0636, 1.112​

 

[SOLIDECN]

Quotes of EUR/USD are trading at the lowest levels since 2017 around 1.0520. The downtrend in the asset is intensifying against the backdrop of the negative impact of the possible consequences of the previously adopted anti-Russian sanctions, and, in particular, the ban on the import of raw materials and fertilizers. After the refusal of countries "unfriendly" to Russia to adhere to the new scheme of paying for energy resources in rubles, the PJSC Gazprom announced the termination of gas supplies to Poland and Bulgaria. Meanwhile, the German authorities showed solidarity on the issue of a complete ban on the purchase of Russian fuel, noting the need for a gradual transition to the use of alternative sources. Thus, the country withdrew its objections to a complete embargo on the supply of "black gold" from the Russian Federation and joined the rest of the EU members in this matter.

In the meantime, inflationary pressures in Germany and in the euro area as a whole continue to grow, which is reflected in macroeconomic indicators. German Consumer Price Index in April year on year reached 7.4% for the first time since 1974, rising from 7.3% a month earlier and yielding to analysts' forecast at 7.2%, while Italian Consumer Confidence Index corrected to 100.0 points from 100.8 points. The Consumer Price Index in Spain showed a downtrend and reached 8.4% after 9.8% shown in the previous period; however, despite the decline in inflation, Unemployment Rate in the country is fixed at a high level: 13.65% against 13.33%, shown in March.

In turn, the US currency could not ignore the negative fundamental background and came under pressure from weak data on the labor market, after which it began a downward correction, dropping from 103.700 to 103.400 in the USD Index. Thus, according to statistics, the Continuing Jobless Claims amounted to 1.408 million, exceeding the projected 1.403 million. Another increase in the Core Personal Consumption Expenditures index should also be noted: the value in Q1 increased to 5.20% from 5.00%.

The instrument is trading below the support line of the wide descending channel, which the price crossed the day before. Technical indicators maintain the global sell signal: the fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator continues to decline in the sell zone, forming descending bars.

Support levels: 1.0470, 1.0170 | Resistance levels: 1.0760, 1.1170​

 

[SOLIDECN]

The Australian currency is declining against the US dollar amid historically strong Consumer Price Data in Q1 2022. Now AUDUSD is trading in a downtrend, at around 0.7155.

The country's inflation rate reached 5.1% for the first time in more than 20 years, adding 2.1% for the current quarter and demonstrating the highest growth rate on record, while the Export Price Index rose from 3.5% to 18.0%. Investors are looking forward to the Reserve Bank of Australia meeting scheduled for May 3, during which, as predicted, the interest rate could be increased by 15 basis points to 0.25%, in which case the pre-election position of Prime Minister Scott Morrison could seriously deteriorate. Even now, in addition to ordinary citizens, Australian officials are also expressing their dissatisfaction with his policies. The day before, the candidate for Finance Minister from the Labor Party, Jim Chalmers, accused the Prime Minister of rising prices and falling living standards. He noted that the current price increase is only the beginning, and major financial shocks await citizens ahead.

On the daily chart, the price is within the Expanding Formation pattern, approaching the support line. Technical indicators continue holding a steady sell signal: the range of the Alligator indicator EMAs fluctuations is expanding in the direction of decline, and the histogram of the AO oscillator forms descending bars.

Support levels: 0.7087, 0.6965 | Resistance levels: 0.7280, 0.757​

 

[SOLIDECN]

USDCHF, D1
On the daily chart, the price continues its active growth, which began in April. Last week, the trading instrument reached its highest values since May 2020 at the level of 0.9758, if it is broken out, the uptrend may continue; however, at present, the development of a downward correction of quotations to the area of 0.9572 (retracement of 23.6%), 0.9533 (extension of 100.0%, Ascending Fan line of 38.2%) is not excluded. In general, the potential for strengthening USD/CHF is quite high, which is signaled by the upward reversal of Bollinger Bands and the increase in the MACD histogram in the positive zone, but Stochastic is reversing downwards in the overbought zone and may leave it, having formed a sell signal.

USDCHF, W1
On the weekly chart, the price is actively breaking through the Opposite Descending Fan and is currently testing the level of 0.9670 (retracement of 61.8%), but has not consolidated above it yet. If successful, the growth of the trading instrument may continue to the levels of 0.9900 (the area of March 2020 highs) and 1.0192 (retracement of 100.0%). Otherwise, a corrective decline to the levels of 0.9510 (retracement of 50.0%) and 0.9350 (retracement of 38.2%) is possible. The uptrend in the asset continues, which is signaled by an upward reversal of Bollinger Bands and Stochastic, as well as an increase in the MACD histogram in the positive zone; however, the price chart leaving the upper Bollinger Band does not exclude a downward correction.

In the near future, a downward correction to the levels of 0.9572 (retracement of 23.6%, D1) and 0.9510 (retracement of 50.0%, W1) is possible. If the price consolidates above 0.9758 (the Opposite Descending Fan line of 61.8%, W1), USDCHF will probably continue to strengthen towards 0.99 (the March 2020 highs area) and 1.0192 (retracement of 100.0%, W1).

Resistance levels: 0.9758, 0.99, 1.0192 | Support levels: 0.967, 0.9572, 0.951​