Forex, Commodities, Crypto Market Analysis by Solid ECN

SOLIDECN · April 7, 2022, 3:06pm

Current trend

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.

Support and resistance

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

SOLIDECN · April 8, 2022, 9:54am

Current Trend

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%.

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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SOLIDECN · April 8, 2022, 4:16pm

The US dollar is showing weak “bearish” dynamics during the Asian session, correcting after a three-day rally that took the instrument to new highs from March 22. Sales of the Canadian currency this week intensified after a local decline in oil prices.

However, according to data for February, exports of Canadian “black gold” increased by 7.8%, amounting to 58.75 billion Canadian dollars, while imports were fixed at around 56.08 billion Canadian dollars, which indicates the continuation of the trade surplus. The growing geopolitical tension will continue to contribute to an increase in energy prices against the backdrop of a continuing shortage of supply, which will allow the Canadian dollar to regain the interest of the “bulls”.

Today, investors are focused on the March report on the Canadian labor market. Analysts’ forecasts are quite modest, and therefore the national currency is unlikely to receive significant support from the publication. It is assumed that the Net Change in Employment in March will show an increase of only 80K, slowing down from the previous increase of 336.6K. At the same time, the Participation Rate is expected to remain at the same level of 65.4%, while the Unemployment Rate may drop from 5.5% to 5.4%.

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic shows a similar dynamics but the indicator line is approaching its highs, which reflects risks of the overbought USD in the ultra-short term.

Resistance levels: 1.26, 1.265, 1.27, 1.275 | Support levels: 1.2538, 1.245, 1.24, 1.235

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SOLIDECN · April 11, 2022, 9:00am

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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SOLIDECN · April 11, 2022, 2:54pm

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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SOLIDECN · April 12, 2022, 9:06am

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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SOLIDECN · April 12, 2022, 12:59pm

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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SOLIDECN · April 12, 2022, 3:14pm

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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SOLIDECN · April 13, 2022, 9:36am

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.

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

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SOLIDECN · April 13, 2022, 2:45pm

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

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SOLIDECN · April 14, 2022, 9:23am

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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SOLIDECN · April 15, 2022, 8:26am

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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SOLIDECN · April 15, 2022, 1:59pm

The New Zealand dollar is moderately declining against the US currency during the morning session, testing the level of 0.6770 for a breakdown. NZDUSD develops a “bearish” momentum and returns to the local lows of March 16, updated last Wednesday, which became the most volatile day of the week.

On April 13, the Reserve Bank of New Zealand (RBNZ) raised interest rates by 50 basis points at once from 1% to 1.50%. The indicator was adjusted for the fourth time in a row, but each time the regulator raised it by only 0.25%. In a follow-up statement, the officials noted that such a move is designed to provide additional flexibility in economic policy in the face of high geopolitical uncertainty, as well as to curb high inflation and the cost of living, which is one of the key problems for world economies today. Note that consumer prices in New Zealand rose by almost 6% with while the target range of the RBNZ of 1–3%.

The macroeconomic statistics released the day before managed to provide only little support to the instrument: Business NZ PMI rose from 53.6 to 53.8 points in March, while analysts had expected a more modest value of 53.7 points.

Meanwhile, New Zealand is gradually opening its borders to tourists. Thus, fully vaccinated residents of neighboring Australia will be able to visit the country without having to go through quarantine. Travelers from other visa-free countries will be allowed to enter New Zealand from May 2.

On the daily chart, Bollinger Bands are declining rather actively. The price range is expanding; however, it fails to catch the development of “bearish” sentiments. MACD is preserving a stable sell signal (located below the signal line). Stochastic is still located near its lows, signaling a strongly oversold NZD in the ultra-short term.

Resistance levels: 0.6812, 0.6874, 0.6924, 0.696 | Support levels: 0.6732, 0.67, 0.665, 0.66

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SOLIDECN · April 18, 2022, 10:30am

USDJPY, the US dollar updates record highs

The US dollar shows a moderate growth in Asian trading, renewing new record highs and approaching 127.00, but there are no drivers for its breakout yet. Last week, April 13, the yen reached its lowest level against the US currency since 2002, losing about 40% in value compared to the 2011 high.

Investors are returning to the market after the Easter week and are still inclined to buy safer assets, given that the fundamental background does not contain positive signals. The greatest support for currencies at the moment comes from the actions of world central banks, which are rapidly adjusting the current monetary policy in the hope of containing record inflation rates. In particular, it is expected that during the May meeting, the US Federal Reserve will announce an increase in interest rates by 50 basis points at once, and will also launch a quantitative tightening program.

Meanwhile, the ultra-soft monetary policy of the Bank of Japan against the backdrop of relatively low inflation in the country keeps the national currency in a weaker position. The regulator is expected to raise its inflation forecast for fiscal year 2022 to above 1.5% from the current 1.1%, while national economy growth expectations will be lowered from 3.8%. Statistics on inflation in Japan will be published on Friday. It is predicted that by the end of March, the national Consumer Price Index may accelerate from 0.9% to 1.3%.

Along with this, the Bank of Japan is exploring the possibility of launching its own digital currency (CBDC). Bank of Japan Chief Executive Shinichi Uchida said financiers will look at features to set a limit on the amount of transactions as a safeguard against unpredictable movement of deposits from financial institutions, as well as the possibility of rewarding token holders. At the same time, it is emphasized that the digital yen will not be used to achieve a negative interest rate.

Bollinger Bands on the daily chart show a steady increase. The price range expands slightly from above, freeing a path to new record highs for the “bulls”. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic has been near its highs for a long time, indicating the risks of the US dollar being overbought in the ultra-short term.

Resistance levels: 127, 127.5, 128 | Support levels: 126.3, 125.6, 125.09, 124.5

SOLIDECN · April 19, 2022, 8:26am

The British pound is falling during the morning session, testing the strong support at 1.3 for a breakdown. GBPUSD updates local lows from April 13, when the asset showed a sharp increase.

The US currency is supported by expectations of further tightening of monetary policy by the US Federal Reserve and an increase in the key rate by 50 basis points at once during the May meeting of the regulator. In addition, investors are still reluctant to redirect their capital into risky assets, fearing a further deterioration in the global economy. Despite the unprecedented sanctions against Russia, the special military operation on the territory of Ukraine continues, and at the moment the peace talks have faded into the background. The parties, apparently, hope to take more advantageous positions in the negotiation process, having shown success at the front.

Meanwhile, Western countries continue to introduce more and more restrictive measures. In the near future, EU officials will discuss the sixth sanctions package, which may relate to the most painful issue, restrictions on the import of oil and oil products. In the EU, there is still no consensus on the embargo on Russian supplies, due to the significant dependence on imported energy resources, but the general trend towards a gradual phase-out is still emerging. According to the forecasts of the operator of the united British energy system National Grid, the UK is ready to send significant volumes of natural gas to European countries in order to minimize their losses after the imposition of sanctions, using its terminals and the national system of gas transportation. Summer exports are expected to reach 5.1 bcm, well above the 2021 figure of 0.7 bcm.

Today, investors are waiting for the speech of the representative of the Bank of England Catherine Mann, as well as the Governor of the British regulator Andrew Bailey.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is narrowing, limiting the prospects for the development of the “bearish” trend in the short term. MACD is going down having formed a new sell signal (trying to consolidate below the signal line). Stochastic shows a more confident decline, but is quickly approaching its lows, indicating the risks of the oversold pound 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

SOLIDECN · April 19, 2022, 2:56pm

The New Zealand dollar shows a slight increase against the US dollar during the Asian session, retreating from the local lows of February 28, updated the day before. The positive dynamics of the instrument today is largely of a technical nature, while the news background remains quite modest and does not encourage investors to buy risky assets. However, the New Zealand dollar is under pressure from rising US bond yields, with 10-year yields climbing to 2.85% and 30-year yields to 2.93%, the highest level since April 2019. The USD Index gained over 0.20% to hit 100.975, testing the 2022 top. The US currency is also supported by the expectations of a more rapid tightening of monetary policy by the US Federal Reserve in comparison with other leading world central banks. Traders drew attention to today’s publication of Business NZ PSI. In March, the indicator unexpectedly strengthened from 48.9 to 51.6 points, which turned out to be better than the average analysts’ forecasts.

In addition, investors continue to evaluate macroeconomic statistics released yesterday from China. In Q1 2022, the country’s GDP grew by 1.3% in quarterly terms and 4.8% in annual terms, which turned out to be noticeably better than market expectations at the level of 0.6% QoQ and 4.4% YoY. In turn, the pace of Industrial Production in China in March slowed down from 7.5% to 5%, while Retail Sales showed a sharp decline by 3.5% after an increase of 6.7% in February. Analysts attribute the decline in Retail Sales dynamics to quarantine, which China was forced to introduce in some provinces in response to an outbreak of coronavirus.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is expanding, having difficulty keeping up with the surge of the “bearish” moods in the short term. MACD is going down, keeping a fairly stable sell signal (located below the signal line). Stochastic, having reached its lows is reversing into the horizontal plane, indicating risks of oversold NZD in the ultra-short term.

Resistance levels: 0.6770, 0.6812, 0.6874, 0.6924 | Support levels: 0.67, 0.665, 0.66, 0.655

SOLIDECN · April 20, 2022, 8:17am

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 · April 21, 2022, 7:12am

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 · April 21, 2022, 11:36am

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 · April 21, 2022, 1:39pm

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