Market Update by Solidecn.com

NZDUSD - The situation in the New Zealand economy remains difficult

The key driver of the downward movement of quotations is the trade deficit of New Zealand, which in August, for the first time in history, reached –12.280B dollars, falling from –11.970B in the previous period and losing 2.447B dollars on a monthly basis. The main factor behind the negative dynamics is the continued growth in the value of imports, which amounted to 7.93B dollars in August compared to 7.76B dollars earlier. Exports fell to 5.48B dollars from 6.35B dollars earlier. The cost of fuel imports rose the most — by 462.0M dollars or 79%.



The trading instrument is moving within the global downtrend, approaching the support line of the downstream channel. Technical indicators maintain a strong sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms downward bars in the sell zone.

Support levels: 0.58, 0.565 | Resistance levels: 0.59, 0.603
 


USDCAD - Trend change in the pair

This week, there was a lack of Canadian statistics published, which allowed the quotes of the trading instrument to remain under the full control of the US currency, but today the situation may change after Statistics Canada publishes data on retail sales for July. According to forecasts, the underlying indicator may decline by 1.2% after rising by 0.8% a month earlier, while retail sales may decrease by 2.0% after rising by 1.1% in June, which only exacerbates the dynamics of the trading instrument.



On the daily chart of the asset, the price continues to trade above the resistance line of the wide ascending channel with dynamic boundaries 1.28 – 1.34, confidently holding in the uptrend. The Alligator indicator's EMA oscillation range expands upwards, and the AO oscillator's histogram forms rising bars in the buying zone.

Resistance levels: 1.354, 1.375 | Support levels: 1.34, 1.322
 
DAX 40 - German stock market remains under pressure

The day before, the Association of German Banks (BDB) published an updated forecast for the economic development of Germany, which turned out to be much worse than previous estimates released in the spring. The Association assumes that Germany's Gross Domestic Product (GDP) will increase by 1.4% in 2022 (previously expected to grow by 2.2%), and consumer prices could add 8.0% this year and 6.2% in 2023. In addition, the forecast for Household Spending is also pessimistic, which could rise by 3.3% this year and then decline marginally by 1.2% next year.



On the daily chart of the asset, the price is trading within a Triangle pattern, approaching the support line. Technical indicators have already reversed to the downside and are strengthening the signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO oscillator histogram, having moved to the sell zone, continues forming descending bars.

Support levels: 12370, 11900 | Resistance levels: 12900, 13450
 


GBPUSD - Active decline amid the rhetoric of the British authorities

The key impact on the dynamics of the asset was made by the report of the new UK Secretary of the Treasury, Kwasi Kwarteng, who announced measures to stabilize the economic situation: also to support the payment of electricity bills, the situation with taxation caused special attention. The official noted that the government is working on a plan for a significant reduction in fees, for the implementation of which it will be necessary to raise an additional 72.0B pounds, and one of the ways the government announced to receive these funds is to reduce the amount of unemployment benefits, due to which the majority of the UK population now lives. After this statement, investors are actively redirecting their capital to other currencies, which may lead to the achievement of parity between the pound and the US dollar soon.



The trading instrument has left the boundaries of a long downward channel and, having broken the support line, is actively declining. Technical indicators maintain an increasing sell signal: the Alligator indicator's EMA oscillation range expands, and the histogram of the AO oscillator forms downward bars.

Resistance levels: 1.08, 1.1214 | Support levels: 1.0276, 1
 


USDJPY - Bank of Japan started foreign exchange interventions

The Bank of Japan conducted the first foreign exchange intervention since 1998 to support the yen after the decision to keep interest rates at a very low level of –0.10%. Its value is unknown but judging by the movement on the stock exchange, it was a test operation to determine the “depth” of the market, but more serious steps may follow from the financial authorities, which will provoke new pressure on the USD/JPY pair. It is obvious that the key point for making a decision will be 145.00, upon reaching which the officials are likely to approve new interventions. It is quite logical that in the current situation, macroeconomic statistics faded into the background, but this morning, Service PMI in Japan was published, which in September rose to 51.9 points after three months of decline in a row.



The trading instrument is moving within the global uptrend, holding near the high of the year, around 145.9. Technical indicators keep a stable buy signal: the range of fluctuations of the EMA on the Alligator indicator is directed upwards, and the histogram of the AO oscillator forms bars well above the transition level.

Resistance levels: 144.55, 145.9 | Support levels: 142.30, 140.33
 
CAC 40 - French stock market continues to decline

Weak Friday statistics acted as a driver of the instrument's decline. The French Manufacturing PMI in September fell from 50.6 points to 47.8 points, and the Services PMI was 53.0 points. In turn, the Manufacturing PMI of the eurozone fell from 49.6 points to 48.5 points, which led to a correction of the Composite PMI from 48.9 points to 48.2 points.

The upward dynamics in the domestic bond market continues. Today, auctions will be held to place short-term bills, the rate on which may exceed the previous one. In turn, the popular 10-year bonds are trading at a rate of 2.597%, exceeding the 2.442% shown last week. Global 20-year securities continue to grow, and the rate on them exceeded the peak values of mid-summer at the level of 2.724%, amounting to 2.754%.



Quotes of the asset continue to show an active decline. Technical indicators strengthen the sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO oscillator histogram, being in the sell zone, continues to form descending bars.

Support levels: 5700, 5500 | Resistance levels: 5835, 6125
 


USDCHF - the "bulls" intend to break out the 0.985 level

During the morning trading, the price of the USDCHF pair came close to the resistance level of 0.9850. Buyers are probably preparing to break through this mark and continue to grow with a target at the highs of May-June 2022. The growth of quotations is due to two factors: the strengthening of the US currency due to the increase in the interest rate of the US Fed (last week the regulator adjusted the value by 75 basis points to 3.25%) and the weakening of the euro, which also affects the currencies of neighboring countries, including the Swiss franc.



The USDCHF pair is trading in a long-term uptrend. The growth target is to update the highs of May-June 2022 at 1.004, the breakout of which will allow the instrument to continue the upward trend with a target at 1.0120. In turn, holding the resistance level of 0.9850 will lead to a price correction in the area of 0.965 – 0.96.



The mid-term trend is upward. Last week, market participants broke through target zone 2 (0.9762–0.9749), and the next growth target is zone 3 (0.9903–0.9890). The key trend support is shifting to 0.9733–0.9720. If the "bulls" test this zone as part of the correction, new long may be considered.

Resistance levels: 0.985, 1.004 | Support levels: 0.965, 0.96
 


NZDUSD - 2020 lows can be renewed

Although the growth rate of gross domestic product (GDP) of New Zealand remains low: in the second quarter, the indicator added only 0.4%, although in neighboring Australia, it increased by 3.6% over the same period, the Reserve Bank of the country intends to as part of the tightening of monetary policy parameters, reduce inflation by more than half, returning the indicator to the 3.0% region from the current 7.3%.



The long-term trend is downwards. Last week, market participants managed to break through the support level of 0.5860 and consolidate below it, and the next downside target was 0.5650. The chart of the RSI indicator has entered the oversold area of the market, which may lead to a technical upward correction in the long term.



As part of the medium-term downtrend, last week, the quotes reached the target zone 5 (0.5768–0.5754), and now the sellers are trying to break through it and consolidate below, after which the next sell target will be zone 6 (0.5628–0.5614).

Resistance levels: 0.586, 0.6055 | Support levels: 0.565, 0.55
 

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