Hey traders! Below are the latest forex chart updates for Monday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
USD/CZK
The pair will reverse back towards a major support line, ending its 4-day rally. On April 01, Czech Republic unveiled the third-largest stimulus package throughout the European Union. This amount represents 18% of the country’s GDP. In comparison, Germany set aside €1 trillion to help its economy cope with the economic effect of the coronavirus. This is equivalent to 28.5% of the country’s gross domestic product. The stimulus package might defy analysts’ forecast of a recession in Czechia. Prague also remains to have one of the lowest debt-to-GDP ratios in the European Union. This will help Czech koruna against the high demand for the US dollar. Unlike other currencies, the USD’s value will only increase even if the US government increases liquidity in the market. The cheap dollar will attract investors and traders, thus, higher demand. The disappointing US jobless claims last week will increase the chance of a new stimulus.
USD/CHF
The pair will continue its rally towards a major resistance line in the following days. The high demand for the US dollar will outperform the appeal of the safe-haven currency, the Swiss franc. One of Switzerland’s responses to reduce coronavirus cases is to shorten employee’s working hours. However, analysts warned that this might not be an effective countermeasure against COVID-19. The decision by the Swiss government was to prevent a total disruption in the country’s economy. This was after a leading indicator, which measures Switzerland’s economic performance in the next six (6) months, entered its 5-year low. With the figures recorded on its KOF report, analysts are now looking for the value of the Swiss franc to drop to levels last seen during the 2008 Global Financial Crisis. Meanwhile, the effect of the coronavirus in the US is the opposite. Demand for the cheap dollar will only increase the value of the US dollar in the long run.
EUR/GBP
The pair will bounce back from a key support line, sending the pair higher towards the nearest resistance line. The United Kingdom is struggling politically and economically. The country’s prime minister, Boris Johnson, earlier tested positive of the coronavirus. Now, he was taken to a hospital after he showed symptoms of the virus. The uncertainty surrounding the health of the UK’s highest leader is shaking the UK politics. During the December 12, 2019 elections, Johnson was able to get the majority votes from the Members of the Parliament. This was the biggest electoral vote since Margaret Thatcher in the 1987 election. Through this win, he was able to secure a Brexit deal with the European Union. However, the decision to leave the EU is hitting back against the country. Major reports from the UK were a disappointment from investors. The country can no longer seek funds from the EU following its withdrawal.
EUR/JPY
The pair will continue to move lower in the following days towards a major support line. Countries around the world are introducing fiscal and monetary stimulus to counter the economic threat posed by the coronavirus. Germany, the EU’s economic powerhouse, allotted €1 trillion or 28.5% of its GDP to fight the coronavirus. Meanwhile, Japan unveiled its largest stimulus package to date at $555 billion. Unlike Germany, however, Japan has no other source of funds other than the government fund. Germany and other EU member states will receive a piece of the EU funds. Analysts are also expecting Japan to further ease monetary policy in the coming weeks as the approved $555 billion package will not be enough to propel the third largest economy in the world. To support the Japanese yen, the Bank of Japan (BOJ) continuously increases its US dollar foreign exchange reserves. The country has now $1.359 trillion holdings of the US dollar.
