Hey traders! Below are the latest forex chart updates for Wednesday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
AUD/CAD
The pair will break out from the “Pendant” pattern resistance line, sending the pair higher towards a major resistance line. Exactly a year ago, the Reserve Bank of Australia had an interest rate of 1.25%. However, the US-China trade war and the coronavirus pandemic had forced the central bank to cut its benchmark interest rate to 0.25%. Yesterday, The RBA retained the 0.25% rate, calming investors and traders of the Australian dollar. Economies around the world had already introduced monetary and fiscal stimulus to increase liquidity in the market. However, the additional supply of cash made the value of the currencies to plummet. Meanwhile, Canada slashed 100 basis points of the country’s interest rate in just a month. Australia took 1 year to cut the same rate. In line with this, investors are pessimistic on Canada’s economy given its emergency rate cuts last March 04, March 13, and March 27, respectively.
AUD/CHF
The pair will fail to break out from a key resistance line, sending the pair lower towards its previous low. Despite the RBA holding to its 0.25% interest rate during the recent meeting, the AUD will continue to drop in coming sessions. The stability of Switzerland’s unemployment report is weighing down on the positive news of a hold decision from Australia’s central bank. Zurich saw an increase in unemployment rate for March, both for people who are actively seeking jobs and those who are not. For unemployed job seekers, unemployment rose from 2.6% to 2.8%. Meanwhile, people who are not actively seeking jobs but are unemployed rose to 2.9% from 2.5% in February. On the other hand, home loans in Australia made a significant drop. This drop indicates that people are saving their money for other purposes, including emergency funds during the coronavirus outbreak. However, this also means that Australia will have less economic activity.
GBP/JPY
The pair will break out from its current resistance, sending the pair higher towards a major resistance line. Investors and traders are opting to leave Japanese assets, which includes stocks, bonds and yen. This was amid the decision by Japanese Prime Minister Shinzo Abe to declare a “State of Emergency” in the country. Investors are worried that the economic growth of the third-largest economy in the world might further slow down due to this announcement. In line with this, Abe introduced the largest stimulus package in the country at $555 billion. Analysts see further monetary easing in Japan in the next few weeks. With more money in circulation, the value of the Japanese Yen will start to decline. Meanwhile, analysts’ optimism for the British pound is back following reports that British PM Boris Johnson is now recovering from the virus. Earlier, Johnson was admitted to a hospital and was transferred to the Intensive Care Unit (ICU).
CAD/JPY
The pair will continue to move higher in the following days to retest a major resistance line. Demand for the Canadian dollar will increase as analysts expect a better-than-expected result for Housing Starts and Building Permits reports. These reports are leading indicators for the country’s service and manufacturing sector, thus, giving investors and traders an overview of the current economic health of the country. In March, many investors and traders sold CAD after the Bank of Canada (BOC) cut its benchmark interest rate thrice. Interest rate dropped from 1.25% at the beginning of March to 0.25% at the end of the month. On the other hand, the Japanese yen will experience a selling pressure in the short-term as the country entered a state of emergency. On top of unveiling the largest stimulus package in the history of Japan, Prime Minister Shinzo Abe declared a “State of Emergency” to prevent the coronavirus from further affecting its citizens.
