Market News and Charts for December 18, 2020

Hey traders! Below are the latest forex chart updates for Friday’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 a key resistance line, which will send the pair higher towards the 1.02000 resistance area. Both Australia and Canada posted upbeat results for their labor market. In Canada, the ADP Nonfarm Employment Change added 40,800 jobs on Thursday, December 17. The reported figure was the second highest and second positive data reported over the course of the pandemic. In November, there were 383,500 lost jobs for the same report. However, this was not enough to convince investors to bet against the Australian dollar. In addition to this, analysts are expecting a slowdown in retail sales in Canada due to fears that the outbreak in the US might spill in the country. Expectations for Retail Sales MoM report was 0.2% compared to September’s 1.0% growth. Investors should also weigh in the possible implications of president-elect Joe Biden’s inauguration in the White House in January 2021.

AUD/CHF

The pair will continue to increase in coming sessions after it bounced back from an uptrend channel support line. The Australian dollar is competing against the Swiss franc, the Japanese yen, and the US dollar as a safe -haven currency. This month, Australia was officially out of a technical recession following a GDP growth of 5.0% in Q3. Treasury Secretary Josh Frydenberg added that the country’s economy is experiencing a robust recovery due to fiscal stimulus, low COVID-19 cases, and low unemployment rate. In June, the country unveiled its $470 stimulus package to help the economy recover from the pandemic. The averaged 15 cases per day since September has also helped the economy from further declining. Meanwhile, unemployment has declined to 6.8%, the lowest reported figure for the past seven (7) months. Due to the upbeat economic data, the government’s budget deficit has shrunk from 214.0 billion to 197.7 billion in November.

GBP/JPY

The pair will fail to break out from support lines, sending the pair lower towards the September 22 low. The four (4) week lockdown in November had taken a toll on some reports from the United Kingdom. Retail sales have declined on the month of lockdown to -3.8%, the first reported negative figure since June. Car registration in November also fell by -19.3%. Meanwhile, the purchasing managers index (PMI) reports were mixed. Manufacturing PMI continues to expand since July with 57.3 points. Composite PMI also posted above the 50 points benchmark at 50.7 points. However, this was a missed from consensus estimate of 51.3 points. Only the Services PMI contracted on Wednesday’s report, December 16, at 49.9 points. Meanwhile, analysts anticipated an expansion of 50.5 points. As for the consumer price index (CPI), it fell by -0.1% in November compared to a flat zero growth in the prior month.

CAD/JPY

A slowdown in consumption among Canadians was visible in the recent reports. On Wednesday, December 16, the country’s CPI report advanced by 0.1% only for the month of November against the 0.4% result in the previous month. This figure is expected to drag the retail sales report next month, which has already been experiencing a slowdown since October. On Friday, December 18, the retail sales report grew by 0.4% month-on-month compared to September’s result of 1.1%. Another concern by investors with the Canadian dollar was its exposure to the greenback. In January 2021, president-elect Joe Biden will officially sit at the White House. The transition from a Republic led government to a Democratic one is expected to create volatility and uncertainty in the market. Meanwhile, Japan has been increasing its trading relations with Asian countries after becoming a member of the RCEP (Regional Comprehensive Economic Partnership).