Market News and Charts for February 17, 2020
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!
The pair will continue to move higher in the following days towards a major resistance line. The Reserve Bank of Australia hold onto its current benchmark interest rate of 0.75%. This was amid fears by central banks on the economic implications of the COVID-19. Coronavirus is the latest challenge that Australia faces for its economy. In 2019, the country took the hit from then escalating trade war between the United States and China. This nearly pushed Australia on the brink of recession. Aside from this, the wildfires that burned more than 10,000 homes and displaced family is an on-going challenge for Canberra. This year, Japan is the country nearest to a recession. The global economic slowdown is crippling the already sluggish growth of Japan. For the fourth quarter on 2019, Japan’s gross domestic growth (GDP) plummeted 1.6%. A negative growth for the current quarter will technically put Japan into recession.
The pair will break down from a major support line, sending the pair lower towards a downtrend support line. Australia is under pressure from the largest economies in the world – the United States, China, and the European Union. Bill Browder, the man who pioneered the Magnitsky Act, is calling Australia to pass a similar legislation. He argued that Australia is a favorite spot for money laundering. The Magnitsky Act sanctions violators of human rights around the world. As for China, Beijing accuses Australia of politically discriminating Huawei on 5G race. Australia remains the only country to ban the Chinese telecom giants among the members of the Five Eyes Intelligence Alliance. The ban on Huawei comes amid pressure from the United States. The US accused the company of spying for the Chinese Communist Party. The EU and Australia are also at odds following Canberra’s signing of post-Brexit trade agreement with the United Kingdom.
The pair will continue to move lower in the following days after it broke down from a major support line. Former British colonies – Australia, Canada, and New Zealand – will benefit from the Brexit. The UK’s divorce from the European Union might result in the formalization of the CANZUK (Canada-Australia-New Zealand-United Kingdom). But among the three (3) former colonies, Canada will gain the most from the withdrawal. Not only did it seek a post-Brexit trade agreement with Britain, but it also seek a closer tie with the Royal Family. The Dutch and Duchess of Sussex has their own Brexit moment known as “Megxit”. The couple plans to live in Canada and the Royal Family will partially support them financially. With plans to sign post-Brexit agreements, Australia and Canada will be subject to the EU’s scrutiny. However, only Australia is currently at odds with the European Union, making the Canadian dollar a safer bet.
The pair will bounce back from a major support line, sending the pair higher to retest its previous high. The appeal for safe-haven currencies – Japanese Yen and Swiss Franc – increased since the beginning of 2020. This was amid global economic uncertainties that roots from China, the European Union, the United States, Japan, and the Middle East. Currently, the slowdown in the EU’s economic powerhouse and the threat of COVID-19 make the market gloomy. The coronavirus is an economic threat, specifically to the second largest economy in the world, China. Furthermore, the German economy is on the verge of recession after the largest European economy published a zero percent growth for the fourth quarter of 2019. The threats of a trade war by the United States could further drag Germany. This will have a domino effect on the entire European Union, including non-EU European countries Switzerland and Norway.
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