Market News and Charts for March 19, 2020
Hey traders! Below are the latest forex chart updates for Thursday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
The downtrend for the pair is still intact, with the Swiss franc strengthening massively against the euro and taking the EURCHF exchange rate to five-year lows. It’s also generally below the down-trending trend line, indicating bears are in control of this pair. There is a solid support line just below the price’s current level, and if that line proves to be sturdy, prices could perk up a bit. For central bank news, the pressure is mounting for the Swiss National Bank as policymakers and other major central banks around the world implement massive rate cuts and increased stimulus as a response to the coronavirus pandemic. The SNB hasn’t unleashed any breaking action so far, even though, as the chart indicates, the Swiss currency is at a record low against the euro. Previous reports suggested the SNB depends heavily on interventions to control the Swiss franc’s value, although the US has also previously threatened to mark the bank as a currency manipulator.
The euro has largely chopped sideways against the Japanese yen, falling to a record low and then perking back up again to exchange gains and losses with the safe-haven currency. Opening and closing prices have largely swung in a volatile manner as traders tangoed about whether to commit to the rising euro or stick with the safety of the Japanese yen. Still, analyses have so far predicted further declines, with the rate still off from January-February highs. In spite of its efforts, the European Central Bank still largely blunders its ways to stimulus and support packages for the economy, with participants questioning whether ECB Chief Christine Lagarde could pull off a Draghi-like feat for the eurozone. And as the fate of the euro and the eurozone remains in question, bond yields from Italy is shooting up as high as 60 basis points in recent sessions. The suggests traders are more inclined to stick with safe-haven assets like the Japanese yen and bonds.
The British pound is a lot weaker than the euro when paired with another safe-haven currency, the Swiss franc. As mentioned, the Swiss franc has been on steroids with gains in recent sessions, despite SNB’s intervention. Meanwhile, the British pound is sinking in the red. Looking at the daily chart, the value of the pound against the Swiss franc has plunged even lower than its value pre-Boris Johnson December election win. All those gains after Johnson’s landslide victory in the Parliament and Brexit are erased. What’s left is the remnant of a currency struggling to find support below September 2019 lows. Bank of England Governor Andrew Bailey said the bank is watching the pound “very carefully.” Bailey said the currency’s fall will be addressed during the Monetary Policy Committee Meeting on March 26. With traders increasing demand for more liquid currencies and expecting the BOE to cut rates, the GBP is likely to fall further.
Jumping over to the Great White North, the commodity-linked currency Canadian dollar is also sinking under the weight of risks against the Japanese yen. Similar to the British pound, the loonie is off its recent highs and trades well below its recent lows. Canada suffers both from the fears of a coronavirus-induced fears of recession as well as its twin, the oil price crash. Oil prices are already near their lowest level since 2002. WTI recently bucked its knees and collapsed a staggering 19.2%, while Brent crude lost a whopping 9.7%. There are predictions out there, albeit incredibly dim, that oil prices could eventually reach 0%, as oil supplies completely outstrip global storage capacity. Oil is a major Canadian export, making any drop in oil prices spur equivalent drop in the loonie’s value. Of course, if oil prices stay low for too long, oil- and gas-dependent economies will crumble. And so, traders are hedging and buying more safe-haven currencies.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!