Market News and Charts for May 19, 2020
Hey traders! Below are the latest forex chart updates for Tuesday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
EUR/TRY
The pair will continue to move lower in the following days towards a major support line. The European Union is divided in countering the biggest crisis it has faced as a single bloc. The coronavirus pandemic is expected to cause a euro wide recession, forcing member states to act individually and as a group. However, differences among member states are preventing the European Commission and the European Central Bank in implementing fiscal stimulus. Currently, the European institutions have injected a total of €500 billion in the EU. This is smaller than the United States $6 trillion stimulus. Meanwhile, the Turkish lira is thriving in the market following a credit swap with Germany and France. The UK also has a swap with the United Kingdom and Japan worth over $20 billion. Aside from this, the Turkish government already allowed some US banks to trade its currency, increasing the demand for the Turkish lira. 
GBP/AUD
The pair will continue to move towards its steep downward path. Brazil overtook the United Kingdom as the third most hit country by the coronavirus pandemic. Despite this, the UK still has the largest cases of COVID-19 in Europe. This, along with the divorce with the European Union, is expected to take a toll in the country’s economy. On January 31, the UK made history as the first country to leave the largest trading bloc. Despite optimism for Britain, reports pointed to a lockdown in the British economy following its withdrawal from the EU. In addition to this, the country’s economy was hit just a couple months away from the historical event. The UK was forced to close businesses and put the entire country in a lockdown. Australia is also a hard-hit country by the pandemic. In addition to this, the country is being dragged by the US-China tension. As a response, the Australian government introduces an “economic sovereignty” plan.
GBP/CAD
The pair is in a freefall and is expected to retest a major support line in the coming days. Canada made a bold move by closing its borders with the United States until June. This was the government’s response to contain the virus in the country. The US has the largest cases and COVID-19 related deaths in the world. In addition to this, Canada extended its wage subsidy until August. This is expected to help the country to feel a lesser impact of the pandemic in its economy. The virus has also forced the Bank of Canada (BOC) to slash 150 basis points in the country’s interest rate in March. The early action taken by the Canadian government and the BOC is expected to keep its economy afloat. Meanwhile, the United Kingdom still has the largest cases of coronavirus in Europe. Analysts expected the British economy to contract this year as its withdrawal from the EU will increase the burden of an economic recovery in the coming months.
USD/DKK
The pair will continue to move lower towards a key support line in the following days. Denmark was among the first countries to close its borders and among the first who opened it. The early action taken by the Danish government is expected to result in a quick recovery in Denmark. Meanwhile, the US lacked response on the pandemic, resulting in the country having the highest coronavirus cases and deaths in the world. Aside from the COVID-19, however, the US is facing increased tension with China. This was after the US accused China of intentionally creating the virus in its lab to use it as a bioweapon. In addition to this, the US passed a bill that would delist Chinese firms in the country’s stock exchange. Also, the US is baking pro-democracy groups in Hong Kong, which will further put a strain on the relationship of the two (2) largest economies in the world. China is seeking to end the phase one trade deal with the United States.
