Market News and Charts for May 21, 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!
AUD/NZD
The pair failed to breakout from a major resistance line, sending the pair lower towards a major support line. Australia’s economic activity plummeted in April as the lockdown triggered by the coronavirus took a toll in the country’s economic health. Australia’s Manufacturing and Services Purchasing Managers Index (PMI) reports recorded lower figures at 42.8 and 25.5 points, respectively. Analysts are looking forward to weaker reports next month as the country continues with its lockdown approach to contain coronavirus. On the other hand, New Zealand began lifting its restrictions on Monday as the country successfully flattened the curve of its COVID-19 cases. This will enable the country to quickly recover the losses it incurred during the month-long lockdown. In addition to this, investors are expected to flock on the New Zealand dollar in the coming days as renewed hope and optimism surrounds the kiwi currency. 
EUR/BRL
The pair will continue to move higher in the following days towards its all-time high. The EU’s economic powerhouses, Germany and France, posted their lowest Manufacturing and Services Purchasing Managers Index (PMI) reports in the first week of May. The bimonthly report saw its figure dropping to the lowest level since the 2008 Global Finance Crisis. In addition to that, the European Union also suffered the same fate. Analysts, however, are optimistic that these reports have already hit their bottom and are projected to post higher figures compared to its previous reports. The positive sentiments from analysts came as most EU member states continue to ease their restrictions. Spain, the EU’s most affected member state from the coronavirus pandemic, is now only the 6th on the list of countries with the biggest cases of COVID-19. Brazil, on the other hand, is preparing to become the second most infected country in the world.
USD/BRL
The pair will bounce back from an uptrend channel support line, sending the pair higher towards its all-time high. The largest economy in South and North America are facing challenges with the coronavirus pandemic. Brazil placed 3rd while the US has the largest COVID-19 cases and deaths around the world. The fear of contamination had forced their government to temporarily shut businesses or reduced their working capacities. In the US, the shutdown caused its economy to shrink by -4.8%, the biggest since the Great Recession in 2008. Meanwhile, Brazil is expected to plunge by 6% in Q1. Between the two (2) countries, the US will thrive the most. US President Donald Trump has now the backing of both the Republicans and Democrats as officials try to save the US economy from collapsing. On the other hand, Brazilian President Jair Bolsonaro is on the lookout for the country’s third health secretary since the beginning of the coronavirus pandemic.
GBP/BRL
The pair will bounce back from a major support line, sending the pair higher towards its all-time high. The United Kingdom and Brazil are in a race that both countries will not want to participate in. Brazil overtook the UK yesterday on the list of countries with most coronavirus cases. Brazil is now the third in the world with 293k cases while the UK have 248K. The rise in the coronavirus cases in Brasilia is expected to take a toll on its economy and currency. Aside from the record level cases, analysts and investors are also worried about the stance of President Jair Bolsonaro in COVID-19. The South American president downplayed coronavirus. He is currently searching for the country’s 3rd health chief since the coronavirus outbreak. The former chiefs were either fired or resigned to their recommendations to lockdown the Brazilian economy. Brazil’s president was previously criticized for downplaying Amazon rainforest’s burning.
