Market News and Charts for October 21, 2020
Hey traders! Below are the latest forex chart updates for Wednesday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
USD/CAD
The pair will break down from a major support line, sending the pair lower towards its February 2018 low. Investors are expected to limit their exposure to the US dollar until the initial jobless claims report on Thursday, October 22, will be published. In last week’s report, the number filing for unemployment benefits rose by 898K, the highest in six (6) weeks. The reason for the sudden increase was the postponement of negotiations for the new stimulus bill. Since the coronavirus became pandemic in March, the US government and the Federal Reserve cumulatively injected $6.6 trillion in the local economy. However, as the pandemic continues to limit business operations, more companies needed more cash to keep their operations running. The pending $2.2 trillion bill is supposed to help them in the near term. Given the current situation of businesses, analysts are expecting a similar or even higher number of claimants this week.
NZD/USD
The pair will break down from two (2) support lines, which will send the pair lower towards a key support line. Adrian Orr of the Reserve Bank of New Zealand (RBNZ) said there is more room for the central bank to ease monetary policy. This was despite the central bank slashing its benchmark interest rate to a record low of 0.25%. Following the reelection of Jacinda Ardern as the country’s prime minister, analysts are expecting additional stimulus from the government and the RBNZ by November. However, the upbeat results from New Zealand’s reports are expected to overshadow Governor Orr’s statement. The credit card spending declined by 9.9% in Wednesday’s report, October 21. The result from the prior month was 11.9%. And looking at the trend, investors should expect a higher consumer confidence in the coming weeks. On the other hand, investors are pessimistic on Thursday’s report, October 22, for the US initial jobless claims.
AUD/JPY
The pair will continue to move lower in the following days after it broke out from its support line. A transcript report of the issues that the Reserve Bank of Australia had discussed in its most recent meeting was the possibility of further monetary easing. Analysts pointed out that the monetary policy that the central bank is referring to was its interest rate. The current rate is 0.25% and analysts are expecting that the RBA could further trim this figure up to a historical 0.10% rate. The next meeting by the members of the central bank will be on November 03. On the other hand, Japanese Prime Minister Yoshihide Yuga made his first foreign trip in Indonesia as he seeks to expand Japan’s influence in the region. Meanwhile, Economic Minister Yasutoshi Nishimura is looking forward to a Trans-Pacific trade pact meeting with his British counterpart. The partnership is more likely to happen as the UK is set to officially withdraw from the EU by 2021.
AUD/USD
The pair will bounce back from its current support line, sending the pair higher towards its previous high. The uncertainty over the US economy is causing the greenback to decline against the other currencies. First, the number of people filing for unemploym
ent benefits last week surged to 898k from 845K in the prior week. Analysts said this sudden increase was due to the delay in the $2.2 trillion stimulus bill. President Trump said that the negotiations for the new stimulus will only restart once the election is over. That means, investors should anticipate higher volatility over the US dollar in the remaining days before the election. And second, among the developed economies, only China is expected to grow this 2020 by 4.9%. If the growth continues in the years to come, China could replace the United States as the world’s largest economy. But for now, investors should adjust their strategies to fit the economic agenda of the next leader of the United States.
