Market News and Charts for November 9, 2018
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Aside from a currency’s external environment, Investors and Traders should also look for the internal environment of a country. Both Australia and the European Union are having problems when it comes to their domestic affairs. Australia was battered by changing leadership for the premiership which saw 6 Prime Ministers for the past 10 years. This makes investors question the stability of the political environment within the country. On the other hand, European Union faces a lot of challenges from Angela Merkel, Italy’s budget, EU Nationalist member states, European Central Bank and the European Commission election and the US pulling out of the Intermediate-Range Nuclear Force Treaty with Russia. Expect a rebound for the Euro.
The Euro tried to recover against the Swiss Franc in the past few months as Angela Merkel and Emmanuel Macron tried to lead the entire European Union as a leader for globalization. But a departure of Merkel as a party leader on December and as a Chancellor on 2021 can result to a European Union not having a clear and strong leader like how Angela Merkel leads the EU in a decade. Macron was stepping as a successor for Angela Merkel’s EU vision, but the analyst is wary that Macron was ready to lead the union. Macron recently takes a 4-day leave which was questioned if he will be physically fit as a leader.
Both the European Union and Japan tell the world that it would promote multilateralism despite Trump’s US isolation. But it was seemingly that the European Union was too distracted on its domestic issues, while Japan was circling around Southeast Asia to form bilateral agreement and trade pacts. Last October, Prime Minister Shinzo Abe visited China’s Xi Jinping to talk about trades after Trump’s trade war greatly affected Southeast Asia. The CPTPP (Comprehensive and Progressive Trans-Pacific Partnership), formerly TPP (Trans-Pacific Partnership) with the United States as the leader of the pact, will also be ratified on December with 6 out of 11 member states already signed the ratified treaty.
The pair failed to penetrate the resistance level for the 4th time sending the pair lower this week, but it was a confirmation of a higher low to form a bullish pattern. The major catalyst for the pair, just like with EURJPY, was on how fast and how effective could the countries make trading agreements to counter Trump’s US isolation stance. The pair could reverse once the European Union member countries, together with the United Kingdom, will come up with an approved negotiation deal.
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