Forex Chart Analysis on major currencies

List of currencies with their analysis and Economic news

Key Summary

USD continues to suffer after the rising inflation rate

EUR outshines most currencies despite EU’s negative conditions

GBP fights on despite a shortfall in GDP

AUD: Trading pattern goes flat with minor swings

NZD: Double recession coupled with a prolonged strict lockdown could have a negative impact

CAD: An uptrend in crude oil prices gives it a comeback.

CHF: Relied on a weakened USD and WEA to remain strong.

USD

Gold price and all other USD currency pairs are seeing the weakness on US Dollar.

Gold going to break the resistance level in 4hr chart

Gold price starts to rise.

US inflation risk Statue of Libety falls to pile of dollar

The USD continued to weaken on early Wednesday following the fall of treasury bonds on Tuesday. The fall was orchestrated by a rise in the inflation rate in March.

US Dollar Depreciation

 The Dollar index showed a decline of 0.2% on the dollar compared to the major currencies. It was retailing at 91.683. The beneficiaries were JPY that rose by 0.2%, EUR by the same margin, however, the British Pound gained by 0.3%. As if that was not enough, AUD gained by 0.5%.

US FED feels its short term decline

The pressure on the dollar does not worry the Fed officials. They are optimistic that it is just a short-term disruption. That means they do not plan to change the monetary policy soon. They highly expect an inflation bounce back that would see the Dollar downtrend ease, and pick an uptrend soon. However, the most interesting part is how the New Zealand Dollar has benefited from this debacle. It gained by 0.7% due to the weakening USD and a steady interest rate by its Central Bank. 

EUR

eurusd at the key level in daily timeframe chart

EURUSD is at the key price level now in the daily timeframe chart.

Flags in front of European Commission building 

EUR has been on the offensive and has continued to outshine most of the major currencies. It has outclassed the USD in almost all battlegrounds. The Sterling Pound is also downtrodden by the EUR kid. Many people are wondering, what could be the reasoning behind the resilience despite a disorganized Covid-19 vaccine rollout.

AstraZeneca blood clotting 1

There has been a lot of politicization of brands to use, shortage, and immediate suspension of AstraZeneca vaccine owing to minor blood clotting issues. It could be the market’s unknown nature because traders thought those factors were to continue weighing heavily on the EUR. Another issue could be the recent inflation spike in the US.

EU central bank president Lagarde

 It rose unexpectedly and dealt a blow to the USD. The investors are waiting to hear what EU central bank president Lagarde will say. It could affect the currency either way. 

However, the EUR’s initial New York trading session saw a downtrend of EUR to 1.1877 before it bounced back to a strong high of 1.1955. The push shows a strong resilient uptrend that could pull higher than projected. The rise could go past the 1.2 range. 

GBP

GBPUSD moving in a downtrend daily chart

GBPUSD is moving in a downtrend channel in the daily time frame chart.

The Pound Beats the USD as the Dollar struggles to fight pressure that is being exerted by major currencies. The USD has continued to have a downtrend from the support level of $92 towards $91.5 as opposed to the GBP gains. The announcement of the US inflation rate of 2.6% saw mixed reactions by traders.

US inflation

The inflation affected negatively the treasury yields that were enjoying a steady rise until Tuesday. The consequence is that the yields have started moving slower than expected. That move rubbed the Dollar the wrong way by triggering a bearish move. The traders are, therefore, monitoring the move, to see how the currency behaves to the GBP in coming sessions. There is still push and pull, and the dollar can still pull a surprise.

Initially, the GBP was under pressure owing to the report that showed a shortfall of the projected GDP. It was projected that it would grow by 0.6% however; it only grew by 0.4%. This might have been due to the reports that the AstraZeneca vaccine posed some blood-related clots. It could trigger fear in the population leading to low vaccination outcomes. This will mean a delay in the reopening of the economy.

Bank of England


Another factor that could have contributed to pressure could be the quitting of ANDY Haldane as the Chief economist of BOE (Bank of England) later in June 2021. Not only quitting but also stepping down as an MPC (Monetary Policy Committee) member. 

AUD

The AUD has been in a consolidation phase for several weeks now. However, there have been some swings of highs. Its prices have not tolled the Simple moving average and have declined. A feeble swing upwards could be an indicator that the trend may break forth in the coming days. However, Wednesday there is a positive movement. The declining investment in the real estate sector is one of the factors that could be good for the AUD.

Australia Declining investment in the real estate sector

 

However, as we await news for the CPI and interest rates we remain optimistic that all shall go as projected. It is anticipated that the CPI would be very high.

Chinese trade with Australia

The release of Chinese trade figures has flattened the AUD trading pattern. The news could be good to the AUD however; they could as well trigger monetary tights by the Chinese Bank thereby affecting the AUD.

AUDNZD is moving in an uptrend, and right now the market is standing at the key price level.

AUDNZD is in uptrend in the daily chart

Previous resistance zone act as a new support zone now. and also the higher low of the uptrend line comes around this area.

 

NZD

The New Zealand dollar has not shown any impressive challenge to the USD on Wednesday.

New Zealand economy 1

This was because RBNZ decided to hold OCR at .25%. If we thought that was all, we are wrong because the Bank officials intimated that they could go lower than the 0.25% OCR.

New Zealand lockdown intersection of Queen Street and Wellesley Street

 The continued strict lockdowns and a double recession could negatively influence the NZD. As the overall inflation picks up, the weight value of the currency could be undermined. The government is viewing the high inflation just as a short-term disruption on the NZD. The decisions that were taken under pressure could have diverse effects on the strength of the Currency.

 

CAD

usdcad moving in downtrend daily chart

USDCAD is also still moving in a downtrend in the daily chart.

Crude oil Price raising

After a week of lows, the CAD fought back and made a comeback as it strengthened against the USD. This follows the uptrend of oil price that boosted its pushback. Remember, CAD, is a commodity-linked currency, therefore whenever a commodity such as oil goes up the same trend affects the Loonie. The weakening of the US dollar also contributed to its gains. A strategist with Wells Fargo (NYSE) Mr. Nelson attributed CAD’s gains to the falling USD, and not its strength.

Johnson and Johnson vaccine

The stoppage of the Johnson and Johnson vaccine did not in any way tilt the market projection. CAD gained 0.3% against the US dollar. Canadian P.M. was quoted as saying that the stoppage could have been a threat to the gains made that far. There were ongoing talks with the Johnson, and Johnson firm to ascertain the authenticity of the blood clot claims. 

Bank of Canada OTTAWA CANADA

On the other hand, the Bank of Canada might announce gradual plans of reducing the Asset acquisition. This would reduce the Balance sheet’s growth that would lead to more gains by the CAD going forward.US fiscal

They are projecting on the growth spillover resulting from the US’s fiscal package. As the day progresses we see a resilient USD that is fighting back strongly. It seems that the high inflation rate compounded by high CPI that shook the USD has started loosening its grip. It also confirms the Feds officials believe that it was just a transitory effect. An announcement in the congress by Fed Chair J. Powell later in the day could be the much-awaited turnaround for the USD. This could see CAD Starting to lose ground against the USD. 

CHF

CHFJPY is falling from the resistance zone in the 4-hour timeframe chart.

CHFJPy falling from the resistance in the 4hr chart

In the 1-hour timeframe chart, CHFJPY has broken the bottom level of the uptrend line.

chfjpy broken the bottom level of the uptrend line

As the USD continued to slip, the CHF held its ground and pushed harder to the dollar. However, the push might be short-lived because the USD seems to be having a comeback after the previous day’s sinking. What could be the cause of this sudden comeback?

US treasury bonds rebound

The treasury bonds have started rebounding, triggering demand for USD. There was some hope as SECO announced some results of its WEA (weekly economic activity) index that showed Switzerland reaching a Pre-crisis Level based on the final quarter of 2019.

Switzerland reaching a Pre crisis Level

The announcement has been a booster to the CHF and in turn has attracted its demand.

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