Daily Market Charts and Analysis January 30, 2020

Here are the latest market charts and analysis for today. Check them out and know what’s happening in the market today.

AUDJPY

The pair is trading in the red now, falling steeply from its previous highs and breaking below both the 50-day and 200-day moving averages. The safe-haven appeal of the Japanese yen is apparently prevailing, while the Australian dollar is heavily pressured by the worries over the rapidly increasing Wuhan coronavirus. The China-originating virus threatens to infect a good portion of the Chinese economy, adding to the downside of the underperforming Australian dollar. Worries of a potential global pandemic clouded the outlook for growth, prompting a selloff in riskier assets over the week. In Australia, there are already five confirmed cases of the new coronavirus, while hundreds of Australians are still trapped in Wuhan city in Hubei province, which is the ground zero of the outbreak. The Aussie is hit in large because China is Australia’s major trading partner, exposing the Aussie to any downside risk in the Chinese economy.

AUDUSD

The Australian dollar is also falling against the US dollar, with prices continuing to slip to October 2019 lows after the coronavirus hit. Also, the US dollar is moving according to the decision of the Federal Open Market Committee to leave rates unchanged. The Federal Reserve also reaffirmed its wait-and-see stance while it measures how rate cuts last year protected the US economy against the threat of a weaker global growth. According to the Fed Chairman Jerome Powell, the current policy stance is appropriate. However, his comments also suggested lingering risks to the global economy and difficulty sustaining inflation at the Fed’s 2% target. It also meant that if they were to change rates, it’s more probable they will cut the rates instead of raising them. Except 2018, inflation has stayed below the target level since the US central bank formally adopted the target in 2012. In 2018, the Fed most recently raise interest rates.

AUDCAD

The AUDCAD pair is also trading in the red today, going down after rising up previously. The pair has broken below its sideways trend previously, with the Canadian dollar taking the lead against its Australian counterpart. The Canadian dollar is also moving with a boost from oil prices, particularly in the Western Canada Select. Crude oil prices were higher on Wednesday after an attempted attack on an oil production facility in Saudi Arabi, with the Houthi rebels from Yemen claiming responsibility. At the same time, the loonie is also facing some risks from the coronavirus scare. The rebels claimed that they targeted Saudi Aramco facilities in Jizan, which is a city north of Yemen on the Red Sea. They claimed that the attack came as retaliation for “escalating air strikes” on Yemen by the Saudi coalition. If confirmed, this would be the first attack from Yemen’s Houthis on targets in Saudi Arabia since the end of September.

AUDCHF

The Aussie is also largely weak against the safe-haven Swiss franc, with the coronavirus scare underpinning demand for safe-haven currencies. Apart from that, the Swiss franc is also gaining against several rivals as the country recorded its highest ever trade surplus in 2019. The latest data may trigger problems for the central bank as it attempts to justify its currency depreciating efforts after accusations of being a currency manipulator. According to the Federal Customs Administration, the country’s trade surplus declined to $2.5 billion in December from $2.36 billion in November. Exports decreased for the third consecutive month. Imports edged up as the nation increased purchases in pharmaceuticals, vehicles, and energy. The Swiss franc is trading within its highest levels since 2017, which could derail the plans of the Swiss National Bank to weaken the Swiss franc while also convincing the US Treasury that it’s not currency manipulation.