Daily Market Charts and Analysis October 16, 2020

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

USDCAD

Canada is approaching the second wave of coronavirus cases. The country added 2,342 confirmed cases on Thursday alone, which was its highest daily case total since the beginning of the pandemic earlier this year. Investors are worried that the new surge could result in another uncontrollable wave of cases in the country, inevitably hindering its economic recovery. This will be the pair’s main driver, other than the increasing optimism for the US stimulus after the elections and the recent positivity from the Federal Open Market Committee, which claimed that the Federal Reserve wouldn’t need to pump out its own stimulus package for the rest of the year. The loonie is more likely to fall against the greenback because of this, despite seeing the pair’s 50-day moving average stoop lower than its 200-day moving average counterpart, especially now that risk aversion has become more prominent with rising uncertainties.

NZDUSD

The Reserve Bank of New Zealand confirmed that there’s a real possibility of negative benchmark interest rates by this year. The central bank is projected to meet on November 3 to discuss monetary policies that will make up for the losses seen in the nationwide lockdown from earlier this year. The possible rate stands as the official cash rate stands at its record 0.25% low since its larger-than-expected plunge in the first quarter that helped counter the fiscal effects of the virus. Not only that: New Zealand is still at its steepest economic contraction on record, and economists are claiming that it could make a double-dip next year, even if it manages to recover this year as estimated. The pair is projected to fall before the meeting next month, or could continue after the presidential elections in the United States result in another stimulus package that could help businesses keep economic activity going across the nation.

AUDJPY

The market is in risk aversion, which will likely benefit the yen. This will come as unemployment in Australia continues to rise, shown by the 0.7% drop from 7.5% to 6.8% in August even as it heals from the coronavirus-led economic decline at the time. Underemployment had also increased to 11.4%, while participation had downed to 64.8% by 0.1 points. The Reserve Bank of Australia had already confirmed that the Australian economy’s recovery will likely be uncertain for the rest of the year beforehand, but the results are unlikely to calm investors anytime soon. The unprecedented slump is projected to pull the pair’s 50-day moving average lower towards its 200-day moving average as it continues to trade sideways. The Japanese yen is likely to lift in the near-term as Japan’s Prime Minister Yoshihide Suga continues his predecessors’ Abenomics, which is still projected to strengthen its struggling economy post-coronavirus.

AUDUSD

The safety of the US dollar, despite rising coronavirus cases in the country, is likely to benefit in the near-term thanks to the constant hope that it will eventually implement another economic stimulus package after the November elections. Notably, the recent halts in negotiations for a stimulus before the said elections will also benefit the dollar against the Aussie, in particular. This will be proven by how the pair’s 50-day moving average just touched its 200-day moving average, although the latter is still below it. Despite the massive budget allocated to prop up employment figures in Australia, it looks like its efforts haven’t been successful: about 29,500 more people went out of work in September, which increased overall underemployment figures, as well. Australia’s recovery remains uncertain for the rest of the year after it hesitantly reopened travel doors, brought by the slowing coronavirus case increases.