Daily Market Charts and Analysis July 23, 2019

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Charts

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

Charts

GBPJPY

The pair is creeping down the charts, on the lower portion of the trading channel seen on the daily chart. It has broken a key support like and is trading below that level, struggling to perk up. It’s also trading lower than both the 50- and 200-day moving averages, indicating a further bearish signal for the traders. The British pound weakened against the safe haven yen as investors sought to protect themselves from the looming worries over a no-deal Brexit. This comes as the market also fears that Boris Johnson, the frontrunner for the position of the UK’s next prime minister, would let a no-deal Brexit from the European Union. Such a “hard Brexit” is seen to be catastrophic for the British economy. Meanwhile, the Japanese central bank said that it will “persistently continue with powerful monetary easing” in order to hit its 2% inflation target, even as the economy is no longer in deflation.

Charts

CADJPY

The pair is trading below the 200-day MA and above the 50-day MA, suggesting a pretty tight-ranged trading for the medium term. The pair managed to recover some of its losses from the previous trading session. On the Canadian side, the Bank of Canada has decided to decrease the qualifying mortgage rate on Friday, from 5.34% to 5.19%, marking the first time that the rate has dropped. On the economic side, an economic report showed an unexpected decline in sales as consumers cut back on purchases of groceries, alcohol, and clothing. Sales dropped 0.1% in May, according to Statistics Canada. The figure failed to meet analyst expectations of 0.3% increase. The report comes in stark contrast with the broader economic rebound in the Canadian economy. Early this month, the central bank of Canada opted to keep its benchmark interest rate steady at 1.75%.

Charts

GBPCHF

The British pound continues to weaken against yet another safe-haven asset in the form of the Swiss franc. The pair traded below both the 50- and 200-day moving average, suggesting further bearish trend in the longer term. On the Swiss side, earlier this month, Deputy Chairman Fritz Zurbruegg said that the Swiss National Bank will stay “boring” and stick to its approach of negative interest rates and currency market interventions to decrease the attractiveness of the Swiss franc. Fast forward to the present, the Swiss central bank is awaiting hints from the European Central Bank, which say that if rates are reduced further below zero, a move that seems very likely given the economic weakness, measures might be necessary to prevent the policy from squashing lenders’ profitability. Among five central banks with negative rates, the ECB is the only one not to include offsetting measures.

Charts

EURAUD

The pair is trading just below the 200-day MA on the daily chart, with the euro weakening ahead of the much-awaited ECB announcement for key interest rate on the trading bloc. The markets view the ECB to take action, including a rate cut, during its policy meeting this coming Thursday. Central banks around the world are gearing up for stimulus to support the world economy amid a heightened uncertainty due to trade wars and the looming Brexit. The Federal Reserve is already expected to cut rates, and Frankfurt had to “break the perception on markets that the ECB was cornered and had no more instruments.” Although the domestic economy is practically resilient, members of the ECB governing council in Frankfurt will keep close tabs on the threats from abroad, including the US-led protectionism, a no-deal Brexit, the weakness in emerging markets, as well as geopolitical risks like tensions around key Gulf shipping routes.

Charts

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