Daily Market Charts and Analysis November 08, 2019

USDJPY

The pair is trading on an uptrend, and it recent broke above the 200-day moving average on the daily chart after struggling to move through a key resistance line. Thanks to the ebbing rate cut expectations and the concomitant weakness, the bucks managed to trade up steadily through the recent trading session. Price movements are still following the latest developments in the US-China trade war, as well as the interest rate decisions from both the currencies’ central banks. The Federal Reserve recently cut its benchmark interest rates—for the third time this year—while the Bank of Japan held rates steady. However, the BOJ issued stronger signals that it would cut rates soon if overseas risks and economic uncertainty continued to bog down the recovering Asian country’s economy. In terms of the trade war, a spokesperson for China’s Commerce Ministry said that the US and China have agreed to roll back some of the existing tariffs on their goods.

NZDCAD

The pair is still trading within tight ranges, with traders apparently indecisive between the New Zealand and Canadian dollars.  For the New Zealand dollar, traders are pricing in at least one more rate cut from the central bank. The Reserve Bank of New Zealand may take the cash rates to 0.75% to be in line with Australia. A rate cut may be possible if one considers that inflation remains below target and both growth and labor market are still weak. Meanwhile, the Bank of Canada has largely diverged from other major central banks this year. The BOC has left its benchmark interest rates on hold at 1.75%. Canada’s inflation remained close to its 2% target, while the labor market is marching at a robust pace. The employment report for October will be due later in the day. If the actual figures fall in line with expectations, the Canadian dollar will probably move on the upside, and thus it will weaken its New Zealand counterpart.

GBPUSD

The pair is trading lower on the daily chart, apparently wishing to complete the double-top pattern it recently registered. The 200-day moving average is flatlining, while the 50-day moving average below it appears to be heading north. The US dollar perked up against the British pound after trade war news that the US and China are rolling back existing tariffs on each other’s goods. Apart from that, the British pound also moved on news from the Bank of England. The BOE held its policy-setting meeting yesterday, in which two members of the Monetary Policy Committee unexpectedly voted to cut interest rates. Markets and analysts were expecting a solid 9-0 vote to hold interest rate steady. The bank held rates steady, but the surprise dissent from the two policymakers suggests that the bank may be delivering a rate cut in the first half of 2020. This will probably come true if there is no remarkable pickup in the UK economy appears.

EURCAD

The pair is still trading within tight ranges, with the 50-day moving average serving as a solid resistance for the price. For fundamentals, the European Union’s executive branch revised down its growth forecast for the 19-member eurozone for this year and the next. It also warned that the current conditions could be worse as more uncertainties loom large over the market. The European Commission said the eurozone may grow only 1.1% this year. As for 2020, the bloc may only grow 1.0%. For 2021, the growth forecast is at 1.2%. According to the Commission, the manufacturing sector is receiving the brunt of the economic slowdown. And because of that, it says that the bloc may be up for “a protracted period of more subdued growth and muted inflation.” The European Central Bank has reactivated its bond-buying stimulus program and has cut interest rates to fight the slowdown in growth.