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The US dollar is looking to make a comeback against the Swiss franc, another forex player in the safe-haven department. The pair is projected to reach its resistance half-way through the month and investors are hoping that it finally breaks through it. USDCHF bulls aren’t fazed by the updates and developments from the deadly novel coronavirus from China as their optimism towards the alarming disease keeps them determined. In fact, more and more experts in the medical field are suggesting that the virus’s mortality rate remains relatively low compared to the SARS virus years ago. The applaudable recovery of the ISM manufacturing PMI in January gave the pair a much-needed boost to advance in sessions. Just recently, the US Institute for Supply Management reported that the ISM manufacturing purchasing managers’ index rose from 47.8% to 50.9%, jumping well beyond experts’ projections of 48.5% improvement.
The British pound is expected to get weaker as the transition period for Brexit, the divorce of the United Kingdom and the European Union, takes place. Brexit protests were reported from the streets of Britain immediately after the Brexit clock struck its last minute of January 31st. However, the strong manufacturing PMI from the United Kingdom is countering the strong rebound of the ISM manufacturing data from the United States. Just recently, the UK manufacturing purchasing managers’ index impressively rose from 47.5% to 50.0% in January, coming in strong than the 49.8% improvement projected prior. Meanwhile, the US ISM manufacturing purchasing managers’ index also bounced from 47.8% to 50.9% in January, hiking higher from experts’ expectations of 48.%. Bears are counting on upcoming reports to deliver better than expected results this week which will give the US dollar another lift against the British pound.
Despite the notable improvements from the British economy, GBPAUD bears are holding on to the downward momentum of the pair. Bears are looking to force the pair lower by the latter half of the month. Surely after the bushfires that ravaged through the country of Australia, concerns from traders about the RBA potentially cutting their interest rates got more intense. However, the Reserve Bank of Australia opted to hold on to its current rates and just signaled that the bank will have to hold onto it until April. That gave bears a good sign of relief as the Australian dollar would actually lose its strength therefore potentially losing its gains against the British pound sterling. Meanwhile, the efforts of the British Prime Minister Boris Johnson to strike a free trade agreement with the European Union fails to lift the British pound earlier this week. Perhaps investors raised their walls following the not-so-climatic Brexit on the last day of January.
The odds are against EURCAD bears in sessions, leaving a clear path for bulls to advance and take the pair higher. The EURCAD pair is expected to climb to its resistance by the middle half of the month. However, as of the moment, the upward momentum of the euro has slowed down, but it’s believed that it is still on track to an upward rally. The weak results from the Canadian economy are straining the strength of the Canadian dollar and are concerning investors. On the other hand, the gradual developments from the Eurozone’s manufacturing PMIs are helping the EURCAD gain altitude in sessions. Just recently, Germany’s manufacturing PMI for January reportedly rose from 43.7% to 45.3%, topping expectations of 45.2%. The Italian manufacturing PMI for January also climbed from 46.2% to 48.9%. The French manufacturing PMI also edged up from 51.0% to 51.1%. And the whole bloc’s manufacturing PMI surged from 46.3% to 47.9%.