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The euro thought it had it at first, but the Swiss franc was quick to regain composure, spoiling the plans of bulls of running away with a recovery. Since the last month of 2019, the EURCHF has been stuck in a tight downtrend and the pair is still expected to gradually inch downwards in coming sessions. It’s believed that the pair will extend lower to its support levels by the latter half of the month as the Swiss franc gains momentum thanks to its glowing safe-haven appeal. The recent emergency rate cut of the US fed may have helped unleash hope to bulls, but unfortunately, it wasn’t enough to stop the Swiss franc from gaining against the single currency. Perhaps the recently released poor results from some economies from the bloc further strained the strength of the euro. Yesterday, Berlin reported weak results from its retail sales report, composite PMI, and services PMI, which were coupled with contractions in France and Italy’s economy.
After the GBPJPY broke its patter, bears have consistently held on the wheel and have successfully floored the pair lower. Fortunately for bears, the pair is still widely believed to continue its downward run in the coming sessions despite the attempts of recovery from the British pound. It’s projected that the pair will eventually reach its support levels by the latter half of the month. After the United States Federal Reserve unleashed an emergency rate cut, more investors are starting to get attracted to the Japanese yen. It’s also worth mentioning that the contraction reported from the United Kingdom’s economy may have also weighed on the pair. Yesterday, official data from Britain showed that the February PMI unexpectedly slipped from 53.3% to 53.0%, catching investors off guard as they were only expecting it to remain stagnant. Meanwhile, the UK’s February services PMI fell from 53.9% to just 53.2%, falling lower than the projected 53.3%.
It’s a rough tug of war between the Japanese yen and the US dollar, however, this tug of war is already expected to land in favor of the Japanese yen. Bears are holding on to their momentum that was further supported by the emergency rate cut from the United States Federal Reserve. Bulls were, however, able to resist in yesterday’s trading after the ADP non-farm employment change and the ISM non-manufacturing PMI for February showed better than expected results, supporting the greenback in yesterday’s sessions. Unfortunately, as the non-farm payroll results get nearer this Thursday, the greenback is seen losing again against the Japanese yen. Bears are reacting to the slightly lower US stock indices yesterday and the drop in treasury yields, resulting in a favorable run for them in trading sessions. Also, the contractions recorded by the Japanese economy is being brushed off by its safe-haven appeal and the weaker dollar.
The mixed results from Switzerland’s gross domestic product and consumer price index were brushed off thanks to the recent rate cut of the US Fed this week. The aforementioned cut drained the gas tanks of bulls, preventing them from making a recovery in sessions. It’s believed that the USDCHF pair will touch down to its support levels by the middle half of the month. Yesterday, bulls momentarily saw green territories following the better-than-expected results showed by the ADP non-farm employment change and the ISM non-manufacturing PMI. However, their rally was cut short as the concerns about the weak projections for the non-farm payrolls report are weighing in on the performance of the greenback in sessions. It’s believed that the results from Friday’s report would either make it or break it for the USDCHF pair. The non-farm payrolls are expected to drop from 206K to just 160K for the month of February.