• NZD/USD fails to hold onto recovery gains.
  • Wednesday’s bullish spinning top suggests buyers’ exhaustion.
  • 23.6% Fibonacci retracement offers nearby support.

Having portrayed buyers’ exhaustion the previous day, via bullish spinning top, NZD/USD remains weak around 0.5840, down 0.18%, amid the early Thursday.

While 10-day SMA restricts the pair’s immediate upside, 23.6% Fibonacci retracement of its yearly fall limits the nearby declines.

However, the bearish MACD coupled with the pullback signaling candlestick formation indicates further downside past 0.5770 immediate support.

In doing so, 0.5670 and 0.5590 may offer intermediate halts before the monthly low near 0.5470.

Meanwhile, an upside clearance past-10-day SMA level of 0.5845 can accelerate the recovery moves towards 0.5930 and 0.6000 during the further advances.

NZD/USD daily chart

Trend: Pullback expected

 

The US Chamber of Commerce said on Wednesday, the government should refrain from adopting export controls or other measures that could impede the movement of medicines and other essential goods needed to combat the coronavirus pandemic, as cited by Reuters.

Chamber Executive Vice President Myron Brilliant said: “To date, the U.S. has laudably refrained from imposing export controls on these goods, and we urge the United States to continue to avoid such measures, which would immediately undermine U.S.-based production of medical supplies.” 

  • US coronavirus cases jump by 12,000 in one day, death toll tops 1000
  • USD/IDR’s daily candles show the pair has is trapped in a narrowing price range. 
  • A range breakout above 16,500 is needed to put the bulls into the driver’s seat.

USD/IDR is currently trading near 16,300, representing a 1.3 percent daily decline in Indonesia’s Rupiah.

While the pair is better bid, it is still trapped in a contracting range represented by the consecutive inside day candles created over the previous two trading days.

An inside day candle occurs when the size of the daily candle fits within the range of the preceding day’s candle and indicates consolidation or indecision in the market place.

As a result, the next move depends on the direction in which the range is breached. A close above Wednesday’s high of 16,500 would imply range breakout, while acceptance under Wednesday’s low of 16,027 would confirm range breakdown.

Daily chart

Trend: Neutral

Technical levels

 

  • USD/CAD recovers from the weekly low following two days of declines.
  • US dollar pulls back amid the political drama at the US Senate, coronavirus updates.
  • WTI remains mildly positive, US data, voting on the COVID-19 bill become the key.

With the risk-off re-entering the markets, USD/CAD bounces off the weekly low to 1.4250, up 0.40%, during the initial treading hours of Thursday. Uncertainties surrounding the US COVID-19 Bill as well as coronavirus updates could be cited as the main catalysts for the latest risk aversion.

Despite agreeing over the $2.2 trillion aid package the previous day, the US policymakers are unclear about the execution while the Democrats show disappointment and signal amendments. The same could delay the final voting on the much-awaited stimulus bundle that the Republicans signaled to arrive soon.

On the other hand, coronavirus (COVID-19) worries are also drawing fresh strength from Japan and the UK. The latest stats from Britain suggest the pandemic is ignoring the government’s efforts to combat the disease while the US continues to struggle with the virus hitting New York.

WTI seems to take clues from the geopolitical tension between the west and the Middle East as well as the latest inventory numbers but seems to weigh on the Loonie pair.

While portraying the risk-tone the US 10-year treasury yields slip five basis points (bps) to revisit near 0.80% mark whereas stocks in China and Japan turn negative again.

Moving on, traders could keep eyes on the US Senate developments and the virus updates for the short-term direction while the likely sharp run-up in the US Jobless Claims makes the weekly reading important.

Technical Analysis

The pair needs to regain its place beyond a 10-day SMA level of 1.4280 to revisit 1.4350 and 1.4530 numbers to the north. Until then, odds of its drop to the sub-1.4000 region can’t be ruled out.

 

In an interview early Thursday, US Treasury Secretary Mnuchin expressing his take on the coronavirus relief bill to be presented for voting soon.

Mnuchin said it’s a great deal both for Trump and the economy.

Further, he said that he is focused on delivering money quickly to Americans.

  • Risk-off as rumour has that US Senate vote not agreed to yet, COVID-19 weighs heavy
  • US treasury bonds offer negative yields
  • US stock futures drop, pushing USD/JPY to session lows below 110.50. 
  • Wednesday’s inside day candle has made Thursday’s close pivotal. 

The anti-risk Japanese yen is prolonging its bullish move seen in early Asia amid losses in the US stock futures.

The USD/JPY pair fell to a session low of 110.45 a few minutes before press time and is currently trading near 110.60, representing a 0.5 % drop on the day.

The spot violated the psychological support of 111.00 during early Asian trading hours after risk sentiment soured in response to news reports that the US Senate was grappling with last-minute hurdles and struggling to pass the $2 trillion coronavirus stimulus bill on Wednesday evening.

However, fresh reports released an hour ago said the Senate is on track to vote on the bull. Even so, the risk-off sentiment strengthened, pushing the futures tied to the S&P 500 futures lower. At press time, the index futures are reporting a 1% decline.

Selling in both stocks and USD/JPY will likely gather pace if the Senate fails to approve the bill, which has already been delayed by four days. It’s worth noting that the coronavirus outbreak in the US and across Europe is showing no signs of slowing down. While the Federal Reserve’s unlimited bond purchase program has bought time, progress on the fiscal front is needed soon.

Today’s close pivotal

USD/JPY witnessed two-way business on Wednesday but traded well within Tuesday’s high and low. The resulting inside day Doji candle implies consolidation in the narrowing price range.

As a result, the next move depends on the direction in which the range is breached. A close above Wednesday’s high of 111.68 would confirm a bullish breakout, while a close under 110.75 (Tuesday’s low) would imply a range breakdown.

Technical levels

 

 

  • USD/CHF remains on the back foot.
  • The weekly resistance line guards the immediate upside.
  • 200-bar SMA question sellers below the short-term support line.

While extending its pullback moves from 0.9900, triggered during the early-week, USD/CHF drop to 0.9755, down 0.15%, amid the Asian session on Thursday.

The pair currently drops towards the monthly support line, at 0.9690, a break of which could again shift the market’s focus on a 200-bar SMA level of 0.9660.

If bears fail to respect the key SMA, 50% Fibonacci retracement level of the monthly run-up, at 0.9540, will be the key to watch.

On the contrary, the pair’s break above the weekly resistance line of 0.9810 could trigger fresh recovery moves that target 0.9900.

Also, the pair’s sustained rise past-0.9900 could challenge November 2019 high around 1.0025.

USD/CHF four-hour chart

Trend: Pullback expected

 

The Korea Centers for Disease Control and Prevention said that South Korea confirmed 104 new coronavirus cases on early Thursday, with the total tally at 9,241.

Five more deaths were reported, taking up the death toll to 131.

414 more fully recovered coronavirus patients were released, total cured people stood at 4,144, the body added.

Among other updates, the US total count has reached 68,568 cases, with 1,035 deaths confirmed so far.  

The New York state saw a surge in the number of infections by 69% from Monday, bringing up the total tally at 3,750. Meanwhile, the Colarado state issued a state-wide stay-at-home order.

Meanwhile, Japanese Health Ministry announced in the last minutes, the country confirmed 98 new virus cases and two new deaths. The total count stands at 2,003, with 712 of those were from the Diamond Princess cruise ship. The death toll is at 55, with 10 on the ship.

Singapore set a new record daily, with 73 new cases reported vs. 54 previous. The total number of COVID-19 cases are higher at 631.

India’s tally stands at 606, including 10 deaths.

  • China’s Hubei province reports total of 67,801 coronavirus cases and 3,169 deaths at end of March 25

Market reaction

Markets turned sour in Asia this Thursday following reports that some US Some legislators on both sides of the aisle still threatened to hold up the US coronavirus relief bill.

The US equity futures tumbled with the Asian equities and Treasury yields while USD/JPY dropped sharply below 111.00. The Aussie slumped over 1% to test 0.5870 levels.

Markets do not know whether they are coming or going – the situation is fluid. We are in unchartered waters and COVID-19 is showing little proven sign that it’s about to go away and not get a lot worse. Meanwhile, the US cannot get any stimulus to US citizens nor companies until the US Senate votes on a mammoth $2 trillion coronavirus rescue package. Rumour has it that they cannot even agree on a time to vote and this appears to be weighing on markets with the Nikkei now down -2% at the time of writing and US Eminis bleeding out in the red following a positive start in the open. 

More to come…