• USD/JPY is bouncing sharply from the 2020 lows as DXY demand is relentless.
  • The level to beat for bulls is the 111.00 figure. 
 

USD/JPY daily chart

USD/JPY is rebounding sharply from the 2020 lows while breaking above the 110.00 handle and trading above the main SMAs on the daily chart. Investors are hoarding USD as the demand remains unabated.  

 

USD/JPY four-hour chart

 
USD/JPY broke above the 110.00 figure and the 200 SMA on the four-hour chart. As the bulls remain firmly in control the market is seen extending its gains towards the 111.00 and 112.00 levels in the coming sessions. Support can be seen near the 109.00/108.50 price zone and the 107.55 level on the way down.
 
 
Resistance: 108.60, 109.00, 112.00
Support: 107.55, 106.90, 106.00
 
 
 

Additional key levels

 

  • Crude oil prices had one the worst selloff in history plummeting to near $20 a barrel in the last four weeks.
  • WTI appears to be stabilizing after the carnage but remains vulnerable to the downside.
 

Oil weekly chart

 
WTI collapsed abruptly in the last four weeks as the barrel plunged to its lowest since February 2002. 
 
 

Oil daily chart

 
WTI is trading within Wednesday’s range, consolidating the violent selloff. However, given the strong bearish pressure, it remains to be seen if WTI can regain some poise or if bears will come back and bring the market to new lows pretty soon. 

Oil four-hour chart

 
The market remains under strong selling pressure below the main SMAs as bears are looking for an extension of the selloff below the 22/20 price zone with scope to the 16 level on the way down. On the flip side, bullish will try to gather momentum above the 24 resistance with the idea to potentially reach the 28 and 32 price levels on the way up. 
 

Additional key levels

 

  • Crude oil prices had one the worst selloff in history plummeting to near $20 a barrel in the last four weeks.
  • WTI appears to be stabilizing after the carnage but remains vulnerable to the downside.
 

Oil weekly chart

 
WTI collapsed abruptly in the last four weeks as the barrel plunged to its lowest since February 2002. 
 
 

Oil daily chart

 
WTI is trading within Wednesday’s range, consolidating the violent selloff. However, given the strong bearish pressure, it remains to be seen if WTI can regain some poise or if bears will come back and bring the market to new lows pretty soon. 

Oil four-hour chart

 
The market remains under strong selling pressure below the main SMAs as bears are looking for an extension of the selloff below the 22/20 price zone with scope to the 16 level on the way down. On the flip side, bullish will try to gather momentum above the 24 resistance with the idea to potentially reach the 28 and 32 price levels on the way up. 
 

Additional key levels

 

  • Mexican peso recovers versus US dollar, still among the worst performers in the market. 
  • USD/MXN drops to 23.93 but rebounds to 24.00.

The USD/MXN is rising again on Thursday but it moved off highs over the last hours. Earlier it climbed to 24.64, the new record high before making a correction. 

The pair dropped further following the announcement of new swap lines between the Federal Reserve and more central banks, including the Bank of Mexico. Also, the recovery in crude oil prices and in Wall Street is helping emerging market currencies. 

Still, the Mexican peso remains among the worst performers across the globe. Even as of writing, USD/MXN is up for the day. Mexican yields continue to slide and expectations about the economic performance of the country get worse day by day. 

USD/MXN forecast chart 

Volatility is set to hold at extreme levels over the next hours. A decline under 24.00 could point to an extension of the correction. The next support stands at 23.50 and below the 22.50/70 area (uptrend line) should limit the decline. USD/MXN is near the upper limit of a steep ascendant channel, suggesting more gains could face resistance between 24.50/70. If the pair break above 24.70, another leg higher to 25.00 and more, looks likely. 

USD/MXN

 

  • Mexican peso recovers versus US dollar, still among the worst performers in the market. 
  • USD/MXN drops to 23.93 but rebounds to 24.00.

The USD/MXN is rising again on Thursday but it moved off highs over the last hours. Earlier it climbed to 24.64, the new record high before making a correction. 

The pair dropped further following the announcement of new swap lines between the Federal Reserve and more central banks, including the Bank of Mexico. Also, the recovery in crude oil prices and in Wall Street is helping emerging market currencies. 

Still, the Mexican peso remains among the worst performers across the globe. Even as of writing, USD/MXN is up for the day. Mexican yields continue to slide and expectations about the economic performance of the country get worse day by day. 

USD/MXN forecast chart 

Volatility is set to hold at extreme levels over the next hours. A decline under 24.00 could point to an extension of the correction. The next support stands at 23.50 and below the 22.50/70 area (uptrend line) should limit the decline. USD/MXN is near the upper limit of a steep ascendant channel, suggesting more gains could face resistance between 24.50/70. If the pair break above 24.70, another leg higher to 25.00 and more, looks likely. 

USD/MXN

 

EUR/USD has dropped below 1.07, to the lowest levels since 2017. The greenback is enjoying fresh demand. The greenback is the world’s reserve currency and when investors are stressed, they flock to the American currency. There are several support lines on the way to the 2017 trough of 1.0340. 

The European Central Bank announced a new bond-buying scheme worth €750 billion, initially sending the euro higher as additional help to governments allows them to unleash stimulus. However, the move is mostly driven by the dollar. Stocks are recovering but the trend remains to the downside. 

Here is how the recent moves look on the chart. Volatility is extremely high with euro/dollar already experiencing a range of nearly 300 pips on the day. 

More Coronavirus market turmoil explained: Dollar, stocks, gold, oil, and more

EUR/USD has dropped below 1.07, to the lowest levels since 2017. The greenback is enjoying fresh demand. The greenback is the world’s reserve currency and when investors are stressed, they flock to the American currency. There are several support lines on the way to the 2017 trough of 1.0340. 

The European Central Bank announced a new bond-buying scheme worth €750 billion, initially sending the euro higher as additional help to governments allows them to unleash stimulus. However, the move is mostly driven by the dollar. Stocks are recovering but the trend remains to the downside. 

Here is how the recent moves look on the chart. Volatility is extremely high with euro/dollar already experiencing a range of nearly 300 pips on the day. 

More Coronavirus market turmoil explained: Dollar, stocks, gold, oil, and more

Australia is set to slip into recession in 2020 while the Aussie dollar will find find support in fading USD strength, according to analysts at Standard Chartered Bank.

Key quotes

“We lower our growth forecast for Australia to 0.2% in 2020 (from 2.2% prior) following the more widespread coronavirus outbreak than earlier anticipated. We see negative quarterly GDP growth in Q1, Q2 and Q3, before a mild recovery in Q4.”

“We forecast average inflation at 1.8% in 2020 (from 2.1%) and 1.1% in 2021 (from 2.3%).”

“We expect the AUD to find support in fading USD strength as the Fed and global central banks step in with greater determination to push real yields lower and address other liquidity stresses.”