Market Turmoil Continues as Central Banks Fail to Ease Panic

Equities’ Bloodbath Resumed Yesterday, Even After Bold Central Bank Actions

The dollar traded higher against most of the other G10 currencies on Monday and during the Asian morning Tuesday. It gained the most versus AUD, CAD, and GBP in that order, while it underperformed versus EUR and CHF. The greenback was found virtually unchanged against JPY.

AUD/JPY — Technical Outlook

AUD/JPY continues to move lower, as the markets are feeling the heat and investors are seeking safe havens, such as the Japanese yen. The pair is still trading below a short-term downside resistance line taken from the high of March 5 th. Yesterday, the rate made a new March low, hitting the 64.05 hurdle and then rebounding slightly. Even if we see a move higher in the near term, that could still be classed as a temporary correction before another leg of selling, especially if AUD/JPY remains below the above-mentioned downside line.

NZD/CHF — Technical Outlook

NZD/CHF is still trading near its historic lows, while balancing below a short-term downside resistance line drawn from the high of February 25 th. After last week’s sharp decline, where the pair tested the 0.5494 level, it managed to rebound and is now balancing above a key area of support, at 0.5662. Given that NZD/CHF is already quite overstretched to the downside, we may see another small correction before the next leg of selling, hence why we will take a cautiously-bearish approach for now.

As for the Rest of Today’s Events

During the European morning, we have the UK employment data for January. The unemployment rate is expected to have remained unchanged at 3.8%, while average weekly earnings including bonuses are forecast to have accelerated to +3.0% yoy from +2.9%. The excluding bonuses rate is anticipated to have remained unchanged at +3.2%. We don’t believe that this set of data will prove so determinant with regards to the BoE’s future course of action, as they refer to a period before the fast spreading of the coronavirus around the globe.

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