Greenback soars as peer currencies stumble

The Japanese yen rose after the BOJ delivered its interest rates decision. The bank left interest rates unchanged at the current minus 0.1% level. It also said that it will continue buying the Japanese Government Bonds (JGBs) so that the 10-year bonds can remain at or near zero. What lifted the yen was the bank’s forward guidance on when it could raise interest rates. The bank said that the current rates could remain ‘at least until Spring 2020. In the previous meetings, the bank had avoided talking about when it will hike.

The Canadian dollar continued to weaken against the USD after the BOC made its interest rates decision yesterday. As expected, the bank left rates unchanged at the current level of 1.75%. In the press conference, the BOC chairman, Stephen Poloz said that the economy grew at a lower rate in the first quarter. He also highlighted some of the things that the BOC was watching. These were the oil and gas sector, housing sector, trade policies and several fiscal announcements made by the federal and provincial governments. What pushed the CAD lower was the bank’s indication that rates could remain unchanged for an extended period.

USD strength continued as the other peer currencies slumped. The USD index is now trading at the highest levels this year. This is happening because of the Weaker Euro, Sterling, Aussie, Kiwi, and Swedish krona. Investors have increased their confidence with the US because of the strong earnings season. Today, the initial jobless claims of 230K were worse than the expected 199K. The continuing jobless claims of 1,655k were better than the expected 1,699K. In March, durable goods orders rose by 2.7%, which was higher than the expected 0.7% while the core durable goods orders rose by 0.4%. These numbers coupled with the strong earnings season are an indication that the US economy is doing well.

EUR/USD

The EUR/USD pair continued declining, reaching an intraday low of 1.1132. This was the lowest level since June 2018. On the daily chart below, this price is below the 25-day and 50-day moving averages. The RSI has moved closer to the oversold level while the momentum indicator has started to decline. The Parabolic SAR dots are above the current price. This means that the pair will likely continue to decline, with the next support being the 1.1100 level.

USD/JPY

The USD/JPY pair declined sharply to an intraday low of 111.73. On the thirty-minute chart, the pair has formed an inverted V pattern. The current price is below the 25-day and 50-day moving averages. The price is between the lower and middle lines of the Bollinger Bands. It is also along the previous channel, which is shown by the green lines below. The pair could continue declining, to test the important support of 111.70.

AUD/USD

The AUD/USD pair continued the declines started earlier this week after the country released weaker inflation numbers. The pair reached a low of 0.6990. On the daily chart, this price is below the 50-day and 100-day moving averages. The RSI is approaching the oversold level of 30, which means that the pair has more downward room to go. As such, the pair could continue moving lower, with the next support level being 0.6800.