Federal Reserve issue emergency interest rate cut
The US Federal Reserve issued an emergency 50 basis point interest rate this week as the central bank reacted to the potential economic implications of the coronavirus. The 50 basis point rate reduction was the first emergency interest rate cut by the Federal Reserve since the 2008 financial crisis. The market reaction saw the US dollar plunging, stock markets rising, and gold prices surging higher. The US dollar remained on the back foot after the unexpected rate cut, as traders and investors speculated that the FED may bring US rates close to zero.
- The USDJPY pair is only bullish while trading above the 108.60 level, key resistance is found at the 109.10 and 110.70 levels.
- If the USDJPY pair trades below the 110.00 level, key support is located at the 106.50 and 104.50 levels.
Bitcoin attempted to stage a recovery above the $9,000 level this week after a series of positive regulatory news from Indian and Asia. Bitcoin found strong technical support from the $8,400 at the start of the new trading month after a bearish February price is close. BTCUSD bulls starting to gain traction as the week progressed, while news that India lifted its ban on cryptocurrency trading gave the crypto market a boost. Bitcoin’s hash rate also hit a new all-time high this week, this is important as it shows that crypto miners are still bullish towards Bitcoin at current levels.
- The BTCUSD pair is only bullish while trading above the $9,200 level, key resistance is found at the $10,000 and $10,700 levels.
- The BTCUSD pair is only bearish while trading below the $9,200 level, key support is located at the $8,400 and $8,000 levels.
The Bank of Canada cut interest rates by 50 basis points this week, as the central bank followed the US Federal Reserve and other global central banks. The Canadian dollar fell to a fresh 2020 low against the US dollar after the larger-than-expected rate cut from the central bank. The Bank of Canada stated that the rate cut was needed to shore up the domestic economy due to ongoing negative impacts from the spread of the coronavirus. Falling oil prices are also currently hindering the Canadian economy, with crude oil reaching a multi-year low this week, of $44.00 per barrel, as supply increases take as demand for oil craters across the globe.
- The USDCAD pair is only bearish while trading below the 1.3330 level, key support is found at the 1.3290 and 1.3200 levels.
- If the USDCAD pair trades above the 1.3330 level, buyers may test towards the 1.3550 and 1.3750 resistance levels.
The EURUSD continued to surge across the board this week as traders pushed the pair to fresh multi-month trading high. The euro currency gained broadly this week against the US dollar, British pound, Canadian dollar, New Zealand dollar, and Australian dollar. The move higher marks a huge turned around for the euro currency, after it slumped to multi-year lows against the US dollar and British pound last month. Traders are now looking to the next ECB policy meeting, in case the central bank offers additional QE to help struggling eurozone countries battle the coronavirus.
- The EURUSD pair is only bearish while trading below the 1.1090 level, key support is found at the 1.1060 and 1.0990 levels.
- If the EURUSD pair trades above the 1.1090 level, buyers may test towards the 1.1240 and 1.1310 resistance levels.