Ayayay! To say that a lot of things happened in the markets last week would be an understatement. A HECK load of factors moved currencies! And you know what, I think this week is gonna get even more interesting.
To say that a lot of things happened in the markets last week would be an understatement. A HECK load of factors moved the majors!
For one, a slew of economic reports were released. Worse-than-expected data like the manufacturing production report from the U.K. and the industrial production report from the euro zone sent the pound and the euro lower. Meanwhile, positive consumer spending data from the U.S. boosted the dollar.
While the pound was able to pare some of its losses on profit-taking, a couple of bond auctions from Spain and Italy only added to the euro’s troubles. Both governments saw lower yields but there was dismal demand for their bonds.
Over the weekend, talks about how Cyprus will go about its bailout strategy have dominated headlines. In my own humble opinion, we could see this dominate price action in the next few days. The region’s debt issues have taken a backseat to concerns about economic growth. Now that it has slowly crept back into the spotlight, bad news from Cyprus may just fuel the euro sell-off even further.
GBP/USD: Slightly Bullish
Looking at the hourly time frame of GBP/USD, we see that the pair could soon pull back some of its losses back to 1.5000 and test the Fibonacci retracement levels and MAs. I’m not the biggest fan of the pound, but if reversal candlesticks materialize between the 38.2% and 50% Fib levels, I’ll go long.
Last week, I had a trade idea on USD/CHF playing the upside break. Unfortunately, the trade did not materialize, as the pair broke out to the downside instead! With the pair trading below both the 200 and 100 SMAs, I think the bias has shifted to bearish from bullish. I’m watching this pair carefully, as I believe a test of the 50% Fibonacci retracement level and the SMAs could present a good opportunity to short.
Those are the two pairs I’ll be watching this week folks. Stay tuned just in case I decide to take either one of them!