Top Forex Market Movers of the Week (Oct. 10-14, 2016)

The forex trading week has come and gone. Time to take a look at what was driving forex price action. Were you able to profit from any of this week’s top movers?

Top Forex Weekly Movers (Oct. 10-14, 2016)

Top Forex Weekly Movers (Oct. 10-14, 2016)

Looks like Loonie strength is this week’s main strength, given that half of the Top 10 Movers of the week are Loonie pairs. So, what was driving forex price action on the Loonie and the other currencies this week?

CAD

USD/CAD: 1-Hour Forex Chart

USD/CAD: 1-Hour Forex Chart

CAD Pairs Ranked (Oct. 10-14, 2016)

CAD Pairs Ranked (Oct. 10-14, 2016)

The Loonie had a mixed performance last week, which implies that it was vulnerable to opposing price action. This week, however, the Loonie ended up dominating ALL its peers.

Loonie pairs were tracking oil’s price action for the most part, and it just so happens that oil benchmarks managed to end the week in the green.

  • U.S. crude oil up (CLG6) by 1.06% to $50.33 per barrel for the week
  • Brent crude oil up (LCOH6) by 0.13% to $52.00 per barrel for the week

As for what was driving oil’s price action, oil gained substantial strength on Monday, thanks to returning Chinese demand after the long holiday in China, according to market analysts. And as y’all can see on the chart above, many Loonie pairs were able to harvest the bulk of their gains on this day.

Oil later got another boost on Thursday, thanks to the Greenback’s slide, which made globally-traded commodities relatively cheaper and more attractive to buy. Demand for oil was sustained until Friday, likely because U.S. gasoline and oil distillate production dropped, as reported by the U.S. Energy Information Agency.

The Other Currencies

Okay, here’s how the other currencies fared this week:

GBP

GBP/USD: 1-Hour Forex Chart

GBP/USD: 1-Hour Forex Chart

GBP Pairs Ranked (Oct. 10-14, 2016)

GBP Pairs Ranked (Oct. 10-14, 2016)

 

Persistent Brexit-related jitters were likely weighing down on the pound throughout the week. There was a sudden recovery across pound pairs during Wednesday’s Asian session, thanks to reports that British PM Theresa May “backed down” and allowed the British parliament to vote on her plan for an actual Brexit. This apparently eased some of the Brexit-related jitters, particularly of a feared “Hard Brexit”. That report didn’t have a lot of sticking power, though, and so the pound resumed its downward slide.

AUD

AUD/USD: 1-Hour Forex Chart

AUD/USD: 1-Hour Forex Chart

AUD Pairs Ranked (Oct. 10-14, 2016)

AUD Pairs Ranked (Oct. 10-14, 2016)

Like the Loonie, the Aussie also had a mixed performance last week, but it also ended up as one of the strongest currencies this week. In fact, it was the second strongest currency after the Loonie.

Price action on the Aussie was like a roller coaster ride, as you’ll can see on the chart above. There was a very noticeable broad-based Aussie rally that started during Thursday’s London session, though. Strangely enough, the Aussie only had a commodities rally that was driver mainly by Greenback weakness going for it, as I noted in Thursday’s London session recap.

EUR

EUR/USD: 1-Hour Forex Chart

EUR/USD: 1-Hour Forex Chart

EUR Pairs Ranked (Oct. 10-14, 2016)

EUR Pairs Ranked (Oct. 10-14, 2016)

The euro got its butt kicked this week, and the broad-based rise in European equities was probably one of the reasons for that.

  • The blue-chip Euro Stoxx (STOXX50E) closed 0.82% higher to 3,025.19 for the week
  • Germany’s DAX (GDAXI) closed 0.85% higher to 10,580.38 for the week

I say it’s only one of the reasons because the euro was steadily sliding ever lower throughout the week, even though most of the major European equity indices suffered from a bout of risk aversion on Wednesday and Thursday.

Unfortunately, market analysts don’t really have a lot to say about the euro’s broad-based slide. In fact, those who do talk about the euro point out how weird it was that the euro just shrugged off the positive low and mid-tier economic reports that were released during the week.

However, it’s possible that we’re just seeing some preemptive positioning ahead of the ECB meeting next week. It’s also possible that Brexit-related jitters were weighing down on the euro. After all, an actual Brexit would also directly affect the Euro Zone.

USD

USD/JPY: 1-Hour Forex Chart

USD/JPY: 1-Hour Forex Chart

USD Pairs Ranked (Oct. 10-14, 2016)

USD Pairs Ranked (Oct. 10-14, 2016)

The Greenback was one of the stronger currencies this week. And strangely enough, the Greenback started advancing during Monday’s U.S. session. There were no catalysts at the time and the U.S. was observing the Columbus day holiday, which is why it was rather strange.

The likely explanation for this is follow-through buying after last week’s NFP report. If y’all can still recall last week’s Top Forex Market Movers, or if you were able to read up on Forex Gump’s review of the September NFP report, then you may already know that the NFP report was a total miss, but it was still enough to increase the probability of a December rate hike.

The Greenback then had a more mixed performance after the minutes of the September FOMC meeting got released, although the Greenback was giving back its gains for the most part, so forex traders probably used that as an opportunity for some profit-taking. By the way, Forex Gump has a write-up on the main takeaways from the September FOMC meeting minutes. You can read more on that here, if you’re interested.

NZD

NZD/USD: 1-Hour Forex Chart

NZD/USD: 1-Hour Forex Chart

NZD Pairs Ranked (Oct. 10-14, 2016)

NZD Pairs Ranked (Oct. 10-14, 2016)

The Kiwi had a mixed performance this week, albeit net positive overall. And Kiwi bulls can probably blame the Kiwi’s not-so-stellar performance to the broad-based Kiwi weakness on Monday and the early half of Tuesday. There was no apparent reason for that broad-based slide on Monday. However, it’s possible that it was just an extension of the previous week’s Kiwi slide.

The early drop on Tuesday, meanwhile, was very likely due to RBNZ Assistant Governor John McDermott’s speech, given that there wasn’t really anything else at the time. McDermott warned that: “The consumer price index (CPI) for the September quarter will be released next Tuesday, and it is widely expected to reveal continued low inflation.” Although he also said later that CPI is “expected to rise in the December quarter.”

McDermott also said that “monetary policy will continue to be accommodative” and that “Interest rates are at multi-decade lows, and our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range.” So, yeah, a pretty dovish speech overall.

CHF & JPY

JPY Pairs Ranked (Oct. 10-14, 2016)

JPY Pairs Ranked (Oct. 10-14, 2016)

CHF Pairs Ranked (Oct. 10-14, 2016)

CHF Pairs Ranked (Oct. 10-14, 2016)

Not really much to say for the yen, other than it was trading mostly sideways and had a mixed performance. It therefore appeared to be vulnerable to opposing currency price action. And while the Swissy looked like it was one of the weakest currencies during the week, the small percentage change on CHF/JPY is a good hint that there wasn’t a lot of interest on the Swissy as well.

Okay, here’s this week’s scorecard:

Scores (Oct. 10-14, 2016)

And here’s last week’s poll results:

Last Week's Poll

The 3.23% who voted for the Loonie got it right, although the 6.45% who voted for the Aussie and  the 35.48% of you who voted for the Greenback also did well. Even the 3.32% who voted for the Kiwi would have been net profitable, assuming you spread your trades around. Unfortunately, there were 12.9% who voted for the pound and 19.35% who voted for the euro. Hopefully, you were able to switch your bias during the course of the week, although switching bias on the euro would have been trickier.

So,now that you know what the likely drivers were this week, and having taken a look at the forex calendar for next week, which currency do you think will come out on top next week? Vote in the poll below!