Start your trading prep with a quick review of last week’s forex action from my buddy Pip Diddy, an overview of catalysts lined up for the major currencies, and the charts to watch this week.
Major Currencies Overview
The State of the Union address and the FOMC decision barely influenced dollar direction last week, but the scrilla made a strong rebound after the NFP results were released.
This week, it could take the back seat or simply act as a counter currency since the spotlight shifts to other major economies with more top-tier events lined up. Think we’ll see the selloff resume? Read more.
NAFTA jitters were still in play for the Loonie as the sixth round of talks carried on without much progress. The lack of top-tier data from Canada then and the breaking correlation with crude oil also didn’t help the Loonie find its direction.
This week, all eyes and ears could be on the Canadian jobs report, which won’t be out until Friday. Read more.
EUR & CHF
Ramped up ECB tightening expectations and a strong showing among European equities were mostly responsible for the shared currency’s bullish run last week. The franc didn’t lag too far behind either, as it continued to rake in risk-off flows.
There’s not much in the way of top-tier data from both the euro zone and Switzerland this week, which suggests that their price action could be driven by sentiment again. Read more.
Brace yourselves for Super Thursday this week! That’s right, the BOE will be sharing its monetary policy decision, MPC meeting minutes, and Inflation Report.
No actual policy changes are expected, but traders are keen to find out when the next rate hike might be. After all, inflation has been above target while the U.K. economy has shown signs of resilience. Read more.
Bond yields and sentiment are starting to become regulars in driving yen pairs around for the past few weeks. Without any major reports on deck for Japan, the currency could take its cue from dollar price action or risk appetite again. Read more.
The Aussie was one of the worst performers in the previous week as bulls were mostly unimpressed by the latest round of major reports from the Land Down Under.
The RBA will be making its monetary policy announcement this week and even though no rate changes are expected, AUD could be extra sensitive to any shift in tone from the central bank. Retail sales and trade balance figures are lined up, too! Read more.
Risk sentiment was also the main driver of Kiwi price action for the previous week, which meant a lot of tossing and turning for the higher-yielding currency.
There are a couple of must-see events for the Kiwi this week, namely the quarterly jobs release and the RBNZ interest rate decision. Will they shift to a more hawkish bias this time or still stay neutral? Read more.
Charts to Watch:
Trust USD/JPY to respect technical levels! Price bounced off its range support once more and may be setting its sights on the resistance again.
However, there are a few barriers that it has to clear on its way up, particularly the mid-range area of interest and the short-term falling trend line. Check out how Huck plans on playing this USD/JPY setup.
Classic break-and-retest play right here! AUD/CAD is starting to trend higher and is currently finding support at the bottom of a new ascending channel, which lines up with the 61.8% Fib and an area of interest.
Stochastic is already on the move up to signal that buyers are ready to jump back in, but this could all hinge on the RBA decision and top-tier Australian reports. Happy Pip has her eye on this play, too!
If you prefer momentum setups, here’s one that’s not too late to catch on NZD/CHF. The pair has been trending lower for quite some time and has just recently breached the mid-channel support, opening the path for a move down to the very bottom around .6600. Better keep close tabs on New Zealand’s jobs figures and the RBNZ decision if you’re trading this one, though.