It’s gonna be a relatively light one, forex fellas! Several markets are set to close for the Holy Week holidays on Thursday and Friday, which means plenty of opportunities for profit-taking before the end of the month.
Major Currencies Overview
Traders showed no love for the Greenback in the past week as the FOMC statement failed to impress the bulls. To add to that, trade war jitters and another episode of The Apprentice contributed to its declines.
A handful of FOMC members have speeches lined up this coming week and the final Q4 2017 reading will be printed, but something tells me that risk sentiment and geopolitical risks could have more to do with dollar action. Read more.
Surprise, surprise! After another shaky start, the Loonie actually finished ahead of the pack thanks to surging crude oil prices in the latter half of the week.
Canada is still set to print its monthly GDP reading before Canadian markets close for the holiday. Apart from that, the Loonie could take cues from crude oil and market sentiment as usual. Read more.
EUR & CHF
Only medium-tier reports are left for release from the euro zone in the next few days while the franc has an empty schedule. This ain’t all bad for the franc, though, as it tends to benefit from risk-off flows and dollar weakness.Read more.
Sterling caught a few more gains thanks mostly to the Brexit deal announcement early on and finished as the second best-performing currency of the previous week.
Pound traders might take it easy this time around as there are no top-tier reports on deck. Of course the usual slew of Brexit headlines could still push GBP pairs around, so make sure you watch out for those! Read more.
Geopolitical risks returned to give the lower-yielding boost against most of its higher-yielding rivals, except against the pound and Loonie. Dollar weakness on trade war fears allowed the yen to take most of the risk-off flows.
There are still a number of medium-tier reports due from Japan right up until the end of the week, which suggests that yen pairs could stay active while the rest of the major currencies take a break. Read more.
Trade war jitters weighed heavily on the Aussie during the latter half of the week as protectionist measures would hit its main trading buddy, China, hardest after all. Heck, not even the pickup in safe-haven gold prices was enough to keep the higher-yielding currency afloat!
The lack of top-tier data from the Land Down Under this week could leave the Aussie vulnerable to risk sentiment swings once more. In particular, escalating trade tensions between China and the U.S. could drag the comdoll lower. Read more.
The Kiwi joined its buddy the Aussie in the losers’ bench as it also reeled from trade war concerns after its post-RBNZ rally. It didn’t help that the dairy auction didn’t exactly churn out positive figures either!
There are no major reports lined up from New Zealand for this week, which suggests that the Kiwi could move to the tune of market sentiment as well.
Looks like a textbook break-and-retest right here! USD/CHF is hitting resistance at a former support around the 50% Fib level and might resume the drop as stochastic turns south. A larger correction could hit a ceiling at the 61.8% level near the descending trend line on this 4-hour chart.
What seemed like a descending triangle last week is looking more like a symmetrical one this time. EUR/USD is currently testing the triangle resistance and might stay in consolidation mode for the shortened trading week, which could mean opportunities to catch quick bounces.
Last but not least is this simple descending channel on the 4-hour time frame of NZD/USD. Price seems to be gearing up for another test of resistance, which might be a prime opportunity to short until the channel support. Then again, the mid-channel area of interest might be enough to keep gains in check as stochastic nears overbought levels!
About Forex Gump
I throw macroeconomics, forex trading, pop culture, and everyday life into a pot and hopefully, the final product are lessons about the FX market that's easy to understand.
[Michael Marcus – another top trader] taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgement, being wrong, making your next best judgement, being wrong, making your third best judgement, and then doubling your money.Bruce Kovner