Major Currencies Overview
The Greenback had a mixed week but managed to end up a net winner except against the Loonie and yen. The ongoing trade spat with China made things a bit more complicated, but strong data still gave some support.
The FOMC minutes release might just be the main event for the dollar this week, but further actions from either the U.S. or China could lead to swings in either direction. Read more.
Three cheers for the Loonie! The Canadian currency marked its third consecutive winning week, shrugging off trade war jitters and even weaker oil prices.
There’s not much in the way of top-tier catalysts from Canada this week, though, so it remains to be seen whether or not the Loonie can keep banking on positive NAFTA developments. Read more.
EUR & CHF
The franc and shared currency seemed a tad more sensitive to its counterparts’ risk sentiment flows as a slightly better mood in the markets lifted the pound and comdolls instead.
Euro traders could hold out for the release of the ECB minutes this week, although the lack of any tightening hints could usher in some disappointment. Read more.
Sterling had a mostly positive run in the previous week despite downbeat PMI readings. Still, it managed to gain ground ahead of Carney’s speech and take advantage of dollar weakness on the disappointing NFP.
Carney has another speech lined up for this week and the U.K. manufacturing reports are due, which should bring in more pound action in the next few days. Read more.
Despite the pickup in risk-taking, the Aussie actually had a mixed run and broke free from its correlation with gold last week. Still, a slightly more optimistic RBA minutes provided some support.
The only catalyst from Australia this week is RBA head Lowe’s testimony, which suggests that the currency could keep taking cues from sentiment related to the trade spat between the U.S. and China. Read more.
Kiwi bulls charged for yet another week, scoring another round among the top performers as risk appetite took hold. Not even the drop in dairy prices was enough to keep it down!
Risk sentiment could continue to affect Kiwi price action this week as there are no major reports lined up from New Zealand. Can it chalk up its third winning week? Read more.
Charts to Watch:
With the ECB minutes up for release this week, this pair might either resume its bounce or make another test of the long-term channel bottom. Stochastic is suggesting that buyers are still in control, but disappointment over the lack of tightening hints could weigh on the shared currency once more.
The FOMC minutes are also up for release this week, likely spurring more volatility for dollar pairs. This particular one has been trending higher for the past few weeks and might be due for a correction to the area of interest around the .9550 minor psychological support.
Here’s another potential dollar play, and one that bears might like! USD/CAD is forming a small head and shoulders pattern on its 4-hour time frame and appears to have breached the neckline already. Stronger oil prices and downbeat FOMC minutes could give it another push lower, possibly sending it down by the same height as the chart formation.