Major Currencies Overview
The Greenback capped off three consecutive winning weeks as it ended up with a mixed performance last time. Risk sentiment and geopolitical tensions seemed the main themes then, with the safe-haven currency unable to hold on to its gains when the tide turned mid-week.
There’s not much in the way of top-tier data in the next few days, which suggests that risk appetite and bond yields could continue to push the dollar around. Better keep tabs on the Iran situation to glean more clues! Read more.
Surging crude oil prices kept the Loonie in a bullish mood for the most part of the week as expectations of output disruptions in the Middle East kept global oversupply concerns in check.
This correlation could hold up for the next few days on the lack of major data, but the attention could return to fundamentals before the end of this week as Canada is scheduled to print its retail sales and CPI figures. Read more.
EUR & CHF
The shared currency chalked up another week of net losses since falling European bond yields and political troubles in Italy came to light. The franc also had a mixed round but saw a few more wins on risk aversion.
The first few days of the week could be a bit more exciting, with some medium-tier reports lined up and a speech by Draghi also on the docket. Read more.
Super Thursday didn’t turn out too super for pound bulls last week as the BOE statement was a tad more downbeat than expected while the Inflation Report contained some negative revisions.
U.K. jobs data are on this week’s set, with the claimant count and average earnings index slated to show weaker readings. However, Brits could be a bit more chipper this week as the Royal Wedding is drawing near. Read more.
Flipping risk sentiment kept yen pairs on edge for the past week, although the lower-yielding currency managed to take advantage of geopolitical tensions and dollar weakness.
There are a few medium-tier reports lined up from Japan over the next few days, but it’s likely that sentiment could keep pushing the Japanese currency around. Read more.
The higher-yielding Aussie took a few jabs as risk aversion came into play last week, but it also managed to gain some support from higher gold prices.
Chinese data and the Australian jobs report could be the main events for the Aussie this coming week, although risk sentiment could remain a driving factor. Read more.
The Kiwi was at the bottom of the forex pile as it was dragged sharply lower by a downbeat RBNZ statement, which featured downgraded growth and inflation forecasts.
There are no major reports lined up from New Zealand this coming week, which suggests that traders could continue pricing in the change in RBNZ policy bias to their positions. Read more.
Charts to Watch:
First up is this classic break-and-retest setup showin’ up on the 4-hour time frame of AUD/USD. A correction to the falling trend line, 61.8% Fib, and former support around the .7675 level could be underway. Stochastic is already indicating overbought conditions, so any of the lower Fibs could hold as a ceiling.
Here’s another potential bearish Aussie play! EUR/AUD appears to be forming a descending triangle on its 4-hour chart and is currently testing the bottom. The oscillator is already pulling up from the oversold region to signal that bulls could take over from here.
Last but not least is this pound bounce right at the bottom of the ascending triangle on GBP/NZD’s daily time frame. Stochastic is also heading north, which means that price could be able to make its way up to the triangle top at the 1.9750 minor psychological mark. Better stay tuned for the U.K. jobs report and BOE Inflation Report hearings when trading this one.