Major Currencies Overview
The Greenback had a pretty good run last week as it emerged as the second best-performing currency next to the Swiss franc. Higher U.S. bond yields on stronger tightening hopes were seen as the main driver.
The spotlight could stay on policy expectations since the FOMC minutes are up for release this week and might provide some clues on how next month’s huddle might turn out. Read more.
Rising oil prices led to a few more gains for the positively-correlated Loonie in the previous week, but NAFTA issues and dampened BOC hike expectations were downers.
Oil could still be in focus this week as the OPEC has meeting with other non-cartel producers early on. Read more.
EUR & CHF
It was another rough one for the shared currency as political troubles weighed while the lower-yielding franc soared to the top spot on safe-haven flows.
The ECB minutes could turn the market attention back to monetary policy this time, but the Swiss currency might still take its cues from sentiment. Read more.
Some of the Royal Wedding Markle & Sparkle may have rubbed off on sterling as the U.K. currency chalked up another respectable finish.
Brexit-related updates are starting to shake things up again, and a bit more volatility could ensue from the top-tier U.K. reports on the docket. Read more.
Rising U.S. bond yields and improving risk sentiment dragged the lower-yielding yen to the bottom of the forex heap last week.
There’s not much in the way of top-tier data from Japan once more, which suggests that the currency could be vulnerable to risk flows as usual. Read more.
The Aussie’s performance was as mixed as a bag of nuts last week, although it did manage to get some cues from gold prices in some days. Stronger than expected jobs data from Australia also added support.
There are no major economic events in the Land Down Under this week, so sentiment could still be a main driving factor. Read more.
The Kiwi had a decent mid-week turnaround but it still seemed extra sensitive to its counterparts’ price action for the most part.
The same could be observed in the coming week as the lack of top-tier data from New Zealand could leave the currency vulnerable to its rivals again. Read more.
Charts to Watch:
Don’t look now but the triangle bottom on NZD/JPY’s daily chart is holdin’ up! This could mean that another bounce to the top around 78.50 to 79.00 is in order, but this could mostly hinge on overall market sentiment since there are no catalysts from both currencies.
If you think a return in risk aversion is in order, though, you might wanna keep tabs on this AUD/JPY triangle. The pair is currently sitting at the top while stochastic is indicating overbought conditions, so a move back to the bottom may be underway. Just be sure to check if the AUD-gold correlation is still intact!
Last but not least is this consolidation pattern on a pound pair, with breakout in either direction looking possible with this week’s U.K. events. For now, price is testing support while stochastic looks ready to head up. Either way, the pair could head up or down by roughly 500 pips or the same size as the formation once it makes a break for it.