Major Currencies Overview
A return in risk-taking and trade war jitters dragged the Greenback close to the bottom of the forex heap last week, and the upbeat NFP report wasn’t enough to boost it higher.
Without any major catalysts on deck from the U.S. economy this week, dollar price action could hinge mostly on market sentiment and any other trade-related headlines. Read more.
Expectations of OPEC output deal adjustments continued to weigh on crude oil and the positively-correlated Loonie, preventing it from holding on to its post-BOC gains.
Canada has its jobs report lined up for the end of the week, and more chatter from OPEC or NAFTA talks could push the currency around before that. Read more.
EUR & CHF
And that caps off the euro’s losing streak! The shared currency drew support when Italy sealed in its coalition government while the lower-yielding franc tossed and turned for the most part.
A bunch of medium-tier leading indicators are up for release from the euro zone this week while Switzerland has an empty schedule, so risk sentiment might play a bigger role. Read more.
Sterling had a mixed performance for the most part of the week as it simply reacted to its counterparts on the lack of major U.K. reports. The same behavior could be seen this week, with only a couple of industry PMI readings lined up. Read more.
Changing risk sentiment did a number on the yen last week, as a bit of political clarity in Italy weighed on the currency while trade war troubles gave it a boost later on.
There are no major reports lined up from Japan this week, which suggests that sentiment could continue to push yen pairs around. Read more.
The Aussie resumed trading on fundamentals when trade war fears kicked in, and it didn’t help that a couple of reports missed their marks.
There’s no shortage of top-tier catalysts from the Land Down Under this week, and this includes the RBA interest rate decision. How might this turn out? Read more.
Surprisingly, the Kiwi emerged at the top spot in the previous week, even as trade wars came into play and the RBNZ didn’t seem eager to hike at all.
There are no catalysts lined up from New Zealand this week, so risk sentiment could be the main driving factor for the Kiwi once more. Read more.
Charts to Watch:
First up is a textbook pullback setup on the daily time frame of GBP/AUD. Price is currently hovering at an area of interest spanned by the 38.2% to 50% Fibonacci retracement levels. If these levels are enough to keep losses at bay while stochastic indicates oversold conditions, the pair could bounce back to the swing high or higher.
Not a fan of the pound? Here’s a potential short play for ya! This pair already busted through the floor around the 1.9300 handle but looks ready for a quick retest before heading further south.
Stochastic is still moving up for now, so sellers might not return until the oscillator turns back down. Once that happens, GBP/NZD could resume the slide to the swing low or create new ones.
Lastly, here’s a match-up between the lower-yielders, the Swiss franc and the Japanese yen. A sketchy double bottom reversal pattern has formed on its 4-hour time frame, suggesting that the selloff could be over and that an uptrend is due. Price has yet to break past the neckline at the 112.00 area to confirm this, though!