Major Currencies Overview
The Greenback found itself at the bottom of the forex heap last week as improving risk appetite and ECB tightening chatter may have dragged it lower.
Apart from that, traders might also be easing up on their long dollar positions ahead of this week’s FOMC statement. Although a rate hike might be in the cards, market watchers may be anticipating cautious remarks. Read more.
Weaker oil prices and trade war troubles kept hurting the Loonie’s chances against its rivals, and it didn’t help that economic data disappointed as well.
There are no major reports due from Canada this week, which suggests that traders could pay closer attention to OPEC-related headlines leading up to their pow-wow next week. Read more.
EUR & CHF
Stronger ECB tightening hopes propped up the shared currency to the top spot last week while the Swiss franc lagged behind as risk-taking came into play.
Euro traders might be eager to price in expectations ahead of the ECB decision around the middle of the week, and hawkish confirmation could mean another winning one for the currency. Read more.
Sterling chalked up another mixed performance since there weren’t any reports to give the currency strong direction. However, Brexit jitters resurfaced and might kick into high gear from here.
Note that the House of Commons will be voting on the EU withdrawal bill this week, and further disputes among lawmakers could bring more uncertainty back to the mix. Read more.
‘Twas another losing week for the Japanese currency as it fell victim to changing risk sentiment and surging bond yields.
The BOJ decision towards the end of this week could change all that as any shift in policy bias could shift the focus back to Japan’s fundamentals. Read more.
The Aussie had a bit of a mixed run but still wound up as a net winner, despite some divergence with gold price action.
The Australian jobs report might be the main event for the currency this week, on top of RBA Governor Lowe’s speech. Other than that, trade-related headlines could also move the currency. Read more.
The Kiwi was also a net winner for the week on account of improving sentiment, particularly when it came to calling a truce on the trade war.
There are no major catalysts from New Zealand this week, which suggests that the currency could continue to take cues from its counterparts or overall risk appetite. Read more.
Charts to Watch:
After breaking through that long-term rising trend line visible on the daily chart, Cable looks prime for a retest of the broken support. The 50% level is closest to this area of interest around the 1.3800 major psychological mark, and the upcoming U.K. catalysts might be enough to take it there or allow the selloff to resume soon.
Bounce or break? AUD/JPY is sitting right at the middle of its rising channel on the 4-hour chart, still deciding whether to make a bounce or a break. Stochastic is suggesting that a bounce to the top is due, but this could all hinge on the outcome of the Australian jobs report due later on this week. Of course good ol’ market sentiment could lead to some swings, too!
Here’s one for the short-term traders! USD/CHF continues to trend lower inside a descending channel and has just bounced off the top again. Price could be aiming for the bottom around the .9750 minor psychological mark from here while stochastic moves down. Just make sure you keep tabs on the upcoming FOMC decision to gauge if any breakouts could take place.