Major Currencies Overview
The Greenback made quite a comeback last week, but not enough to land it back in the top spot. Trade developments and positive GDP expectations lifted U.S. bond yields and the currency for the most part.
Two major catalysts are on deck this time, namely the FOMC statement and the NFP release, so price action on dollar pairs could get much more exciting. Read more.
Oil-related updates buoyed the Canadian dollar all the way to the top of the forex world last week, along with some NAFTA optimism.
The monthly GDP is the only economic report due from Canada this week, which leaves plenty of room to take cues from crude oil and market sentiment. Read more.
EUR & CHF
Even after getting a lift from the Trump-Juncker trade truce early in the week, the euro found itself at the bottom of the heap after the ECB announcement. The franc chalked up a mixed performance then.
Flash CPI and GDP readings are due from euro zone economies and the region as a whole this week while Switzerland has some medium-tier releases lined up, too. Read more.
Brexit updates continued to push pound pairs around for the most part of the week, but the U.K. currency also seemed more sensitive to its counterparts than usual.
A bit more clarity could be gained from the BOE monetary policy statement and MPC minutes this week, especially since a rate hike is widely expected. Read more.
After a bit of tossing and turning, the lower-yielding Japanese currency emerged as one of the top contenders for the week thanks to BOJ policy change speculations.
The actual policy statement is scheduled this week and expectations are running pretty high. As in other weeks, the yen could take cues from bond yields as well. Read more.
The Aussie drew some support from the trade truce between the EU and the U.S. but jitters with China and a disappointing CPI read overshadowed these good vibes.
Trade balance and retail sales numbers are due from the Land Down Under, but it’s likely that Chinese data and trade-related updates might hog the spotlight. Read more.
Positive trade updates and risk-taking lifted the higher-yielding Kiwi early in the week, but its wings were clipped as risk-off flows returned later on.
New Zealand is set to release its quarterly jobs report this time and might push the currency in a strong direction, unless market sentiment flips back and forth again. Read more.
Charts to Watch:
First up is this neat support-turned-resistance bounce on the 4-hour chart of CHF/JPY. The area of interest appears to be keeping gains in check while stochastic heads south. This signals return in selling pressure that could take the pair back to the swing low at 108.50 or lower, but I’d probably wait for a pickup in momentum below those higher lows since May.
Heads up for a potential breakout on this one! The pair has been consolidating inside a symmetrical triangle for quite some time and is approaching the peak of the formation. Stochastic offers some directional clues as it inches closer to overbought territory, but it may just be indicative of yet another bounce from the bottom.
Here’s one for the swing traders out there! CAD/CHF is bouncing off the bottom of its long-term ascending channel and might be drawn to the top, or at least the mid-channel area of interest. This lines up with the resistance on a symmetrical triangle that’s just forming, so better keep your eyes peeled for a bit of a bounce right there.