Major Currencies Overview
Trade jitters did a number on the Greenback, which struggled to hold on to some of its safe-haven gains for the most part of the previous week.
Now that the FOMC decision and July NFP report are out of the way, it’s a relatively quiet week for the dollar in terms of economic releases. More room for trade-related updates to make waves perhaps? Read more.
It’s another winning week for the Loonie thanks to positive NAFTA updates and a rebound in crude oil. Canada’s stronger-than-expected trade balance didn’t hurt either.
Loonie traders could turn their attention to Canada’s jobs report due on Friday while continuing to take cues from oil prices before that. Read more.
EUR & CHF
It was a strong start for the euro, but it wasn’t able to pull off a strong finish as bears attacked towards the latter part of the week. The franc, on the other hand, was buoyed by safe-haven demand.
It’s gonna be a quiet week for both these European currencies, at least in terms of economic reports. Make sure you keep tabs on dollar movements and sentiment, though! Read more.
That’s another losing week for the pound! Even though the BOE hiked rates as expected, the central bank’s Brexit anxiety started to show and it weighed the currency down.
The next set of economic catalysts for the pound won’t come until Friday when the industrial production report and preliminary GDP will be printed. Read more.
The BOJ decision and risk sentiment were the main catalysts for the yen last week, with the former disappointing bulls and the latter reviving gains.
A bunch of medium-tier Japanese reports are due throughout the week before the preliminary GDP readings are rolled out on Friday’s Asian session. Read more.
The lack of progress in trade talks between U.S. and China continued to drag the higher-yielding Aussie lower as escalating tensions could hurt the Land Down Under’s export sector most.
China’s latest set of figures could signal if businesses are starting to react to these trade uncertainties, but the Aussie might also get a quick reprieve with the RBA statement due. Read more.
Risk-off flows on resurfacing trade war fears kept the Kiwi’s gains in check for the previous week, putting the commodity currency in last place.
The RBNZ could steal the show with its monetary policy statement this time, even though no actual interest rate changes are expected. Read more.
Charts to Watch:
Here’s an update on the long-term CHF/JPY setup from last week. Price looks ready to resume the drop as a double top formation can be seen on the 4-hour time frame. The pair has yet to test and break below the neckline to confirm a selloff, though, and stochastic suggests that sellers are taking it easy for now.
After that breakdown from a long-term ascending channel, USD/CHF is now forming a new short-term descending channel as it begins a downtrend. Price is currently testing the resistance, which lines up with an area of interest or former support.
If this continues to hold as a ceiling, price could be headed back down to the bottom of the new channel near the .9800 major psychological mark.
Lastly, here’s a look a the range resistance test on the daily time frame of EUR/NZD. Price is still consolidating inside a small descending triangle, but stochastic seems to be suggesting that a break lower is in order. In that case, the pair could make its way back down to the bottom of the range at 1.6680, but a break higher could mean that an uptrend is underway.