Major Currencies Overview
Not even tariffs threats from China were enough to keep the Greenback from pulling off a strong finish as the U.S. currency took advantage of most safe-haven flows.
This could be the case again this week as the coast is clear in terms of major U.S. economic releases and events. Just keep close tabs on trade-related updates when trading dollar pairs! Read more.
Geopolitical tensions between Canada and Saudi Arabia may have dulled the Loonie’s shine a bit, but thank goodness positive NAFTA updates were there to save the day.
The Canadian CPI lined up for Friday is the only piece of economic data due from the economy, so Loonie traders might stay sensitive to crude oil or NAFTA headlines for the next few days. Read more.
EUR & CHF
Dollar strength and contagion fears from Turkey dragged the shared currency down for the week while the franc scored its fourth consecutive net positive week on safe-haven flows.
Just a handful of medium-tier reports are due from the euro zone this week and none from the Swiss economy, likely leaving their currencies moving to the same factors as last time. Read more.
Yet another week in the red for the pound! Worsening fears of a “no deal” Brexit outcome continued to dampen the British currency’s spirits, preventing it from rallying on a few positive U.K. numbers.
The focus could return to U.K. fundamentals, though, as jobs data, CPI and retail sales are all on the docket. Read more.
The yen pounced on safe-haven flows for the most part of the previous week, allowing it to claim the top spot. It also helped that there were talks of a hike from the BOJ for this year.
Japan’s economic calendar is looking a bit light, so market sentiment could still be the dominant force in yen price action. Do stay on the lookout for BOJ rumors, though! Read more.
Risk aversion and gold price gains pulled the Aussie in opposite directions for a few days, but ultimately it was sentiment that won out. It didn’t help that the RBA wasn’t in a very hawkish mood either.
Australia’s jobs report is due this week and the commodity currency could also take some cues from medium-tier Chinese data due earlier on. Read more.
With the RBNZ turning up the notch on its dovish bias during last week’s rate statement, it’s no surprise that the Kiwi had its wings clipped and found itself at the bottom of the heap.
It’s economic schedule is practically empty this week, so traders could continue to price in their reaction to the RBNZ announcement, unless of course there’s a strong pickup in risk-taking. Read more.
Charts to Watch:
Long-term reversal alert! EUR/USD appears to be breaking below the neckline of its head and shoulders visible on the daily time frame. This signals that further losses are in the cards, although sellers might need to take a quick break as stochastic dips into oversold territory.
In any case, the chart pattern spans roughly a thousand pips, which suggests that the downtrend could last by the same height.
USD/CHF has formed higher lows and found resistance at the 1.0050 minor psychological mark, creating an ascending triangle on its 4-hour time frame. Price is just bouncing off support while stochastic makes its way up, possibly reflecting enough bullish pressure to take the pair back to the triangle top.
A breakout in either direction could lead to a move that’s the same height as the chart pattern, which spans around 200 pips.
Lastly, here’s a textbook retracement setup on the 1-hour time frame of USD/CAD. The pair is starting to form a descending channel on the 1-hour chart and is currently testing the top, which happens to coincide with the 61.8% Fib and a former support zone. At the same time, stochastic is indicating overbought conditions, so a return in selling momentum may be in order.