Major Currencies Overview
The dollar kissed goodbye to consecutive winning weeks as it chalked up a mixed performance last time! Geopolitical risks and trade tensions were still in play then.
This time, the FOMC minutes might steal the show, although there’s a pretty good chance market watchers will be on the lookout for updates on trade talks between the U.S. and China. Read more.
The Loonie snagged its fourth consecutive weekly win as it climbed to the top spot last week thanks to NAFTA updates and strong Canadian CPI.
Canada’s retail sales figures are lined up this week and could impact BOC hike hopes while crude oil and NAFTA developments might also push the Loonie around. Read more.
EUR & CHF
Turkey’s troubles continued to keep a lid on euro gains, although there were some midweek rallies on potential action from the Turkish central bank.
Meanwhile, the franc enjoyed safe-haven demand as it emerged as a net winner. This time, the spotlight could stay on Turkey, but the euro zone PMI readings and ECB minutes could also lead to quick moves. Read more.
Sterling was THE biggest loser for the previous week on downbeat jobs figures and below-target inflation. Not even upbeat retail sales data was enough to save the day!
The coast is clear in terms of economic reports from the U.K. this week, so it’s likely the pound could take cues from its counterparts instead or be sensitive to Brexit-related reports. Read more.
Risk-off flows propped up the Japanese currency for the most part of the week, although yen pairs tossed and turned according to bond yields also.
The lack of major catalysts from Japan this week could leave more or less the same risk-related factors driving yen price action in the days ahead. Read more.
The Aussie and gold prices weren’t exactly walking side-by-side last week as the currency mostly took cues from the Chinese yuan and trade updates.
The same could be the case this week as the trade talks will be under the spotlight, along with the next round of tariffs between the U.S. and China. Read more.
Even with all the risk-off flows last week, the higher-yielding Kiwi still managed to find its way to the very top. Surprised?
As it turned out, optimism ahead of the U.S.-China trade talks this week boosted the commodity currency, but all that could change depending on how the discussions pan out. Oh, and New Zealand’s quarterly retail sales report is on the docket, too! Read more.
Charts to Watch:
Here’s an update on the EUR/USD reversal pattern from the previous week! Price already broke below the neckline to confirm that a selloff is underway, but a quick pullback may be due before it heads further down. Stochastic is indicating oversold conditions anyway, so a retest of the neckline could take place right around the Fibs.
This pair also looks ready for a pullback to a broken long-term floor, which happens to be right smack in line with a fresh descending trend line. However, stochastic is already starting to head south from the overbought region to signal that sellers are eager to return before price even pulls up to the .9600 area of interest.
And here’s one more potential break-and-retest play! AUD/JPY also crashed below a long-term floor around 81.00 and is now making a pullback. A higher correction could still be possible, though, as stochastic has yet to hit overbought levels and turn back down. If any of the Fibs keep gains in check, a move back to the swing low could be seen.