Major Currencies Overview
The dollar still found itself at the losers’ table last week as political drama dampened its safe-haven demand. Fed head Powell wasn’t exactly in a chipper mood during the Jackson Hole Symposium either.
Apart from the preliminary Q2 GDP reading, there’s not much in the way of major U.S. economic events this week, so the focus could still be on Trump in the days ahead. Read more.
Positive NAFTA developments managed to keep a lid on the Loonie’s losses, even though Canada’s retail sales figures came in weaker than expected.
Canada has its monthly GDP and a round of inflation-related reports due this week, so there could still be some focus on fundamentals unless NAFTA updates steal the show once more. Read more.
EUR & CHF
After a bit of a wobbly start, the shared currency surged to the top of the charts, with the Swiss franc not too far behind.
Dollar weakness was seen to be the main factor behind the euro’s strength last week, and the lack of major catalysts from the region could mean a continuation of this behavior. Read more.
Sterling made a bit of a comeback in the previous week thanks to a few positive Brexit-related remarks.
The coast is clear in terms of top-tier U.K. releases this week, which means traders could keep extra close tabs on Brexit updates and the possibility of a “no deal” scenario. Read more.
Since risk-taking was present for the most part of the week, the lower-yielding yen found itself at the very bottom of the forex heap.
A handful of medium-tier reports are scattered throughout Japan’s economic schedule this week, but it’s likely that risk appetite and bond yields might keep pushing the currency around. Read more.
Political trouble on the domestic front weighed on the Aussie around the middle of the week, and it didn’t help that U.S.-China trade jitters still lingered.
Without any major reports from the Land Down Under, the Aussie could take its cue from Chinese PMI data or overall market sentiment this time. Read more.
Strong quarterly NZ retail sales figures weren’t enough to keep the Kiwi propped up as political drama in Australia also affected New Zealand’s outlook.
There are no major reports due from New Zealand this week, leaving sentiment as the main driving factor. Read more.
Charts to Watch:
First up is this textbook trend setup on the 4-hour time frame of AUD/NZD. Price is testing the ascending channel support, which lines up with a former resistance and the 61.8% Fib retracement level. Stochastic is already on the move up to signal that buyers are taking over, possibly pulling the pair up to the channel top or the mid-channel area of interest at 1.1100.
Here’s another break-and-retest setup, but this time for a potential reversal on USD/JPY. The pair could be in for an uptrend if it completes a pullback to the broken descending trend line around the 110.50 minor psychological mark and 61.8% Fib.
Buyers might be more eager to spur a shallow correction, though, as stochastic is pointing back up without hitting oversold levels.
Lastly, here’s a fresh uptrend forming on the 4-hour chart of GBP/AUD as the pair is just gearing up for a test of support. Price is sitting right on the 61.8% Fib while stochastic indicates oversold conditions, so a bounce back to the top around the 1.7750 mark might ensue from here. A break below the channel support at 1.7500, on the other hand, could mean that further losses are in order.