Major Currencies Overview
FOMC rate hike prospects and the central bank’s decision to drop “accommodative” in its statement were among the main factors that lifted the dollar to the top spot last week.
A brand new month means NFP week, and this economic report could be crucial in shaping expectations for possibly another hike before the end of this year. Read more.
The Loonie was close behind its North American buddy in last week’s rankings as hopes for a NAFTA deal and a BOC hike remained in play.
The focus could still be on trade talks and tightening expectations in the days ahead, with the Canadian jobs report likely providing more action by the end of the week. Read more.
EUR & CHF
Even though Italy already completed its 2019 budget, the drama may be far from over as these spending plans are beyond the EU’s limits and there are rumors of resignation.
The Swiss franc was on even shakier footing as it finished behind the rest of its peers. There are no major reports due from both economies this week, so Italy might keep hogging the spotlight. Read more.
Sterling staged quite a comeback for the most part of the week, finishing in third place next to the Greenback and the Loonie.
Brexit talks are still going on and a Tory conference plus a speech by PM May scheduled this week could set the tone for pound price action, possibly stealing the show from top-tier U.K. data. Read more.
Risk sentiment and bond yields pushed yen pairs around for the most part of the previous week, but the Japanese currency ended up with a mixed performance.
There are no major reports due from Japan this week, which suggests that these same factors could determine the currency’s direction. Read more.
The Aussie was all over the place last week as it merely seemed to be taking cues from its countercurrencies, barely reacting to changes in gold prices either.
The RBA decision might set the record straight early this week, although no actual interest rate changes are eyed. Read more.
The Kiwi was unable to hold on to its top ranking from the other week, caving to most of its counterparts on dollar strength and some risk-off moves.
Apart from the dairy auction, there are no major events in New Zealand this week, which leaves the Kiwi sensitive to risk sentiment and possibly dollar direction again. Read more.
Charts to Watch:
So much for that pop above the long-term descending channel earlier on! This proved to be a fake out as GBP/CAD is safely back inside this downtrend formation and below the area of interest, setting its sights back on the channel support closer to 1.6300. Price might still fill its weekend gap, but stochastic is suggesting that the selling action could carry on.
Next is this major correction opportunity on the AUD/CHF daily triangle breakdown. The Fib tool shows that the 61.8% level lines up with this broken support around the .7300 mark, but stochastic is already closing in on overbought territory to signal exhaustion among buyers. In that case, the 38.2% Fib at the .7150 minor psychological mark might be enough to keep gains in check.
Here’s one for the short-term traders! If you’re up for a countertrend play, EUR/AUD is bouncing off bottom of its descending channel and might be due for another test of resistance.
If you’re a go-with-the-flow type of fella, you might wanna wait to short at the 61.8% Fib near the channel top at the 1.6200 major psychological mark. Better wait for stochastic to hit overbought levels and turn back down if you’re taking this route!