Major Currencies Overview
The scrilla was unable to keep up its winning streak as it slumped close to the very bottom of the forex heap last week mainly on weaker U.S. bond yields.
The spotlight could stay on monetary policy this week as the FOMC minutes are on the docket and could remind traders of the central bank’s tightening plans. Read more.
Crude oil retreated from its highs and dragged the correlated Loonie along with it for the most part of the previous week, possibly worsened by weaker global growth forecasts and a drop in risk appetite as well.
Canada’s CPI and retail sales are due this coming Friday and could shape expectations for the next BOC monetary policy decision. Read more.
EUR & CHF
Lingering concerns on Italy’s budget situation and the Brexit deal kept a lid on the euro’s gains while the franc seemed to be taking cues from its counterparts.
This time, the focus could be on the EU Summit and how leaders attempt to settle these big issues. What can we expect from this event? Read more.
Sterling also had a mixed run but caught a few more gains than usual as traders seemed to maintain a cheery outlook for Brexit talks.
The EU Summit should provide a bit of clarity later in the week, but there are still a few top-tier U.K. reports the pound has to contend with. Read more.
The Japanese currency grabbed its share of safe-haven flows from the dollar and the franc, closing the week out as one of the top performers.
Japan’s trade balance and Kuroda’s speeches should provide a bit more excitement for yen price action this time, although it’s likely that risk sentiment could stay in control. Read more.
The Aussie found itself ahead of most of its peers, thanks to a pickup in gold prices towards the end of the week.
Australia’s jobs report is due this time and a strong read could keep propping the currency higher, but it’s likely that risk appetite could dictate its direction once again. Read more.
In a reversal of fortunes from the other week, the Kiwi found itself in the top spot as it was able to take advantage of risk-taking and dollar weakness.
New Zealand’s quarterly CPI might be the main event for this currency in the days ahead as this could either support or challenge the RBNZ’s not-so-hawkish policy bias. Read more.
Charts to Watch:
First up is this long-term uptrend play visible on the daily chart of USD/JPY. Price is already testing the rising trend line and area of interest at the 61.8% Fibonacci retracement level, and a bullish divergence can be seen, too. If bulls return at this point, the pair could find its way back up to the swing high at 114.55.
Remember that AUD/USD countertrend play from last week? Zooming in to the 1-hour chart shows that the pair is forming a double bottom classic reversal pattern at that area, adding hints that a rally could be due. Price has yet to break past the neckline around .7130 level before confirming that an uptrend is in the works.
Guppy recently busted through a long-term descending channel to signal that a reversal is underway, but a pullback might be needed to gather more bullish energy. Price looks ready to retest the 38.2% to 50% levels that line up with the broken channel top while stochastic is dipping in the oversold territory.