Major Currencies Overview
Expectations for a trade war truce forced the dollar to return its earlier safe-haven gains while some dovish remarks from Fed officials added some drag.
It’s gonna be a shortened trading week for U.S. traders this time as folks prep for their Thanksgiving festivities and Black Friday shopping sprees. Can we expect any big moves with thin liquidity? Read more.
The Loonie was also one of the weakest performers for the previous week as falling crude oil took its toll on the commodity currency, along with some trade-related remarks.
Canada’s CPI and retail sales figures are due towards the end of the trading week, but there’s also the OPEC-JMMC meeting to look out for. Read more.
EUR & CHF
The shared currency managed to shrug off concerns on Brexit and Italy’s debt for the most part of the week as dollar weakness propelled it higher.
ECB minutes and flash PMI readings are on the docket for the latter part of the week, so some focus could return to monetary policy and tightening expectations. Read more.
Another set of Brexit plot twists weighed heavily on the pound, dragging it all the way down to the very bottom of the forex pile.
Word on Downing Street is that Conservatives have raked in enough letters to mount a leadership challenge for PM May, so it’s likely that pound traders will be keeping extra close tabs on political updates. Read more.
The Japanese currency was able to take advantage of unwinding safe-haven dollar bets, emerging as the third best-performing currency for the past week.
Risk sentiment and bond yields would likely push yen pairs around in the days ahead as there are no major reports from Japan and banks will be closed on Friday’s holiday. Read more.
Easing trade war concerns between the U.S. and China helped buoy the Australian dollar to second place last week, along with rising gold prices on geopolitical risks elsewhere.
Apart from the release of RBA meeting minutes, there’s not much in the way of top-tier events from the Land Down Under. With that, better keep tabs on U.S. trade updates and possible changes in sentiment. Read more.
Thanks to risk-taking, the higher-yielding Kiwi scored back-to-back weeks in the top spot. Speculations of cooling trade tensions were the main factor boosting traders’ appetite for risk.
There are no major reports due from New Zealand in the days ahead, which leaves risk sentiment as the main driving factor once more. Any changes to expect this time? Read more.
Charts to Watch:
This pair might be in for a reversal as it formed an inverse head and shoulders on its 4-hour chart and appears to have busted through the neckline. This could set off a climb that’s around 250 pips tall or the same size as the chart formation. However, stochastic is already indicating overbought conditions.
Here’s another potential reversal setup! USD/JPY had a couple of failed attempts at breaking past the 114.20 area, creating a double top pattern on its 4-hour chart.
Price still has some ground to cover before testing the neckline around the 111.75 level but a break below this could spur a drop that’s the same size as the chart pattern. Stochastic is dipping into the oversold region, which suggests that sellers might need a quick break.
Last but certainly not least is this channel-ception showing up on the 4-hour time frame of EUR/USD. The pair is forming a longer-term steady descending channel and is also trading within a steeper short-term one.
Price is testing the resistance of the latter and a break above it could signal that a climb to the top of the former is in the works. However, stochastic is already indicating overbought conditions and turning lower could mean a drop to the smaller channel’s bottom, which would be below the larger channel’s support.