Major Currencies Overview
Even with most U.S. traders on a shortened trading week, the Greenback cashed in on strong risk-off flows last week, enough to propel it to the top two spot just below the lower-yielding yen.
The U.S. preliminary GDP reading and the FOMC minutes are the main events coming up, and traders might be on the lookout for clues that support earlier Fed rumors. Read more.
The Loonie had another weak run as crude oil continued to slide. However, it did manage to draw some support from NAFTA-related updates and upbeat CPI.
This time, oil could continue to stay in the limelight ahead of the release of Canada’s monthly GDP and underlying inflation figures later in the week. Read more.
EUR & CHF
Italy’s budget drama still pushed the shared currency this way and that for the most part of the week as the EU rejected their spending plans… again!
This budget issue could stay front and center in the days ahead, although some attention could return to monetary policy with Draghi due to give a few speeches. Read more.
Some signs of progress on the Brexit front brought the pound to the winners’ circle last week, but it was still apparent that plenty of challenges remain.
The U.K. bank stress test results are due this week and these might bring some focus back to contingency plans for a “no deal” situation, but many are hopeful that more positive developments will be announced. Read more.
The Japanese yen outlasted its forex peers thanks to the presence of risk aversion for the most part of the week.
A handful of medium-tier reports are due from Japan towards the end of this trading week, but it’s likely that sentiment might still be the main driving force. Read more.
After a stellar finish the other week, the higher-yielding Aussie found itself near the bottom of the forex pile on risk aversion and resurfacing trade concerns.
Chinese manufacturing PMI readings and Australia’s quarterly private expenditure numbers are lined up for the week, which should provide a glimpse of how trade tensions are affecting businesses on both fronts. Read more.
Misery does love company for the commodity currencies, as the Kiwi joined its buddy the Aussie in the losers’ bench last week on account of trade concerns and overall risk aversion.
Over the weekend, New Zealand reported weaker than expected retail sales data. The RBNZ Financial Stability Report and a couple of testimonies by Governor Orr are coming up next. Read more.
Charts to Watch:
This pair looks prime for a quick pullback to the area of interest at the .6700 major psychological mark, which is right smack in between the 50% and 38.2% Fib levels. Stochastic is already dipping into the oversold territory to signal that sellers are exhausted and may let buyers take over, lifting NZD/USD back up to the swing high and beyond.
Check out this rising channel still holding up quite well! Price bounced off the resistance and is now back to the bottom, probably waiting to clear the mid-channel area of interest before making another move to the top. However, stochastic is pointing down to suggest that sellers have the upper hand and might push for a breakdown and reversal.
If you think you might be late to the short Loonie party, then you might wanna check out this freshly-forming ascending channel on the 1-hour chart of EUR/CAD. Price is just on its way to test the channel bottom around the 1.4950 minor psychological mark where buyers might be waiting as stochastic is starting to pull up, too.