Major Currencies Overview
Dollar domination! The Greenback regained its crown as the king of pips in the previous week, mainly taking advantage of risk-off flows in the latter part.
The spotlight turns to the much-anticipated FOMC decision this week as the central bank is expected to hike but signal a slower pace of tightening for the next year. Oh, and did I mention that updated forecasts are due, too? Read more.
The Loonie was a net winner, even with a bit of decoupling from crude oil prices. Trade-related optimism is being credited for some of the gains and maybe a minor NAFTA development.
There aren’t a lot of reports due from Canada for the most part of the week, so the action might wait until the Canadian retail sales figures are printed on Friday. Read more.
EUR & CHF
A combination of downbeat PMI readings and a more cautious ECB announcement weighed on the shared currency while the franc let out a sigh of relief after the SNB decision.
Only a few medium-tier reports are lined up from the euro zone this week, so it might be a quiet one for the euro and franc, unless Brexit updates push European markets around. Read more.
With all the Brexit drama that’s going on, it’s no surprise that the pound found itself at the very bottom of the forex pile, even though PM May managed to survive a leadership challenge.
All this uncertainty could keep looming over pound pairs for this week, although it’s also worth watching the release of the U.K. CPI and of course the BOE statement. Read more.
The yen was barely able to take advantage of risk-off flows and bond yields since it ended as a net loser for the week.
The BOJ decision (or at least the buildup to it) might shake things up a bit this week, even as the central bank isn’t really expected to change policy. Read more.
The Aussie was the comeback kid for the week as it pulled up from the bottom spot earlier on to finish in second place.
The Australian jobs report is the only top-tier catalyst on the calendar, but it’s likely that the currency could keep taking cues from sentiment and trade updates. Read more.
The Kiwi joined the pound at the bottom of the forex heap in the previous week as the RBNZ hinted at an increase in reserve requirements.
There are no major reports from New Zealand in the days ahead but traders might keep weighing in on the earlier central bank announcement and what it implies for monetary policy. Read more.
Charts to Watch:
Check out this short-term range that Cyclopip had his eye on last week! Resistance held like a boss and price is now on its way back down to the bottom for another potential bounce.
Stochastic is already pulling up, though, so buyers might be eager to return or defend the floor. A breakdown, on the other hand, could trigger a drop that’s the same height as the rectangle.
Here’s a simple support-turned-resistance setup showing up on the daily chart of NZD/USD. Price pulled up to the 50% Fibonacci retracement level that lines up with the broken support around the .7000 major psychological mark.
Sellers could be looking to return right here as stochastic is heading down from the oversold region and has plenty of room to head south. In that case, the pair could make its way down to the swing low around .6425 or lower. Better set your stops right if you’re hopping in!
Last but certainly not least is this channel on USD/CAD that I’ve been watching for the longest time. The trend is still intact, fellas!
Price is consolidating in a symmetrical triangle at the middle, though, and a breakout from this pattern could also signal a possible break from the channel. Stochastic is turning higher to suggest that buyers might have the upper hand, but it could still be anyone’s game right here!