Major Currencies Overview
The dollar’s performance was as mixed as a bag of M&Ms last week as counter currency action was the theme, along with changing risk sentiment.
This week, traders might still be reeling from the downbeat retail sales report but also looking forward to the release of the FOMC meeting minutes. Then again, cautious remarks might not bode well for the U.S. currency. Read more.
Thanks to gains in crude oil prices, the Canadian dollar was able to pocket some wins in the previous week. Hints that the BOC could carry on with hiking also lifted the currency’s spirits.
BOC Governor Poloz should shed more light on their policy bias with his speech this week and the Canadian retail sales report might make or break hawkish vibes. Read more.
EUR & CHF
The euro also had a mixed run as it took most of its cues from counter currencies but was also bogged down by weak data. Meanwhile, the franc lost ground to risk-on moves and traders’ unease after a couple of sudden drops.
It’s PMI week for the euro zone, and given the not-so-stellar track record of its top economies, another round of weak readings might be in order. Read more.
Sterling spent the previous week mostly in the red as the lack of Brexit progress weighed on sentiment, along with disappointing economic figures.
Only the jobs report is due early on, which leaves traders more focused on Brexit developments (or the lack thereof) for the remainder of the week. Read more.
Risk-taking did a number on the lower-yielding Japanese yen last week, and it didn’t help that Japan’s reports also disappointed.
Japan’s trade balance and manufacturing PMI are on the docket, but it’s likely that traders might pay more attention to trade developments and overall risk sentiment again. Read more.
The Aussie found itself in the winners’ circle thanks to mostly upbeat data and a strong improvement in global sentiment.
This week will be a really busy one, starting off with the release of the RBA meeting minutes, followed by jobs data. Of course traders are also keeping their eyes peeled for developments in trade talks. Read more.
Last but definitely not least is the Kiwi, which found itself at the very top spot on account of a surprisingly upbeat RBNZ decision.
There are no major reports lined up from New Zealand this time, but the Kiwi might keep riding high as long as risk appetite stays supported. Read more.
Charts to Watch:
So much for that broken trend line retest last week! This pair looks intent to carry on with its slide as it completes a complex head and shoulders reversal pattern on the daily time frame.
Price is already testing the neckline and a break below this 1.6400 area could be enough to confirm that a long-term selloff is due. Stochastic is still pointing down to indicate that selling pressure is in play, but the oscillator is approaching oversold levels, too.
Here’s one for the short-term traders out there! If you like going with the flow, this descending channel correction might be worth watching. Price looks prime for a test of the .9500 resistance while stochastic is edging to the overbought zone to signal bullish exhaustion.
If resistance holds, AUD/CAD could find its way back down to the channel bottom around the .9300 mark. A break past the channel top, on the other hand, could signal that a reversal is in the works.
Looking for a potential breakout setup? This pair is gearing up to test the top of a triangle pattern visible on the 4-hour time frame and might have enough momentum for an upside break.
After all, the RBNZ surprised with a more upbeat statement last week and trade tensions aren’t looking too good for the dollar this time. If resistance holds as the overbought stochastic suggests, another dip to the triangle floor might follow.