Major Currencies Overview
The scrilla chalked up another mixed performance for the week as plenty of market themes came in play. Trade talks were still in focus, and the dollar caught some bids when the FOMC minutes weren’t so downbeat.
The focus should be on the advanced GDP release this week, although it’s likely that market sentiment on trade developments would be a driving force. Read more.
More gains in crude oil prices lifted the correlated Loonie, and trade developments also gave an extra boost. This helped the currency shrug off not-so-optimistic BOC remarks and a weak retail sales report.
Canada’s CPI release is the main event for the Loonie this week, but not much changes are eyed. Can crude oil stage another week of gains? Read more.
EUR & CHF
Price action among euro pairs was as mixed as a bag of nuts since the shared currency mostly took cues from its rivals. Data has been mostly downbeat and there’s talk of the ECB resuming its asset purchases.
Risk sentiment and counter currency price action could push the euro and franc around once more, but there are preliminary CPI readings due from the bloc and some data points from Switzerland. Read more.
Sterling was able to reclaim its place in the top spot, partly due to some upside surprises in wage data and also to wishful thinking involving Brexit.
Not much progress in negotiations is expected as PM May appears to be losing political grip, but this ups the odds of pushing the Brexit date later. BOE Inflation Report hearings are something to watch out for, too. Read more.
The lower-yielding yen found itself near the bottom of the forex pile as risk appetite favored riskier holdings. It didn’t help that another round of weak data was printed, reinforcing the BOJ’s threats to ease again.
Only a few low-tier reports are due from Japan in the days ahead, which could leave yen pairs more sensitive to overall market sentiment. Read more.
The Aussie slumped back to the losers’ table in the previous week as disappointing figures from China highlighted the risks from the trade war.
There have been some positive developments in trade talks, though, and a continuation of this mood could bring the Aussie some relief this time. Read more.
And now for the biggest loser of the week… The Kiwi! The higher-yielding currency had its wings clipped as it took cues from the Aussie and Chinese data.
With no major reports on deck from New Zealand other than its trade balance, it’s likely that the Kiwi could once again be extra sensitive to trade developments and overall market sentiment. Read more.
Charts to Watch:
Don’t look now, but this pair has already made it to the very top of its long-term descending triangle on the daily chart. Time for some big moves?
A bounce could take it back to the triangle support near the .7200 mark while a break might spur a climb that’s the same size as the formation. Stochastic seems to be suggesting that sellers have the upper hand as the oscillator just moved down from the overbought zone.
Here’s another setup for the swing traders out there! Guppy is inching closer to the top of its long-term descending channel after just recently pulling up from the mid-channel area of interest.
Pound bulls might run out of steam as the resistance around 145.00 is tested, especially since stochastic has reached the overbought zone to signal exhaustion. Turning lower could encourage bears to drag the pair back down to nearby support levels.
Last but certainly not least is this rising wedge formation on USD/CHF that already seems to be playing out. Resistance is doing a fine job of keeping gains in check while stochastic is confirming the presence of selling pressure.
This might be enough to take the pair back to the bottom of the formation around the .9775 area or even for a break lower. In that case, a selloff that’s the same height as the wedge might follow.