Major Currencies Overview
Another week, another mixed performance for the dollar! While economic data did spark strong intraday moves, the U.S. currency was mostly sensitive to even stronger counter currency price action.
This NFP week might change all that, though, as market watchers seem to be pricing in a likely pullback in jobs growth. A positive surprise might still give dollar bulls good reason to charge. Read more.
Crude oil just couldn’t hold on to its earlier gains, dragging the positively-correlated Loonie down with it. Economic reports from Canada weren’t too upbeat either.
There’s not much in the way of economic releases from Canada this time, leaving traders to price in expectations for the BOC decision. No actual policy changes are expected but a shift in bias might be brewing. Read more.
EUR & CHF
Some signs of a recovery in German data allowed the euro to keep its head up for the most part of the week while the franc turned out a net winner despite downbeat reports.
The ECB statement could shake things up for the euro this week as it would likely feature a dovish hold and a TLTRO announcement. Other than that, sentiment could push the shared currency and the franc around once again. Read more.
It’s back-to-back winning weeks for sterling, thanks to Brexit developments hinting that a messy breakup might be ruled out. Either that or the divorce date would likely be pushed back.
The lack of top-tier releases from the U.K. would likely keep pound traders glued to the tube for any new updates leading up to the next round of votes next week. Read more.
Risk-taking was still the name of the game for the most part of the week as some geopolitical tensions continued to fade, leaving the yen in the losers’ bench once more.
There are no major events lined up from the Japanese economy this week so sentiment could still be the main driving factor, along with price action of it’s rival, the U.S. dollar. Read more.
The Aussie followed through on its downbeat performance the other week with another mostly losing round last time spurred by data weakness.
The RBA monetary policy decision is coming up, so this should set the tone on whether or not they’re really looking to cut rates again anytime soon. Read more.
The Kiwi managed to pull up for air last week thanks to a strong start on upbeat quarterly retail sales data but gave up those gains as the days went by.
There are no major reports lined up from New Zealand this week, so it might be all about risk sentiment from here. Read more.
Charts to Watch:
This pair is still moving inside its long-term symmetrical triangle visible on the daily chart and looks prime for a test of resistance. Stochastic has been hovering near overbought levels for quite some time, hinting that resistance is likely to hold.
If so, USD/JPY could fall back to the triangle support around the 109.00 levels. A break past the top at 113.50, on the other hand, could spur a rally that’s the same height as the triangle.
If you’re good with catching momentum, you might find this GBP/CHF channel setup to your liking. Not only is price starting to break past the mid-channel area of interest to hint at sustained bullish pressure, but the pair is also completing a neckline break from a double bottom.
In that case, GBP/CHF could make its way up to the very top of the channel around the 1.3900 mark, which would line up with a rally that’s the same height as the reversal formation. Just be careful since stochastic is indicating overbought conditions!
Here’s one for the short-term traders out there! If you think you already missed the boat on the EUR/GBP major support break, there might still be a chance to hop in a quick pullback.
Price is inside a descending channel on the 1-hour time frame and is testing the resistance that lines up with the 38.2% Fib and .8600 handle. The pair gapped down over the weekend to suggest that sellers are eager to jump in, possibly sending price back to the swing low or the channel bottom.