Major Currencies Overview
Dollar bears were in control of the game for the most part of the previous week likely due to not-so-impressive economic data and sustained risk-taking.
Traders might’ve also been pricing in expectations for this week’s FOMC statement, during which the central bank would likely keep rates unchanged and reiterate their cautious bias. Read more.
Loonie price action was as mixed as a bag of nuts, although the Canadian currency did manage to draw support from rising crude oil prices.
Canada is scheduled to release its CPI and retail sales figures on Friday, so traders might start pricing expectations early while there are no major reports due in the first part of the week. Read more.
EUR & CHF
Economic woes still lingered in the euro zone for the previous week, but the shared currency managed to hold its ground against mostly weaker counter currencies. The franc, on the other hand, was on the losing end.
Euro zone PMI releases on Friday might be the main catalyst for the euro while the Swiss franc has the SNB decision to look forward to. Read more.
Sterling managed to push past most of its peers and pocket gains on the latest round of Brexit developments. Bulls charged on the confirmation that a no-deal scenario might be avoided, but there’s still some hesitation as the delay is up for debate.
Another meaningful vote is said to be in the works this week, but traders might be more interested in the happenings during the EU Summit. Oh, and don’t forget the BOE is due for its policy decision, too! Read more.
The yen was the weakest of the bunch as risk appetite stayed in play for the most part of the week. It didn’t help that the BOJ cut its forecasts on exports and output.
Japan’s CPI and PMI reports are lined up for the week, along with the minutes of the latest BOJ meeting, so some focus should stay on fundamentals. Read more.
The Aussie also chalked up a mixed performance since it seemed to take its cues from its currency rivals. Economic data hasn’t been so upbeat, prompting speculations of a potential RBA cut soon.
Australia’s jobs report is up for release this week, along with the RBA monetary policy meeting minutes. As always, do keep tabs on market sentiment and trade updates if you’re trading AUD. Read more.
No data? No problem! A light data calendar for the Kiwi wasn’t enough to keep it from taking flight as risk appetite boosted the higher-yielding comdoll last week.
Only the quarterly GDP report is due from New Zealand this week, so its outcome could be enough to give the Kiwi its direction. Read more.
Charts to Watch:
This pair seems to be stuck in a range and is currently approaching the top around the 79.75 mark. Stochastic is still pointing up to indicate that buyers have the upper hand, but the oscillator is also nearing the overbought zone to reflect exhaustion.
Turning lower could confirm that selling pressure might return and that resistance is likely to hold. In that case, AUD/JPY might make its way back down to the bottom of the range at 77.80.
A break past the range resistance, on the other hand, could spur a rally that’s roughly the same height as the rectangle pattern.
Is that a break-and-retest I’m seeing? NZD/CAD recently busted through resistance around the .9080 mark, and this area is now holding as support.
If the bounce keeps gaining traction, price could make its way to the Fibonacci extension levels as the next upside targets. The 50% mark lines up with the swing high at the .9200 major psychological mark.
However, stochastic is pointing down to signal that selling energy is still present and could push for another dip.
Here’s one for the swing traders! GBP/AUD is approaching the very top of its ascending channel visible on the daily chart, so a countertrend opportunity may be presenting itself.
At the same time, stochastic is hovering around the overbought zone to signal exhaustion among buyers and a potential bounce off the 1.9000 major psychological mark. If so, a pullback to the channel bottom or until the mid-channel area of interest might follow.