Major Currencies Overview
Another round of dollar weakness ensued last week as the Fed signaled that they probably won’t hike interest rates again this year. Yikes!
There’s not much in the way of major U.S. economic reports this week, so the focus could shift to upcoming trade talks and overall market sentiment. Read more.
The Canadian currency shrugged off higher oil prices and turned out to be the biggest loser of the week. Dovish BOC vibes and a resurgence in risk-off flows on global growth concerns came in play.
There are no major reports due from Canada for the most part of the week, except perhaps for the monthly GDP on Friday’s docket. Until then, market sentiment could push Loonie pairs around. Read more.
EUR & CHF
Euro pairs were off to a slow start before staging big declines towards the end of the week when another round of data points disappointed. Meanwhile, the SNB didn’t announce any surprises during their statement. Phew!
More medium-tier reports are due from the region this week, along with a speech by main man Draghi himself. Read more.
Sterling also had a pretty tough week as the U.K. was granted a Brexit extension but not exactly the one they wanted. Still, the BOE decision and some U.K. reports provided some relief.
Without any major U.K. events on this week’s schedule, traders could fix their attention on Brexit developments and the likelihood of getting any deal through. Read more.
The yen took advantage of risk-off flows and dollar weakness in the previous week and was crowned the king of pips then. Woot woot!
A few low-tier reports are lined up from Japan throughout the week, possibly highlighting the BOJ’s souring outlook on the economy. But if risk aversion stays on, the yen might be poised for more wins. Read more.
Aussie pairs tossed and turned for the most part of the week as risk sentiment and RBA rhetoric did a number on the currency.
Some speeches from RBA officials are lined up in the coming days, but it’s likely that market sentiment might be the main driver of AUD price action as trade talks are once again heating up. Read more.
The Kiwi managed to brush aside some of the risk-off vibes as it also attempted to take advantage of dollar weakness, only ending in the red against the yen and franc. Not bad!
The RBNZ statement is something to watch out for, though, as the central bank might ramp up its cautious tone just like the rest of its peers. Read more.
Charts to Watch:
This pair looks set to resume its downtrend as it bounced off the top of the descending channel on its 4-hour time frame. The Fib extension tool shows the next potential downside targets, with the 61.8% level lining up with the mid-channel area of interest and .7050 minor psychological mark.
Sellers might need to take a break soon as stochastic is dipping into the oversold region to reflect exhaustion. But if bearish pressure stays on, AUD/USD might head further south to the full extension at the channel support.
Is a triangle breakout in the works? NZD/USD is still stuck inside its triangle consolidation pattern on the 4-hour time frame but is approaching the peak of the formation to signal that traders have to pick a side.
A strong move past the resistance around the .6950 mark could confirm that buyers have taken the upper hand and could go for a climb that’s the same height as the triangle formation. A candle closing below the .6800 handle, on the other hand, could signal that sellers are in control.
Last but certainly not least is this long-term rising wedge that’s still holding on the daily time frame of USD/CHF. Price was rejected on its test of resistance recently, so another test of support might be due.
Stochastic is still pointing down and has a bit of room to go before hitting oversold territory, which suggests that sellers could have some energy left for a larger dip. Stronger bearish momentum could spur a break below the .9800 support and a drop that’s the same height as the wedge.