Major Currencies Overview
The dollar found some reason to be cheery after seeing stronger than expected U.S. consumer spending by the end of the week. This time, the advance GDP release for Q1 2019 would likely be in focus. Read more.
The Loonie also enjoyed a strong bullish boost from upbeat retail sales data, along with impressive inflation and trade reports. The BOC statement is coming up early this week and, even though no changes are expected, maintaining their neutral bias could still be a plus for the currency. Read more.
EUR & CHF
The euro got bogged down by another batch of mostly downbeat PMI readings, reinforcing the view that the slowdown in the region could last longer and the ECB might resume easing. There are no major reports from the euro zone this week while the franc has SNB head Jordan’s speech to look out for. Read more.
Sterling had a mostly weak run, despite stronger than expected economic data as counter currencies flexed their muscles. There are no major reports from the U.K. this week, so the focus could be on Brexit updates and polls ahead of the local elections. Read more.
The lower-yielding yen had a mixed performance for the week since it was pushed around by counter currency moves. The upcoming BOJ statement could pave the way for more uniform direction among yen pairs, even as no actual changes are expected. Read more.
The Aussie saw its fair share of upbeat economic reports but failed to score any impressive gains. Quarterly CPI readings are up for release this week and could provide some insight on what the RBA’s next moves might be. Read more.
The Kiwi also had a pretty rough week as bulls still seemed to be reeling from stronger RBNZ rate cut expectations next month. There are no major reports due from New Zealand this week, and another market holiday is coming up so volatility could be subdued. Read more.
Charts to Watch:
Bounce or break? This pair is testing the top of its range visible on the 4-hour time frame and might be due for a move back to support. However, stochastic is turning higher without even reaching the oversold region, suggesting that buyers are eager to jump back in.
If so, EUR/GBP might go for a break past the range resistance around .8675 and go for a climb that’s around the same height as this rectangle pattern.
Here’s a textbook trend correction setup on the 4-hour chart of AUD/CAD. The pair is cruising higher inside an ascending channel and is just testing the resistance.Price is retreating to the 38.2% Fibonacci retracement level that lines up with the mid-channel area of interest, which might be enough to draw buyers in. After all, stochastic is already turning higher from the oversold region to signal a return in bullish pressure.
A larger correction could last until the 61.8% Fib at the channel bottom and .9500 major psychological mark while a break below this could spur a reversal.
Reversal alert! This pair is completing its double top formation on the 4-hour time frame and could be due for a break of the neckline support at .8900 soon.
Stochastic seems to have some room to head lower before indicating oversold conditions or exhaustion among sellers. If bears take control, the pair could fall by the same height as the chart pattern or 350 pips.
If support holds, on the other hand, another bounce to the tops at the .9250 minor psychological resistance might follow.