Major Currencies Overview
The scrilla found itself running ahead most of the pack, drawing energy from overall market sentiment and counter currency weakness.
This time, the focus would likely be on the FOMC meeting as traders are eager to see if the central bank would sound more chipper after seeing the recently released upbeat Q1 GDP. Oh, and the NFP report is due, too! Read more.
The BOC statement didn’t provide much direction for the Loonie as the central bank also gave in to a more downbeat bias. Still, the Canadian currency chalked up several gains and lost only to the dollar and yen.
It could shape up to be a quiet week for the Loonie since there are no major economic events in Canada, except perhaps a speech by BOC head honcho Poloz. Read more.
EUR & CHF
The previous week saw plenty of red for the shared currency and the franc as their central bank biases may have kept downside pressure in play.
A handful of medium-tier and low-tier reports are lined up from both the euro zone and Swiss economy, giving traders early clues on whether or not the slowdown was sustained. Read more.
Despite cooling Brexit drama, sterling had a mostly weak run last week as traders also seemed to be brooding over recent data misses.
The BOE Super Thursday could set the record straight as the central bank will, not only announce their policy decision, but also release their updated economic forecasts. Read more.
The lower-yielding yen took advantage of risk-off flows and falling global bond yields, shrugging off mostly downbeat Japanese data.
The coast is clear in terms of top-tier economic reports from Japan this week, and volatility for yen pairs might be subdued as a couple of banking holidays are coming up. Read more.
And the biggest loser is… The Aussie! The higher-yielding currency caved to risk-off flows and downbeat CPI figures, which fueled RBA rate cut expectations.
Chinese PMI readings and low-tier reports from Australia could be the catalysts for this week, but risk sentiment spurred by big events in other major economies could also shake things up. Read more.
The Kiwi also had a pretty rough week as it took cues from overall market sentiment and its buddy, the Aussie. It doesn’t help that the dovish RBNZ bias keeps weighing the currency down.
New Zealand’s quarterly jobs data could be the Kiwi’s main event for the week as downbeat results might stoke rate cut speculations. Read more.
Charts to Watch:
This pair recently crashed below the near-term support around the .6750 minor psychological mark and dipped to .6580. A pullback appears to be underway and the Fib tool shows that the former support zone is spanned by the 38.2% to 50% levels.
Stochastic is already indicating overbought conditions or exhaustion among buyers, and turning lower could show a return in selling pressure that might take price back to the swing low or lower.
After making a strong break above its symmetrical triangle top, USD/CAD might be prime for a correction to the area of interest around the 1.3400 handle.
This coincides with the 50% Fibonacci retracement level that might be enough to keep losses in check. A shallow pullback could already find support at the 38.2% level and yield a bounce back to the swing high and beyond.
Bounce or break? This pair is down to the bottom of its descending triangle pattern, still deciding whether to recover to the top or to go for a break lower.
The latter could result in a slide that’s around the same height as the chart pattern, which spans 144.00 to around 148.50. Stochastic is pointing up, though, so there could still be some buying energy left to take GBP/JPY to the 145.50 resistance.