Major Currencies Overview
Trade tensions? Pfft! The Greenback still managed to leave its forex peers eating dust, outpaced only by the Swiss franc, as it banked mostly on its safe-haven appeal.
The release of the FOMC minutes might be the main catalyst for the Greenback this week as dovish remarks are expected. Still, keep an eye out for overall market sentiment as fears of an extended global growth slowdown appear to be propping up the U.S. currency. Read more.
Higher crude oil prices on Middle East tensions propped up the positively-correlated Loonie, even as global trade uncertainties were back in play.
Canada’s retail sales figures are up for release this week and could turn the focus back on CAD fundamentals while keeping sentiment in the background. Read more.
EUR & CHF
The Swiss franc was able to take its share of safe-haven flows and climb to the top spot last week, but the shared currency wasn’t so lucky as currency-specific factors stole the show.
Flash PMI readings and the ECB minutes might provide the euro with a bit more direction this time while the franc might keep taking cues from sentiment. Read more.
Sterling dug an even deeper grave in the previous week as Brexit developments painted a cloudier picture for the U.K. economy’s future.
There are a few more economic reports that could save the pound from more losses this time, but market watchers are likely to pay extra close attention to Brexit uncertainties again. Read more.
The yen chalked up another strong weekly performance thanks to risk aversion extending its stay on account of worsening trade tensions.
A handful of low-tier reports are lined up from the Japanese economy this week and traders are wary of downgrades to the growth outlook. Still, the lower-yielding currency might be able to bank on its safe-haven status for another run. Read more.
It was another week in the red for the Aussie as neither the U.S. nor China showed any willingness to compromise in trade talks. It didn’t help that the Land Down Under’s downbeat employment figures fueled rate cut expectations.
The RBA minutes and a speech by Governor Lowe are lined up for this week, so Aussie traders will likely keep their eyes and ears peeled for easing hints. Read more.
The Kiwi also had a rough week as it followed its buddy, the Aussie, down the charts on account of worsening trade tensions and easing expectations.
There are no major reports due from New Zealand for this week, which might leave the higher-yielding currency vulnerable to more risk-off flows. Read more.
Charts to Watch:
Check out that strong breakout! This pair busted through the top of the range we’ve been watching for quite some time, indicating that bulls have won this round.
However, stochastic has been hanging around the overbought region for quite some time to signal exhaustion among buyers. This could pave the way for a pullback to the broken range top that lines up with the 38.2% Fib around the .8670 level, before more bulls join in.
Here’s another one for pound bears out there! Cable just broke below the neckline of its complex head and shoulders reversal pattern, confirming that a long-term selloff might be in order.
Just be careful since stochastic is already indicating oversold conditions, which opens the case for a retest of the broken support. Still, the pair might be in for a drop that’s the same height as the chart formation, which spans roughly 450 pips.
Still looking to short the Kiwi? This descending channel pullback setup on the 1-hour time frame of NZD/USD could be a neat opportunity!
Price gapped up over the weekend and is pulling up from the channel bottom to the 38.2% Fib and mid-channel area of interest. A larger retracement could last until the very top of the channel and 61.8% Fib at .6550 while stochastic has a bit more room to climb.