Major Currencies Overview
Mostly downbeat economic data, combined with persistent trade tensions, dragged the Greenback close to the bottom of the forex pile last week. Mixed views from Fed officials didn’t help either!
The U.S. preliminary GDP reading, as well as the core PCE price index, are up for release later in the week. A few more Fed policymakers are set to give testimonies, too. Read more.
The Loonie was off to a positive start for the week as it banked on rising crude oil prices. Things turned sour a few days in, though, as higher oil stockpiles erased those gains.
The BOC is gearing up to make its monetary policy statement this week and, even though no rate changes are expected, traders will keep close tabs on this even to see if a shift in bias will be made. Read more.
EUR & CHF
Despite some intervention talk, the Swiss franc chalked up another week in the green while the euro had one of its mixed runs as political uncertainty loomed.
Results of the European parliamentary elections could continue to impact euro price action in the days ahead, especially since there are no top-tier reports due. Read more.
Sterling was stuck at the very bottom of the forex heap as PM May’s failure to pass the transition deal and keep her party united ultimately led to her decision to resign.
All eyes and ears are likely to be on the Prime Minister race as a number of names are already thrown in the hat. No other major economic events are lined up in the U.K. Read more.
The yen had a mostly positive run, snagging losses only against the franc and the Aussie. Data was mostly weak, however, and the gains came mainly from risk-off flows.
A handful of low-tier reports like the preliminary industrial production and retail sales figures are lined up, which might keep the yen sensitive to sentiment. Read more.
The Aussie had one of its choppier weeks as it was bogged down by dovish RBA minutes but eventually took advantage of anti-dollar action.
Australian building approvals and private capital expenditure data are due this week, and China’s official manufacturing and non-manufacturing PMI releases might be big movers as well. Read more.
The Kiwi was also off to a shaky start but eventually made quite the turnaround as it took advantage of counter currency weakness.
The RBNZ financial stability report is coming up next, and insights on economic forecasts could give clues on whether another rate cut is likely or not. Read more.
Charts to Watch:
This pair has been pacing back and forth inside a range, with support around the 1.3380 level and resistance at the 1.3500 major psychological mark. Price recently bounced off the top and is halfway through on its move back to support.
However, stochastic is already hanging around the oversold region to signal that sellers are exhausted and might need a break. Turning higher could signal that buyers are ready to jump in here and take USD/CAD back to the resistance.
Break-and-retest, anyone? This pair recently crashed below the support of its ascending channel on the 4-hour chart but might be due for a correction as it bounced off the 1.6900 area.
The Fib retracement tool shows that the 61.8% level lines up with the broken channel bottom around 1.7400 and also an area of interest. However, stochastic is already in the overbought zone to hint that buyers are tired and that sellers could take over soon, possibly leading to a shallow pullback to the 38.2% Fib only.
Here’s another possible pullback but within an ongoing trend this time. This pair is starting to form a descending channel on its 4-hour chart and might make a correction to the top at the 61.8% Fib.
Stochastic is indicating overbought conditions or exhaustion among buyers, which suggests the possibility of a small correction only until the mid-channel area of interest or 38.2% Fib. Turning back down could show that sellers are ready to return and push the pair back to the swing low at .9201 or the channel bottom.