Major Currencies Overview
Just when it seemed that the Greenback was in for a positive run, Trump surprised the markets with tariffs on Mexico and sent the U.S. currency reeling.
The main economic event for the U.S. might be the non-farm payrolls release later in the week, but market watchers are likely to stay focused on trade-related updates. Read more.
Not even a relatively upbeat BOC statement was enough to keep the Loonie from tumbling against majority of its rivals, as crude oil prices and risk-off flows dragged it down.
These market factors could stay in play during the light first half of the week, before Canada’s economic calendar gets busy with the release of the trade balance and employment figures later on. Read more.
EUR & CHF
The franc scored another winning week thanks to trade-related risk-off flows while the euro had a mixed run.
The ECB will be making its monetary policy statement this week and also releasing updated economic forecasts, along with more deets on their new TLTRO program. Read more.
Sterling edged lower throughout the week as Brexit uncertainties trumped upbeat medium-tier data. The EU Parliament elections results didn’t seem bullish for the U.K. currency either.
Industry PMI readings are scheduled for the first half of the week while BOE head honcho Carney’s speech could shake things up towards the second half. Read more.
The lower-yielding yen charged its way up to the top of the forex pile once more, taking advantage of risk aversion and falling global bond yields on account of heightened trade tensions.
Other than BOJ Governor Kuroda’s speech on Thursday, there are no major catalysts lined up from the Japanese economy, so market sentiment could keep pushing yen pairs around. Read more.
The Aussie fought to hold on to most of its gains, despite worsening U.S.-China trade relations and RBA rate cut speculations.
The Australian central bank will be announcing its monetary policy decision this week and a cut seems to be priced in. The quarterly GDP report and April retail sales figures are also due. Read more.
The Kiwi found itself near the bottom of the forex pile, only scoring wins against sterling, as risk-off flows took their toll on the higher-yielding commodity currency.
The coast is clear in terms of economic data from New Zealand this time, which might leave the currency extra sensitive to sentiment again. Read more.
Charts to Watch:
Time for another quick retracement on this one? Price recently tumbled below support around the 75.50 minor psychological mark, but a pullback might be in play.
Aussie bulls might be back in the game as stochastic pulls up from the oversold region and has plenty of room to climb before indicating exhaustion. The 50% Fib lines up with the area of interest, so sellers might be waiting to return right there.
Reversal alert! CAD/CHF might be in for a turnaround from its uptrend as it completes a double top formation on the 4-hour time frame. Price is just testing the neckline around the .7400 major psychological mark, and a break lower could send the pair reeling by 225 pips or the same height as the chart formation.
Bounce or break? EUR/CAD is testing the top of its symmetrical triangle pattern visible on the 4-hour time frame.
If sellers defend the triangle resistance around the 1.5100 handle, the pair could fall back to support around 1.4950. A break higher, on the other hand, could spur a climb that’s roughly the same size as the triangle that spans approximately 300 pips.
Stochastic is heading up to show that there’s some buying energy left but is also approaching overbought levels to signal a possible takeover by sellers soon.