Major Currencies Overview
The Greenback sulked toward the losers’ table last week as downbeat data spurred Fed rate CUT expectations, and trade tensions didn’t help either.
U.S. CPI and retail sales figures are the main economic releases that could push the dollar in a strong direction this time, and here’s what analysts expect. Read more.
Stronger than expected data from Canada helped the Loonie stage a strong rally late in the week, even though crude oil prices were mostly lower.
However, the lack of any top-tier or medium-tier reports from Canada in the next few days could leave the currency more sensitive to overall market sentiment. Read more.
EUR & CHF
Euro and franc price action turned out mixed in the previous week as both were pushed around by counter currency flows, along with the ECB decision and overall sentiment.
The SNB decision is coming up, and the usual slew of jawboning remarks could be in the cards. As for the euro, geopolitical risks and Draghi’s speech are worth keeping tabs on. Read more.
It was another week in the red for pound pairs as persistent Brexit uncertainties were in play, and a couple of economic releases also missed their marks.
The focus could be on the next U.K. Prime Minister this time as this could seal the fate of Brexit negotiations and whether or not a “no deal” situation could emerge by October. Read more.
It was also a losing week for the Japanese yen as it won out only against the Greenback but stayed in the bottom of the forex pile, mostly due to global easing expectations.
There are no major reports lined up from the Japanese economy in the coming days, which could leave the yen waiting for clues from market sentiment and bond yields. Read more.
The RBA cut interest rates by 0.25% as expected, so the Aussie took some hits but surprisingly managed to outpace the dollar, yen, and pound.
A few top-tier Chinese reports lined up this week could spur volatility for Aussie pairs while the Australian jobs report could have hints on whether another RBA cut might be in the works. Read more.
The Kiwi found its wings last week, thanks to a weaker U.S. dollar and some positive remarks from RBNZ officials.
Risk sentiment and dollar direction could be the main drivers of Kiwi price action as there are no top-tier catalysts lined up from New Zealand. Read more.
Charts to Watch:
Don’t look now, but this pair is gearing up for a test of the long-term former support around the 72.50 minor psychological mark!
This lines up with the 50% Fibonacci retracement level, and holding as resistance could push NZD/JPY back to the swing low. Stochastic is still on the move up and has room to climb before hitting the overbought zone, which means that there might be some bullish pressure present.
Here’s one for the short-term traders out there! EUR/NZD recently broke below an ascending trend line visible on the longer-term charts, but a quick pullback to this area of interest might be due.
This area is spanned by the 50% to 61.8% levels where sellers might be waiting to join in and push the pair back to the swing low or lower. Stochastic is already heading down from the overbought zone after a test of the 38.2% Fib, though, so bearish momentum might already be in play.
Yep, one more break-and-retest play! EUR/JPY is also in the middle of a correction to the Fib levels on its 4-hour chart, and a move to the former support level around 124.00 to 124.50 might follow.
If this area of interest is enough to keep gains in check, the pair could sink back to the swing low at 120.78 or lower. Bears might even be ready to return once stochastic starts heading south as well.