Major Currencies Overview
The Greenback edged steadily higher throughout the previous week and eventually found itself at the very top spot, thanks mostly to risk-off flows. Woot woot!
The FOMC decision is coming up and market watchers are keen to find out if the central bank is being rattled by trade tensions and recent jobs data misses. Read more.
Even with geopolitical risks and crude oil price declines, the Canadian dollar was able to keep its head mostly afloat in the previous week.
Canada’s CPI reports are due early in the week and retail sales data later on, but there’s a chance the Loonie might wait for cues from overall market sentiment once again. Read more.
EUR & CHF
Geopolitical risks and ECB stimulus hopes dampened the euro’s spirits last week while the franc was also pulled down by some SNB jawboning. Still, both currencies were able to chalk up a mixed run.
There are no major reports due from the Swiss economy while the euro zone has its flash PMI readings coming up on Friday. Read more.
The race for the next U.K. Prime Minister is heating up, but pound traders still seem wary of a “no deal” Brexit outcome. That didn’t stop the currency from catching a few pips, though.
A couple of top-tier economic releases are scheduled this time, but the main event will be the BOE decision and MPC minutes. Any adjustments this time? Read more.
The safe-haven yen was also a big winner for the week, second only to the U.S. dollar, as risk-off flows were in play for the most part.
The upcoming BOJ statement might rock the forex boat, though, as policymakers have previously hinted at the possibility of easing. Read more.
The Australian dollar dug a deeper hole for itself as it sank near the bottom of the forex pile while risk aversion gripped the markets and data disappointed.
Other than the RBA minutes, there are no major economic reports lined up from the Land Down Under, which could leave the Aussie at the mercy of sentiment still. Read more.
The Kiwi was the biggest loser of the week as the higher-yielding currency was bogged down by risk aversion and downbeat reports.
New Zealand’s quarterly GDP is up for release and might provide the Kiwi a bit of reprieve if it comes in stronger than expected. But will it? Read more.
Charts to Watch:
Heads up, euro bulls! This pair is keeping its head above the long-term area of interest visible on the daily time frame. If it holds, EUR/USD could recover to the swing high and carry on with a reversal from the slide.
The area of interest lines up with a broken descending trend line that had been holding since the start of the year. This also coincides with the 61.8% Fibonacci retracement level that might be enough to keep losses in check.
Here’s another potential swing play for the longer-term traders out there! NZD/CAD seems to have completed its retest of the broken double top neckline, likely setting its sights lower from here.
The Fibonacci extension tool shows the next potential downside targets, with the full extension lining up with the swing low just above the descending channel support.
However, stochastic is already closing in on the oversold region to suggest that sellers might be feeling exhausted. If so, the mid-channel area of interest might hold as support once more.
It’s another break-and-retest setup, fellas! USD/CAD recently tumbled below a rising trend line seen on the 4-hour chart and is now pulling up for a retest.
This former support turned resistance lines up with the 50% level at the 1.3400 major psychological mark, so sellers might be waiting to return at this area. At the same time, stochastic is already indicating overbought conditions, and turning south could confirm that bears are back in the game.