Major Currencies Overview
The scrilla sank to the very bottom of the forex pile after the FOMC signaled scope for a rate cut, and economic reports underscored this dovish tilt.
This week, the spotlight could be on the Trump-Xi meeting during the G20 Summit and whether or not they could shake on a trade deal. Read more.
The Loonie was off to a positive start on strong CPI readings and higher crude oil, but these gains were returned upon seeing downbeat jobs and retail sales figures.
The OPEC meetings this week could set the tone for crude oil price action while risk sentiment influenced by the G20 Summit could also push the Loonie around. Read more.
EUR & CHF
Both currencies chalked up one of their stronger weeks, with the franc even scoring gains across the board. The euro was also able to benefit from dollar weakness and upbeat flash PMI figures.
There are hardly any major reports due from the euro zone or Swiss economy this time, so medium-tier releases like the flash CPI reports might spur volatility. Other than that, risk sentiment and dollar direction remain major themes, too. Read more.
It was another week in the red for pound pairs as the BOE turned less hawkish in their latest statement by downgrading Q2 forecasts on account of trade tensions and Brexit risks.
The main sterling even this week is the BOE Inflation Report hearings, which should provide more insight on policymakers’ Brexit game plan. Read more.
The yen had a mixed week as it was pulled in opposite directions by risk sentiment, weaker Japanese data, and a dovish BOJ statement.
A handful of low-tier Japanese data are on the docket this week, but it’s likely that yen pairs might take their cues from sentiment and dollar direction. Read more.
The Aussie spent the week mostly in the red as the RBA Bulletin signaled a potential rate cut, but the currency was able to cop some gains versus the dollar.
There are no major releases from the Australian economy this week, leaving the currency to take its cues from market sentiment stemming from the Trump-Xi meeting. Read more.
Unlike its buddy, the Kiwi actually had a positive run and was able to close ahead of its forex peers, except against the Swiss franc. A smaller trade deficit and as-expected GDP may have kept further RBNZ rate cut expectations in check.
The RBNZ will be making its announcement this week and would probably keep interest rates on hold for the time being. Still, keep tabs on the Trump-Xi meeting since this would likely impact overall sentiment. Read more.
Charts to Watch:
This pair could be in for a reversal on its selloff as it formed a complex double bottom on its 4-hour time frame. Price is inching closer to the neckline around the .7000 major psychological mark, and a break higher could set off a climb that’s the same height as the pattern. However, stochastic is already hovering around the overbought zone to show that buyers need a break.
Here’s one for the trend traders out there! AUD/CAD is inching lower on its 4-hour time frame and is in the process of forming a descending trend line.A pullback to this resistance might be in the works, and the 50% level lines up with the area of interest around the .9250 minor psychological mark. Stochastic is still heading up to show that there is some bullish pressure in play, and the oscillator has a bit of room to climb before reaching the overbought zone.
Lastly, I’ve got another potential reversal setup as CAD/JPY makes an inverted head and shoulders pattern on its 4-hour chart. Price just got rejected on the test of the neckline, though, and might be due to gather more bullish energy before attempting another break higher.
If that pushes through, price could climb by the same height as the chart pattern, which spans 80.00 to around 81.50. Stochastic is pointing down but closing in on the oversold region to signal potential exhaustion among sellers.