Major Currencies Overview
The Greenback had a mixed run as traders had to digest a variety of factors, from a potential Fed rate cut to unease ahead of the G20 Summit meeting between Trump and Xi.
Fortunately this meeting didn’t go as bad as many expected, although some degree of trade uncertainty remains. Oh, and the U.S. NFP report is coming up so it should be an eventful week! Read more.
‘Twas a data-light week for the Loonie but that didn’t stop it from raking in pips and ending mostly positive, thanks to rising crude oil prices and improving sentiment.
This week, the focus would likely be on the upcoming Canadian jobs release as this could shape BOC policy expectations. The OPEC meetings are set to conclude today as well. Read more.
EUR & CHF
Without much on its calendar, the euro had a mixed performance as it reacted to counter currency action. The franc, on the other hand, gave up some ground on intervention fears.
It’s still a light schedule for both currencies this week, which could keep them sensitive to sentiment and counter currency moves. Do stay on the lookout for medium-tier Swiss reports, too! Read more.
Sterling chalked up yet another week in the red as Brexit “no deal” anxiety lingered while the race for the Prime Minister spot heats up.
Only the business PMI readings are up for release from the U.K. economy this time and, barring major surprises, the focus might still be on Brexit as usual. Read more.
Easing expectations from the BOJ kicked into high gear, dragging the yen to the bottom of the forex pile last week. It didn’t help that positive G20 expectations also weighed on safe-havens.
There are no top-tier catalysts lined up from Japan this time, which might keep yen pairs sensitive to the central bank’s bias and overall sentiment. Read more.
The Aussie was off to a running start, boosted by positive comments from RBA head Lowe, and kept up its strong pace throughout the week as risk appetite also improved.
The RBA statement is coming up this week and another rate cut might be in the works to ensure that the economy gets the support it needs. But how might AUD react? Read more.
The Kiwi was also on cloud nine last week as the RBNZ refrained from cutting rates again and risk appetite was on the higher-yielding currencies’ side.
The only release from New Zealand to watch out for this week is the quarterly NZIER business confidence report. Apart from that, stay on the lookout for changes in sentiment, too. Read more.
Charts to Watch:
This pair has formed lower highs connected by a descending trend line on its 4-hour time frame. Price looks due for another correction to this resistance level, and the Fib retracement tool shows that this lines up with the 61.8% level near the .9900 handle.
This also happens to coincide with a broken support level that might hold as resistance. Stochastic is pulling up for now, which means that buyers have the upper hand.
Here’s another potential retracement setup that’s already starting to play out. Guppy recently broke past the top of its ascending triangle and price is making a retest of this area, which is spanned by the 38.2% and 50% retracement levels.
Stochastic is just starting to turn lower from the overbought zone, though, so sellers might stay on for a bit longer. This could drag the pair to the lower retracement level at 136.85 before buyers take over.
Lastly, I’ve got a potential reversal play on EUR/JPY as the pair has completed its double bottom and is already testing the neckline. A break past this resistance around 123.15 could set off a climb that’s at least the same height as the chart pattern.
Stochastic is on its way down, though, so there may be another dip in the cards. If resistance keeps holding like a boss, the pair could slump back to the lows at 121.00 to form another bottom or continue further south.