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Start your trading prep with a quick review of last week’s forex action from my buddy Pip Diddy, an overview of catalysts lined up for the major currencies, and the charts to watch this week.
FX Week Ahead

Major Currencies Overview

USD

The dollar sank to the bottom of the forex pile as Fed head Powell and his fellow policymakers confirmed scope for interest rate cuts.

Another speech by Powell and the U.S. retail sales figures are up for release this week, so it could be another action-packed one. Read more.

CAD

The Loonie had a mixed round in the previous week, although it’s worth noting that it dipped during the BOC statement when the central bank seemed more dovish than before.

Canada has its CPI and retail sales reports coming up, so traders would likely pay close attention to the results to gauge if the BOC might need to cut soon. Read more.

EUR & CHF

The euro was off to a good start but gave up most of its gains when the ECB minutes came in more dovish. On the flip side, the Swiss franc took advantage of an empty calendar and dollar weakness.

There are no major reports coming up next from both economies, so traders might take cues from overall sentiment and dollar direction again. Read more.

GBP

Sterling had a pretty quiet week, but it was apparent that Brexit concerns lingered enough for the BOE to share some concerns in their Financial Stability Report.

The focus could shift to the top-tier reports like the jobs data, CPI, and retail sales figures lined up this week. Read more.

JPY

The Japanese currency had a choppy week but was able to take advantage of dollar weakness in the latter part.

It’s a data-light week for the Japanese economy, which could leave the yen at the mercy of dollar price action and market sentiment again. Read more.

AUD

Just when it seemed that the Aussie was in for another week in the red, the higher-yielding currency was able to pull up later on thanks to dollar declines.

Volatility could pick up for the Aussie early on as China has its data dump scheduled. Soon after, Australia will be printing its jobs figures. Read more.

NZD

The Kiwi took the crown in the previous week as it soared when risk appetite picked up on increased prospects of lower U.S. borrowing costs.

New Zealand’s quarterly CPI is the main event for the Kiwi this week as this could determine whether or not another RBNZ cut is in the cards. Read more.

Charts to Watch:

AUD/JPY: 4-hour

AUD/JPY 4-hour Forex Chart
AUD/JPY 4-hour Forex Chart

This pair could be in for a reversal from its slide as the pair formed an inverted head and shoulders pattern on its 4-hour time frame. A break higher could set off a climb that’s the same height as the formation, which spans around 200 pips. Just be careful since stochastic is already indicating overbought conditions!

EUR/AUD: Daily

EUR/AUD 4-hour Forex Chart
EUR/AUD Daily Forex Chart

Breakout alert! EUR/AUD looks ready to slide below the support of its ascending triangle and go on a slide that’s the same size as the pattern. In addition, a head and shoulders pattern has formed to add confirmation that the recent rally could turn soon.

However, stochastic is hovering around the oversold region to show that bears are exhausted and that buyers could take over soon, possibly taking price back to the triangle top.

CAD/JPY: Daily

CAD/JPY 4-hour Forex Chart
CAD/JPY Daily Forex Chart

Here’s another triangle play for y’all! CAD/JPY bounced off the bottom of its descending triangle pattern visible on the daily time frame and might be due for a move back to the top. However, stochastic is in the overbought zone to signal bullish exhaustion, so another retreat to the support around 80.60 might follow.