Major Currencies Overview
Even though the Fed cut interest rates as expected, the not-so-dovish statement allowed the Greenback to catch some wins against its peers.
There’s not much in the way of top-tier data from the U.S. this week, so market watchers could keep their attention on trade developments and overall sentiment. Read more.
Just when it seemed that the Loonie was in for a strong weekly performance, trade tensions popped up later on and erased most of its gains.
The only major report from Canada due this week is its employment release on Friday, and here’s what to expect. Read more.
EUR & CHF
ECB easing expectations put downside pressure on the shared currency while the franc was able to snatch some gains from a pickup in risk aversion.
There are no major reports due from both economies this week, which could leave the euro and franc sensitive to overall market sentiment as usual. Read more.
Preparations for a “no deal” Brexit outcome are already underway, dragging sterling in the red for yet another week. It didn’t help that the BOE downgraded growth forecasts, too!
This week, the U.K. preliminary GDP reading for the second quarter of the year is up for release and its outcome could determine BOE easing odds. Read more.
Not even a dovish BOJ outlook was enough to dampen the yen’s spirits, as risk aversion took hold of the markets when Trump announced another set of tariffs on China.
There are no major reports up for release from Japan this week, which means that the yen could continue to take cues from sentiment and counter currency action. Read more.
Economic reports from the Land Down Under were mostly upbeat, but the Aussie was unable to stay in the green as trade tensions returned in the latter half of the week.
The RBA rate statement is scheduled this week and many are bracing for a dovish announcement, even though the consensus is that the central bank could sit on its hands for now. Read more.
The Kiwi also closed the week in the red as New Zealand’s data was mostly weak and traders are pricing in another RBNZ rate cut.
The RBNZ could seal the deal for a 0.25% cut during their monetary policy decision this week, possibly even keeping the door open for another easing move. Read more.
Charts to Watch:
Reversal alert! GBP/NZD made a couple of attempts to break below support around the 1.8375 mark but failed, creating a double bottom pattern on its 4-hour chart.
Price is currently testing the neckline around the 1.8725 level, and a break higher could confirm that an uptrend is underway. This could last by the same height as the chart formation, which spans roughly 350 pips. However, stochastic is already indicating overbought conditions to suggest that resistance might still hold.
Bounce or break? GBP/CAD is currently testing a key support level around the 1.6000 major psychological mark, still deciding whether to keep sliding lower or to move right back up.
This floor has been pretty solid over the past three years, which suggests that buyers are watching this level closely. Stochastic is already in the oversold region as well, so bullish pressure might return from here. If not, another sharp tumble could ensue!
Lastly, here’s one for the gutsy counter trend traders right here! This pair has been trending higher inside an ascending channel on the daily time frame and seems to be setting its sights on the top around 1.7300-1.7350.
Price has broken above the mid-channel area of interest to signal upside momentum, but stochastic is already dipping into the overbought zone to signal that buyers are starting to feel exhausted. If resistance holds, another dip to the channel bottom might follow.