Major Currencies Overview
Dollar pairs could be in for a lot of volatility this week as the FOMC will be printing the minutes of its latest policy meeting, possibly containing clues on what the central bank’s next moves might be. Oh, and the Jackson Hole Symposium is coming up later in the week, too! Read more.
Canada has a couple of top-tier economic reports lined up this week, namely its CPI and retail sales figures for July. Stronger than expected results could downplay BOC easing expectations while disappointing figures might fuel rate cut hopes. Read more.
EUR & CHF
Can the euro and franc bank on safe-haven demand once more? Or will they be pushed around by their counter currencies? Flash PMI readings are up for release from the euro zone this week, and another set of declines are eyed. Read more.
There’s not much in the way of top-tier reports due from the U.K. this week, which means that market attention could be fixed on Brexit developments. The latest turn of events haven’t been so positive, especially since a government document on the worst-case scenario has just been leaked. Read more.
The yen paused from its climb in the previous week as a bit of risk-taking returned to the markets. There are no major reports lined up from the Japanese economy this week, which leaves yen pairs to take their cues from sentiment once more. Read more.
The RBA is set to release the transcript of their latest monetary policy huddle, possibly dropping hints on what their next moves might be. Recall that the central bank decided to pause with their cuts last time. Read more.
The quarterly retail sales release is the main economic event for the Kiwi this week, although the higher-yielding currency could still keep taking cues from overall market sentiment. Read more.
Charts to Watch:
First up is this potential counter trend situation on the 4-hour time frame of EUR/CHF. Price has formed lower lows around the bottom of its descending channel while stochastic had higher lows, creating a bullish divergence.
A bounce off the channel bottom could take price back up to the top around the 1.0950 minor psychological mark or at least until the mid-channel area of interest. However, a break below support around 1.0840 could set off a sharper slide.
Now let’s check in on how GBP/CAD’s long-term floor at the 1.5900 level is holding up. It looks like pound bulls are trying to defend this area and might be able to sustain a stronger bounce!
After all, stochastic is turning higher after recently dipping into the oversold region, indicating that buyers are regaining the upper hand. The next area of interest seems to be around 1.6600, but another attempt to break below support might trigger a steep drop.
Lastly, here’s a classic break-and-retest setup that’s popping up on the daily time frame of GBP/CHF. The pair recently tumbled below support at the 1.2500 handle and dipped to 1.1675 before starting to pull up. Stochastic is just beginning to turn higher after a long stay in the oversold region, suggesting that buyers could be ready to take over from here.