Major Currencies Overview
Positive trade developments carried the Greenback to the top of the charts last week, and upbeat medium-tier data also gave an extra boost.
Dollar pairs might be in for another set of big moves as the August NFP report is up for release on Friday. What should you expect? Read more.
The Canadian currency also had a strong showing for the previous week, thanks mostly to a pop higher in crude oil and improving risk sentiment.
A couple of event risks are lined up from Canada this time, namely the BOC interest rate decision and the Canadian jobs report due later in the week. Read more.
EUR & CHF
Both the euro and franc had a rough time in the previous week as downbeat economic updates and political tensions hogged the spotlight.
The Swiss currency might be on edge this week as SNB head Thomas Jordan is set to give a testimony and would likely jawbone the franc, possibly even reviving talks of negative rates. Read more.
Sterling chalked up a mixed week as it seemed more sensitive to counter currency flows. Still, it made a strong one-way move on news of a temporary Parliament shutdown.
All eyes and ears should still be on Brexit developments in the coming week, especially since PM Johnson already got the Queen’s approval for a prorogation. Read more.
Yen pairs also wound up mixed for the week as counter currencies took the lead and risk sentiment flipped back and forth. There has also been some buzz about intervention and additional BOJ easing.
The coast is clear in terms of top-tier economic reports from Japan, so yen traders might put their focus on overall market sentiment and trade-related updates. Read more.
The Aussie shrugged off downbeat reports from the Land Down Under as the commodity currency banked mostly on positive trade developments between the U.S. and China.
There are plenty of top-tier reports due from Australia this time, not to mention the RBA interest rate decision, so brace yourselves for a potentially volatile ride! Read more.
It was another week in the red for the Kiwi as remarks from RBNZ head Orr called for an increase in capital requirements for the four biggest banks.
Without any major reports due from New Zealand, the Kiwi might simply take its cues from data from China and Australia, as well as any changes in sentiment. Read more.
Charts to Watch:
First up is this descending channel on the daily time frame of CAD/JPY. Price is finding support at the very bottom and could be due for a pullback to the top while stochastic moves north.
The 61.8% Fib lines up with the top of the channel while the 38.2% level is closer to the mid-channel area of interest. If any of the Fibs hold as resistance, the pair could resume its drop to the swing low or channel support.
This pair failed in its last two attempts to break below the 1.0300 handle, creating a double bottom formation on its daily time frame. Price is currently testing the neckline resistance at 1.0700, and a break above this could set off a climb that’s around the same height as the chart pattern.
Take note, however, that stochastic is already indicating overbought conditions and turning lower could signal a return in selling pressure.
Here’s another potential reversal for y’all! USD/CHF is also forming a double bottom and is just heading up to test the neckline resistance around the .9950 minor psychological mark.
A break above this could set off a rally that’s around 250 pips in height, which is the same size as the reversal pattern. However, stochastic is already indicating overbought conditions or exhaustion among bulls, so another dip to the bottoms might follow.