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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 Greenback found its way back to the losers’ bench last week as it took hits from mostly downbeat U.S. economic data and dovish Fed commentary.

This week, the focus could be on U.S. inflation and consumer spending data, with the PPI, CPI and retail sales figures all up for release. Read more.

CAD

The Canadian currency shrugged off somewhat downbeat economic reports after the BOC decided to keep rates unchanged and maintain its neutral tone.

There are no major catalysts from the Canadian economy this week, though, so the Loonie’s focus might be on overall sentiment and crude oil prices. Read more.

EUR & CHF

The euro had a mixed round, even though market watchers seem to be betting on rising odds of additional ECB easing. Meanwhile, the franc turned lower on improving risk appetite and talks of negative deposit rates.

The ECB will be making its monetary policy decision this week, and many expect some form of easing, whether in the form of deposit rate cuts or tiered asset purchases. Read more.

GBP

Brexit developments have been less than ideal in the previous week as PM Johnson had to deal with a rebel bill, a defeat in Parliament, and calls for a general election.

This week has the U.K. jobs figures up for release, but Brexit-related events like another vote for a general election and the royal assent on the Benn Bill might steal the show. Read more.

JPY

The yen was the biggest loser for the week on account of risk-taking stemming from easing geopolitical fears. It didn’t help that a reshuffling of Cabinet is due (no, not the KonMari kind) and there are talks of preemptive BOJ easing.

Japan has a data dump coming up this week, so this should give traders more clues on whether or not additional stimulus might be in the works from the central bank. Read more.

AUD

Risk appetite and a not-so-dovish RBA decision were enough to get the Aussie bulls going last week, allowing the currency to score big wins.

There’s not much in the way of data from the Land Down Under, but the Aussie might take its cues from China’s top-tier reports and changes in sentiment again. Read more.

NZD

The Kiwi was also on cloud nine in the previous week, even landing at the top spot as it banked on risk-taking and upbeat commentary from New Zealand’s Finance Minister.

Only the Business NZ manufacturing PMI is up for release this week, so the Kiwi might be pushed around by risk sentiment once more. Read more. 

Charts to Watch:

GBP/JPY: 4-hour

GBP/JPY 1-hour Forex Chart
GBP/JPY 4-hour Forex Chart

First up is this double bottom breakout on the 4-hour chart of Guppy. An uptrend of the same size as the chart formation might be in the works, but it looks like a pullback might need to happen first.

Applying the Fib tool on the latest swing low and high shows that the 38.2% to 50% levels span the broken neckline that could hold as support. In addition, a bullish divergence can be seen as price formed higher lows while stochastic drew lower lows.

AUD/CAD: 1-hour

AUD/CAD 1-hour Forex Chart
AUD/CAD 1-hour Forex Chart

This pair has been pacing back and forth inside a range on its 1-hour time frame, bouncing off support at .8925 and resistance around .9045. Price is currently testing resistance and might be eyeing another move to support from here.

However, stochastic is already dipping in the oversold region to signal exhaustion among sellers. At the same time, AUD/CAD has formed higher lows to hint that buyers are trying just a little bit harder to push past the range top.

CHF/JPY: 1-hour

CHF/JPY 1-hour Forex Chart
CHF/JPY 1-hour Forex Chart

Here’s another yen pair for y’all! CHF/JPY recently busted through its descending trend line resistance on the 1-hour time frame to signal that a reversal from the downtrend is due.

Price is in the middle of a pullback while stochastic is turning lower to show that sellers have the upper hand. The 38.2% level seems to be keeping losses in check for now, but price might dip lower to test the 61.8% Fib that lines up with the broken trend line.