Major Currencies Overview
The Greenback closed lower against the rest of its forex counterparts as U.S. economic reports turned out mostly weaker than expected while risk appetite improved.
The only pieces of data lined up for the week are the durable goods orders figures, so it could still be all about market sentiment dictating dollar direction this time. Read more.
The Loonie chalked up a net negative week as it was bogged down by weaker crude oil prices, shrugging off a few positive data points.
Canada’s retail sales figures are up for release next, and improvements are eyed. Apart from that, the BOC Business Outlook Survey might also be worth looking at. Read more.
EUR & CHF
Both the euro and franc were able to rake in some gains as a bit of risk aversion and Brexit optimism came into play.
It’s gonna be another busy week for the shared currency, with the industry PMIs and ECB statement lined up, while the franc could take its cues from risk sentiment. Read more.
Sterling had another stellar run as Brexit optimism kicked into high gear in anticipation of a vote on the latest version of the transition deal.
However, a few setbacks still came in play over the weekend, and another set of plot twists could come in the days ahead. Read more.
The lower-yielding yen chalked up yet another losing week as geopolitical tensions appeared to fade and risk sentiment improved.
There’s not much in the way of top-tier data from Japan this week, but the flash manufacturing and services PMIs might be worth looking into. Read more.
It was a mixed one for the Aussie as it tossed and turned to trade updates, geopolitical tensions, jobs data, and overall market sentiment.
Up ahead, the flash PMI readings from the Land Down Under are the only data points due this week, so sentiment could still be a major driving force. Read more.
The Kiwi was off to a rough start but still managed to catch some gains as risk sentiment turned later in the week.
New Zealand is scheduled to release its trade balance this week and analysts are expecting to see a smaller deficit. Read more.
Charts to Watch:
Reversal alert! AUD/USD is forming a double bottom pattern on its 4-hour time frame and is closing in on the neckline at the .6900 handle. A break above this resistance could set off a climb that’s at least 200 pips in height, which is the same size as the chart formation.
However, stochastic is already in the overbought region to signal that buyers are exhausted. Turning lower could indicate that sellers are taking over, possibly allowing the neckline resistance to hold and price to slide back to the lows at .6700.
Here’s another comdoll reversal setup for y’all! USD/CAD has created a double top on its 4-hour chart and already seems to be breaking below its neckline at the 1.3150 mark.
In that case, a drop of the same height as the chart pattern could be in order. Then again, stochastic is indicating oversold conditions or exhaustion among sellers, so a pickup in bullish pressure might still follow.
Not a fan of reversals? Here’s a trend setup you might like instead. EUR/JPY has formed lower highs and lower lows inside a descending channel on its daily time frame and looks ready to test the top.
Applying the handy-dandy Fib tool shows that the 50% level is close to the channel top while the 61.8% level coincides with an area of interest. Stochastic is already indicating overbought conditions so, if any of these Fib levels are able to keep gains in check, the pair could head back to the swing low at 115.80 or the channel bottom.