Major Currencies Overview
First up, here’s a rundown of how the major pairs performed in the past week:
The Greenback closed out mostly in the red as the FOMC dashed hopes of potential rate hikes in the near future. Only medium-tier reports are lined up this week, which could leave the U.S. currency more sensitive to sentiment. Read more.
It was all about geopolitical updates and counter currency influences for the Loonie last week, but it still managed to end in the green, except against sterling. This time, Canada’s CPI and retail sales figures might dictate its direction. Read more.
EUR & CHF
Risk aversion was on the side of these lower-yielding European currencies early last week, with the shared currency extending its gains on the U.K. election results. Flash PMI readings are on this week’s docket. Read more.
Sterling staged a strong rally after the U.K. general election confirmed a big victory for the Conservatives, easing some Brexit uncertainties. The focus returns to economic data as CPI, jobs data, retail sales, and the BOE decision are due next. Read more.
The yen turned out to be a loser for the week as risk appetite improved later on, thanks to easing geopolitical risks. The spotlight will be on the BOJ this week as they announce their policy decision, although no major changes are expected. Read more.
The Aussie was off to a shaky start but managed to regain its footing as risk-taking returned later in the week. The RBA minutes and Australian jobs reports might be worth watching this time. Read more.
Despite the pickup in risk appetite, Kiwi bulls were unable to hold on to most of the gains. New Zealand’s quarterly GDP is up for release this week and should provide a bit more volatility for Kiwi pairs. Read more.
Charts to Watch:
This pair has been trending higher in the past weeks, forming higher highs and higher lows connected by an ascending channel on its 4-hour chart. Price is pulling back to the mid-channel area of interest that’s close to the 38.2% to 50% Fib levels.
Stochastic is still pointing down and has room to slide before reflecting oversold conditions, so a larger correction to the 61.8% Fib or the channel bottom around .6800 might be in order.
This euro pair recently busted through its resistance at the 121.00-121.50 area then zoomed up to a high of 122.65. Price is pulling back from here while stochastic makes its way down from the overbought zone.
The 100 SMA is still above the 200 SMA to indicate that the path of least resistance is to the upside. In other words, support is still likely to hold than to break, and EUR/JPY could find some buyers at the 50% to 61.8% Fib levels.
Here’s one for the shorter-term traders out there! NZD/JPY has been trending higher above a rising trend line and looks prime for a pullback.
Price is already finding support at the 38.2% Fib that lines up with the 72.00 handle, though, and stochastic is starting to turn up from the overbought zone to confirm a return in bullish pressure.
Still, a larger pullback could last until the 61.8% level closer to the trend line and the dynamic support at the moving averages.