Major Currencies Overview
First up, here’s a rundown of how the major pairs performed in the past week:
Easing geopolitical tensions and improving business conditions buoyed the Greenback higher against most of its peers last week, although it gave up some ground during the NFP release.
Up ahead, inflation reports and retail sales data are the ones to watch, along with speeches by some FOMC members. Read more.
The Loonie chalked up a mixed but mostly negative run in the previous week as crude oil eased up on its rallies on fading Middle East tensions.
It’s gonna be a light one in terms of data from Canada this time, so the currency could take its cues from market sentiment and commodity price action. Read more.
EUR & CHF
The lack of major updates from both the euro zone and Swiss economy kept their currencies sensitive to risk sentiment and counter currency flows.
The release of the ECB meeting minutes and Chairperson Lagarde’s testimony are the top-tier catalysts for the shared currency this time. Read more.
Sterling pairs were off to a strong start thanks to upbeat PMI readings, but the British currency gave up some ground on BOE Governor Carney’s downbeat remarks.
Consumer spending and inflation data are on this week’s docket, possibly providing clues on how BOE officials might vote next. Oh, and one of the dovish dissenters is scheduled to testify, too! Read more.
The safe-haven yen turned out to be the biggest loser as risk appetite improved on account of easing Middle East tensions.
A handful of production-related reports and a speech by BOJ Governor Kuroda could bring in more volatility for the yen this week. Read more.
The bush fires in the Land Down Under seem to be dragging the Aussie south, preventing it from taking advantage of the pickup in risk-taking last week.
China’s upcoming data dump, along with a few housing-related reports from Australia, could determine where AUD pairs are headed this week. Read more.
The Kiwi moved mostly sideways against its peers, even though risk sentiment improved and global dairy prices picked up.
The lack of top-tier events in New Zealand this week could keep the currency sensitive to risk flows and counter currency action. Read more.
Charts to Watch:
First up, here’s an update on the EUR/NZD downtrend we had our eyes on last week. The pair is still hovering around the descending trend line resistance as buyers and sellers are battling it out.
A tiny double top seems to have formed right at the ceiling, which lines up with the 50% Fib level and a former support area. A break below the neckline around 1.6700 could send the pair to new lows, but stochastic is already pulling up from the oversold region to signal that buyers are returning.
Break and retest situation, anyone? AUD/USD recently fell through its rising trend line on the 4-hour time frame to suggest that a reversal from the uptrend might follow.
The pair is currently pulling up to the broken trend line that coincides with the 50% Fib, probably to gather more bearish pressure before resuming its slide. Stochastic is already indicating overbought conditions or exhaustion among buyers, so resistance is likely to hold.
If so, a head and shoulders pattern could be completed, and a break below the .6850 lows or neckline could set off a longer-term slide.
Up for catching the bullish momentum on this one? AUD/JPY is setting its sights higher as it breached the mid-channel area of interest and aims for the top around the 77.50 minor psychological mark.
Stochastic is already reflecting exhaustion among buyers, though, so the top of the channel is more likely to hold than to break. If you’re gutsy enough to take a countertrend play at the top, make sure you practice proper risk management!