Major Currencies Overview
First up, here’s a rundown of how the major pairs performed in the past week:
Improving U.S.-China trade ties and upbeat data from Uncle Sam combined forces to keep the dollar in mostly positive territory last week.
There are no major catalysts lined up from the U.S. economy this week, likely leaving the dollar sensitive to market sentiment and counter currency action. Read more.
The Loonie chalked up a mixed but net positive week as it reacted to changes in global risk sentiment and crude oil prices.
Canada’s CPI and retail sales reports are due this week, but the BOC policy decision might take center stage, especially if the central bank adjusts its stance. Read more.
EUR & CHF
Both the euro and franc closed out the week in positive territory as the economic outlook for the region improved.
The ECB decision and euro zone flash PMI readings are due next, but there are no major releases that could push the Swiss currency around. Read more.
Sterling ended the week as a net loser as U.K. reports disappointed and supported hopes for an interest rate cut.
Jobs data and flash PMI readings are due from the U.K. this week and another round of downbeat figures could put more downside pressure on the currency. Read more.
The yen found itself at the bottom of the forex pile as the pickup in risk-taking weighed on the lower-yielding currency.
The BOJ decision is coming up and many had been foreseeing a dovish announcement this week. If so, the yen could chalk up more losses against its peers. Read more.
The lack of top-tier catalysts from the Australian economy kept the currency sensitive to risk flows, which were in turn supported by improving trade ties between the U.S. and China.
Next up, flash PMI readings and jobs data from the Land Down Under could push the Aussie around, along with the PBoC rate decision. Read more.
The Kiwi had a quiet week since there were no major reports released, but the currency managed to catch pips from risk-taking.
The quarterly CPI report from New Zealand is one to watch out for this time as it could set the tone for future RBNZ decisions. Read more.
Charts to Watch:
Reversal alert! EUR/USD is forming a head and shoulders pattern on its 4-hour time frame and is gearing up for a break of support. If that pushes through, a selloff of the same height as the chart formation could ensue.
However, stochastic is already indicating oversold conditions or exhaustion among sellers. Turning back up could confirm that buyers are ready to return and possibly push price back up to the nearby resistance at 1.1175.
This pair has been trending lower on its short-term time frames as price moves inside a descending channel on its 1-hour chart. A correction is ongoing, with price currently testing the 50% Fibonacci retracement level.
A larger pullback could last until the 61.8% Fib that lines up with the channel top near the .9700 handle. Stochastic is already on the move down, though, indicating that sellers are on top of their game.
EUR/CAD seems to be enjoying more downside momentum after price bounced off its descending channel top again. Support at the mid-channel area of interest is holding for now, but a break lower could take the pair to the channel support.
Stochastic is heading up, though, so bullish pressure is in play and could take EUR/CAD back to the channel resistance again.