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Start your trading prep with an overview of catalysts lined up for the major currencies and the charts to watch this week.
FX Week Ahead

Major Currencies Overview

First up, here’s a rundown of how the major pairs performed in the past week:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

USD

The Greenback had a mixed run but ended up net positive thanks to a pickup in risk aversion later in the week.

The FOMC statement is coming up, but some are betting that this might just be a non-event since the Fed isn’t likely to change interest rates just yet. Read more.

CAD

The Loonie sold off sharply during the BOC statement last week as the central bank sounded much more dovish than expected.

Only the monthly GDP reading is due from Canada this time, so the currency might take more cues from crude oil and overall sentiment. Read more.

EUR & CHF

The euro drew some support from upbeat medium-tier data early but soon caved to its counterparts when the ECB mentioned that risks were still tilted to the downside.

Only a handful of medium-tier reports are lined up from the euro zone this week while the franc has low-tier data due, so sentiment might be the main driver of price action. Read more.

GBP

Sterling drew a lot of support from upbeat jobs data during the first half of the week then improving PMI readings later on, spurring hawkish BOE vibes.

The central bank will be making its actual policy decision this week and probably keep rates unchanged, with a couple of dissenters still likely voting to cut. Read more.

JPY

The yen soared to the top spot last week as it drew support from risk-off flows and upbeat medium-tier Japanese data.

Another batch of medium-tier reports is on this week’s docket and strong figures could continue to keep the currency afloat, along with risk aversion. Read more.

AUD

Employment data from Australia turned out strong enough to dampen RBA rate cut expectations, but the Aussie was bogged down by risk aversion.

Quarterly consumer and producer inflation figures are up for release this time, and these should provide more insight on the RBA’s potential moves. Still, risk sentiment could be the main driver for price action. Read more.

NZD

The Kiwi managed to shrug off risk aversion as it scored gains from stronger than expected mid-tier and top-tier data.

Only the trade balance is up for release from New Zealand this week, leaving the Kiwi more sensitive to risk flows in the coming days. Read more.

Charts to Watch:

EUR/GBP: 1-hour

EUR/GBP 1-hour Forex Chart
EUR/GBP 1-hour Forex Chart

Here’s a textbook retracement play for y’all! EUR/GBP recently fell through support around the .8475 area and looks ready for a retest of this area of interest. The 100 SMA is below the 200 SMA to indicate that resistance is more likely to hold than to break while stochastic is already reflecting exhaustion among buyers.

USD/JPY: 4-hour

USD/JPY 4-hour Forex Chart
USD/JPY 4-hour Forex Chart

USD/JPY has been trending higher as its higher highs and higher lows formed a rising channel on its 4-hour time frame. Price just tumbled below the mid-channel area of interest and is setting its sights on the very bottom of the channel around 108.50.

Stochastic is hanging around the oversold region to suggest that sellers might want to take a break and let buyers take over. The 100 SMA is still above the 200 SMA for now, but price has also broken below these dynamic inflection points to hint that bears are getting stronger.

NZD/JPY: 4-hour

NZD/JPY 4-hour Forex Chart
NZD/JPY 4-hour Forex Chart

Reversal alert! NZD/JPY seems to have formed a double top on its 4-hour time frame and is currently testing the neckline around 71.50. A break below this area could set off a drop that’s the same height as the chart pattern.

The 100 SMA looks ready to cross below the 200 SMA to confirm that sellers are about to take over and give the selloff some more momentum. Stochastic is also pointing down but is nearing the oversold region.