Major Currencies Overview
First up, here’s a rundown of how the major pairs performed in the past week:
Thanks to positive U.S. business and and employment data, the Greenback managed to stay in the top spot against its peers, even after risk-off flows paused.
U.S. retail sales data is up for release later in the week, and another strong showing could continue to spur gains for the dollar then. Read more.
The Loonie still managed to emerge a net winner for the past week, even though risk-off flows and weaker crude oil prices took their toll.
Apart from a testimony by BOC Governor Poloz, there are no other major economic events in Canada, which could leave its currency sensitive to sentiment once more. Read more.
EUR & CHF
A pickup in risk-taking on account of coronavirus vaccine developments dampened demand for these lower-yielding currencies for the most part of the week.
Only a handful of low-tier and mid-tier reports are lined up from the euro zone and Swiss economy this time, so risk sentiment might still be a big driving factor. Read more.
Sterling found itself at the very bottom of the forex pile as Brexit-related uncertainties kept traders wary of the British currency.
The U.K. quarterly GDP report is up for release this week, along with the monthly GDP reading and manufacturing production data. BOE Governor Carney also has a speech coming up. Read more.
The yen returned some of its earlier gains as risk appetite rebounded in the previous week on account of positive developments related to the coronavirus outbreak.
There are no major reports due from the Japanese economy this week, which could leave the lower-yielding currency sensitive to overall market sentiment once more. Read more.
The Aussie managed to pull up from its declines thanks to a somewhat upbeat RBA statement and improvements in risk sentiment related to the coronavirus outbreak.
Another speech by RBA Governor Lowe is coming up soon, and positive remarks could once again boost the Aussie, especially if risk appetite stays up. Read more.
The Kiwi had a mixed run as it managed to benefit from risk-on flows but still caved to downbeat dairy prices in New Zealand.
Traders are likely pricing in the odds of a dovish statement from the RBNZ this week, although the central bank could highlight the pickup in wages and inflation. Read more.
Charts to Watch:
Looks like a successful break-and-retest on this one! AUD/JPY found resistance at the former support level around 74.25 and is resuming its slide to the next downside targets.
The 38.2% Fibonacci extension level appears to be holding as support at the moment, but stochastic has room to move lower before reflecting exhaustion among sellers. Bearish pressure could still take the pair down to the next support areas, possibly around the 50% Fib that lines up with the swing low or even the full extension at 70.55.
After breaking below its long-term rising trend line, this pair pulled up for a quick retest and is now ready to gain traction on its downtrend. EUR/JPY is now down to the 38.2% Fibonacci extension, and moving averages suggest that further losses are in the works.
The 100 SMA crossed below the 200 SMA to confirm that bearish momentum is in play, and the former is also holding as dynamic resistance. However, stochastic is already indicating oversold conditions, and turning higher could allow buyers to return.
Not a fan of Fibs? How about breakouts then? This pair seems to have broken past the neckline of its double bottom pattern, signaling that a reversal from the downtrend is underway.
The chart pattern spans .9630 to around .9750, so the resulting climb could be at least 120 pips in height. The 100 SMA looks ready to make a bullish crossover to confirm that buyers are taking over, but stochastic is already indicating overbought conditions.