Start your trading prep with an overview of catalysts lined up next. I’ve got chart setups to check out this week, too!
Last week was mostly about the crude oil crash and the turnaround that followed. ICYMI, here’s the lowdown on negative oil prices.
Take a look at how the majors performed recently and the upcoming catalysts to watch out for:
Major FX Pairs Overview
The Greenback had quite the roller coaster ride as risk appetite turned this way and that, mostly on account of the crude oil plunge and recovery.
This week, the FOMC decision takes center stage as market watchers are keen to find out if the central bank has more stimulus moves up its sleeve. Earnings reports could also steal the show. Read more.
The oil-related Loonie was beaten up for the most part of the week as Black Crack fell to negative territory early on. The currency was able to claw back some of its gains but not enough to close in the green.
Canada’s monthly GDP release might spur some volatility for Loonie pairs, but it’s likely that traders would keep closer tabs on oil and overall sentiment. Read more.
EUR & CHF
The euro and franc were off to a running start thanks to strong risk-off flows, but both lower-yielding currencies coughed up their gains later on.
Sterling found itself at the bottom of the forex pile last week as data turned out disappointing and there were rumors of a U.K. lockdown extension.
Only low to mid-tier reports are on this week’s docket, likely keeping traders on the lookout for more updates related to the COVID-19 situation in the U.K. Read more.
The yen was able to bank on risk-off flows stemming from the drop in crude oil and resulting stock market selloff, and it was able to maintain its lead for the most part.
The BOJ is scheduled to announce its monetary policy decision, but no actual changes are expected for now. Better stay on your toes in case risk sentiment tosses and turns again! Read more.
Even though the Aussie had a rough start, it managed to shake its losses off and finish strong as strong data from the Land Down Under also buoyed it higher.
Australia has its CPI readings lined up next, and the higher-yielding currency would likely take some cues from Chinese PMI readings as well. Read more.
The Kiwi had a mixed run as safe-haven flows weighed it down early in the week before a slight recovery ensued. Still, the commodity currency was able to close net positive.
There are no major reports lined up from New Zealand this week, but talks of the lockdown being lifted are keeping traders somewhat bullish on the currency. Read more.
Forex Charts to Watch:
Bounce or break?GBP/NZD has formed lower highs and found support around the 2.0500 major psychological mark, creating a descending triangle on its 1-hour time frame.
The pair is hovering close to support and might be mulling a break lower, possibly sending price down by the same height as the chart formation. The triangle spans roughly 400 pips from 2.0500 to 2.0900.
In particular, the channel top coincides with the 61.8% Fibonacci retracement level and a former support area that could hold as a ceiling. To top it off, it also lines up with the 100 SMA dynamic resistance, which is below the 200 SMA to confirm that the selloff is likely to resume.
EUR/CAD is pacing back and forth inside a range with support at 1.5130 and resistance around 1.5415. Price recently bounced off support and is testing the area of interest at the middle.A bounce from this potential support-turned-resistance zone could send the pair back to the bottom of the range.
On the other hand, a break above it could clear the path for a test of resistance.
Stochastic is indicating overbought conditions or exhaustion among buyers, so turning lower could allow sellers to take over.