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Start your trading prep with a review of last week’s price action and an overview of catalysts coming up.

FX Week Ahead

Take a look at how the majors performed recently and the upcoming catalysts to watch out for:

Major FX Pairs Overview

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

USD

After seeing stronger than expected NFP numbers in the previous week, price action for the Greenback could be calmer this time around as only a handful of mid-tier reports are due.

This includes the ISM non-manufacturing PMI, PPI readings, and initial jobless claims figures that might spur a bit of intraweek volatility, along with changes in risk sentiment. Read more.

CAD

The Loonie could be in for an exciting trading week as the June job figures from Canada are up for release.

Another large pickup in employment is eyed, which might be enough to assure traders that the economy is starting to recover from the pandemic. Read more.

EUR & CHF

There’s not much on the economic docket of the eurozone and Swiss economy this week, which could leave traders sensitive to overall market sentiment.

The Eurogroup meeting and EU leaders’ commentary on the Recovery Fund might still be worth keeping tabs on as they gear up for another big meeting next week. Read more.

GBP

The coast is clear in terms of economic reports from the U.K. this time, which could lead pound traders to put extra attention on Brexit negotiations.

So far, the talks have reached a deadlock on a few key issues but leaders are optimistic that a deal could be reached by the end of the year. Read more.

JPY

Risk-taking weighed on the lower-yielding Japanese yen in the previous week, and the same themes could stay in play in the days ahead.

There are a few low-tier reports that could be worth watching, including the core machinery orders, preliminary machine tool orders, and household spending data. Read more.

AUD

The Aussie banked mostly on risk appetite in the previous week, but the focus could shift back to fundamentals as the RBA makes its policy decision next.

No actual interest rates are expected, but market watchers are likely to keep their eyes and ears peeled for changes in rhetoric that could contain clues for future decisions. Read more.

NZD

The higher-yielding Kiwi was also able to take advantage of risk rallies earlier on and could continue to benefit from positive market sentiment.

Since there are no major catalysts from New Zealand, the Kiwi might also take some cues from the price movements of its buddy, the Australian dollar. Read more.

Forex Charts to Watch:

EUR/JPY: 1-hour

EUR/JPY 1-hour Forex Chart
EUR/JPY 1-hour Forex Chart

This pair formed higher lows and slightly higher highs to consolidate inside a rising wedge pattern on its short-term chart.

Price just bounced off support and is setting its sights on the top of the wedge, and technical indicators confirm that more gains are likely. The 100 SMA is above the 200 SMA to indicate that bullish momentum is in play while Stochastic is heading higher.

However, the oscillator is already testing the overbought zone to signal exhaustion among buyers, and turning lower could mean a return in selling pressure.

EUR/GBP: 4-hour

EUR/GBP 4-hour Forex Chart
EUR/GBP 4-hour Forex Chart

Looking to go with the flow? This trend setup on EUR/GBP might work out for ya!

Price is currently testing the rising trend line connecting the lows since early May, and this support area lines up with the 50% Fib retracement level and a former resistance zone.

Stochastic is turning higher to suggest that bullish momentum is returning and could be enough to bring the pair back up to the swing high. At the same time, the 100 SMA is above the 200 SMA to confirm that the uptrend is more likely to resume than to reverse.

CHF/JPY: 1-hour

CHF/JPY 4-hour Forex Chart
CHF/JPY 1-hour Forex Chart

Here’s another trend setup for y’all!

CHF/JPY has formed higher lows and higher highs connected by a rising channel on its 1-hour time frame. Price is testing the bottom of the channel and could be headed for the nearby resistance levels next.

The 100 SMA is safely above the 200 SMA to suggest that the path of least resistance is to the upside, but Stochastic is closing in on the overbought zone to reflect exhaustion among buyers.

Another dip to the channel bottom might be needed to draw more bullish energy before the pair recovers to the mid-channel area of interest around 114.50 or the channel top.