Start your trading prep with a review of last week’s price action and an overview of catalysts coming up.
Take a look at how the majors performed recently and the upcoming catalysts to watch out for:
Major FX Pairs Overview
Traders showed no love for the U.S. dollar last week as mostly positive updates on the global economy and pandemic weighed on safe-haven demand.
U.S. CPI and retail sales figures are up for release this week and might provide more insights on how the consumer sector is faring. Read more.
Even with some risk rallies, the Loonie found itself at the bottom of the forex pile on account of weaker crude oil prices and a downbeat outlook for the Canadian economy.
The BOC will be making its monetary policy decision this week, and another round of pessimistic remarks might mean more downside for the Canadian currency. Read more.
EUR & CHF
In the absence of major reports from the eurozone and Swiss economy, the shared currency and the franc chalked up a mixed performance driven by counter currency flows.
The ECB decision could shake things up for the euro this week while the Swiss currency could take cues from SNB head Jordan’s speech. Read more.
Sterling snagged the top spot in the previous week as it got a boost from another stimulus announcement and easing Brexit concerns.
The focus returns to economic data from the U.K. this time as the monthly GDP, CPI, and jobs figures are up for release. Read more.
Risk-taking was in play for the most part of the week, yet the lower-yielding yen managed to race close to the top later on when sentiment shifted.
The BOJ decision is on this week’s docket, and talks of easing could force the Japanese currency to return some of its recent winnings. Read more.
The Aussie had one of its choppier weeks as it was pushed around by economic releases and changes in market sentiment.
Apart from employment data from the Land Down Under, economic figures from its top trading buddy China could also be worth watching this time. Read more.
The higher-yielding Kiwi also had a choppy run last week as it tossed and turned to market sentiment changes.
Quarterly CPI from New Zealand and China’s data dump might be the main price factors to keep tabs on this time around, as well as any major changes in risk appetite. Read more.
Forex Charts to Watch:
EUR/JPY fell through its ascending trend line support visible on the 1-hour time frame to signal that a downtrend might follow. Price has yet to retest the broken support to gather more bearish energy.Applying the Fib retracement tool shows that the 61.8% level lines up with the area of interest, which also happens to line up with the 100 SMA dynamic inflection point.
Although this faster-moving MA is above the 200 SMA for now, a bearish crossover seems imminent. At the same time, Stochastic is indicating exhaustion among buyers and a likely return in selling pressure soon.
Looking to go with the flow? This trend setup on EUR/USD might work out for ya!
Price is still cruising inside its ascending channel on the 1-hour time frame after finding some buyers at the bottom. From here, the pair might aim for the top of the channel at 1.1400 or at least until the mid-channel area of interest.
Stochastic, however, is turning lower so price could follow suit as sellers take over. Still, the 100 SMA is above the 200 SMA to hint that support is more likely to hold than to break.
Not a fan of trends? This consolidation play might be more to your liking!
EUR/CHF has formed lower highs and slightly lower lows to create a falling wedge on its 1-hour chart. Price is currently testing the top and might be due for a bounce back to support next.Technical indicators confirm that the wedge resistance is likely to keep gains in check. Stochastic is already turning lower while the 100 SMA is treading below the 200 SMA to reflect bearish momentum.
Just be on the lookout for a candle closing above the 1.0640 wedge resistance as this could be followed by a rally of the same height as the formation!