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
The Greenback wound up as a net loser for the week on fading hopes for another batch of stimulus funds before the year ends.
Volatility was light for Loonie pairs in the previous week, with counter currency flows resulting in a mixed performance.
EUR & CHF
The euro had a negative showing despite a stimulus boost from the ECB while the franc managed to take advantage of risk-off flows from Brexit concerns.
It will be the SNB’s turn to announce any policy changes this week while the shared currency will have to contend with flash PMI readings. Read more.
Sterling found itself deep in the red last week as hopes for a Brexit deal were once again shattered.
The BOE will be making its policy statement soon, and the U.K. has a bunch of mid-tier reports due. However, it looks like the spotlight could stay on Brexit talks as negotiations have been extended and the odds are still looking slim. Read more.
Even with risk-off flows present, the yen traded mostly sideways as volatility ran low in the previous week.
The Aussie gradually climbed its way to the top spot as risk sentiment improved towards the end of the previous week.
Australia’s jobs report is coming up, and traders are counting on a slight pickup in hiring for November. Read more.
The Kiwi also took advantage of stronger demand for risk, along with weakness among most of its counter currencies.
There are no major reports due from New Zealand this week, which means that the higher-yielding commodity currency could once again take cues from sentiment. Read more.
Forex Charts to Watch:
First up is this break-and-retest setup on the short-term chart of EUR/USD.The pair broke out of its descending channel to signal that a reversal is in order, and it looks like the retest has been completed.
Price gapped up to the nearest upside target at the 38.2% Fibonacci extension level but might still be setting its sights higher to the 50% Fib that lines up with the swing high. The full extension is all the way up to the 1.2200 major psychological mark.
Technical indicators are looking mixed, as Stochastic is turning higher while the moving averages look prime for a bearish crossover.
Not a fan of reversals? Here’s a potential trend play if you’d rather go with the flow!CAD/JPY has formed higher lows connected by a rising trend line over the past weeks. Price is dipping to this support area and might be due for another bounce from here.
This is close to the 100 SMA dynamic inflection point that adds to its strength as support. The faster-moving moving average is also above the 200 SMA to confirm that the climb is more likely to pick up than to reverse.
Stochastic is pulling up after dipping to the oversold region to signal that buyers are taking over while sellers take a break.
Here’s one for the swing traders out there!AUD/JPY is forming an inverted head and shoulders pattern on its daily chart to signal that a long-term reversal is in the works.
Price is starting to climb past the neckline resistance to confirm that an uptrend is about to follow, but Stochastic is suggesting that buyers are feeling exhausted.
Moving averages are giving off bullish vibes, though, as the 100 SMA is above the 200 SMA. If the climb carries on, the pair could be in for a rally that’s at least the same height as the chart pattern!