Forex price performance was mixed and choppy this week, indicating that traders put a little bit more weight on individual currency stories, rather than just focusing on broad market themes and risk sentiment.
The Aussie, Loonie, and Greenback took the top spots this week, while the euro, Sterling and the Kiwi rounded out the bottom spots at the Friday close.
The momentum in these moves slowed down a bit by the Wednesday session, where we began to see assets and forex pairs kind of moving to their own beat at that point. Equities remained on its downtrend, likely on elevated interest rates, and debt ceiling fears in the U.S.
As far as the major currency pairs, again we saw mixed performance and atypical correlations. In what was arguably a negative risk environment most of the week with inflation fears, net negative economic updates, and geopolitical risks (e.g. Evergrande debt crisis, U.S. debt ceiling) in focus, we saw the Aussie and Loonie outperform alongside the U.S. dollar. It’s likely the Aussie found buyers on the idea of Australia reopening its borders in November, and the Loonie on oil’s strength early in the week.
On the other side of the spectrum, weakening eurozone data and the energy crisis is likely what had traders lightening their load on the euro and British pound. While the risk aversion environment was likely the reason we saw the Kiwi take last place, and possibly on reports of New Zealand seeing its highest number of covid cases yet.
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Every day, I will present to you my findings and daily commentaries on what recently happened in the economic arena, possible shifts in sentiment, economic events to watch out for, and their effects on currencies.