Start your trading prep with an overview of catalysts coming up.
I’ve got some chart setups to keep tabs on, too!
Take a look at how the majors performed recently and the upcoming catalysts to watch out for:
Major FX Pairs Overview
USD
The Greenback managed to end the previous week as a net winner, despite choppy days on weak data releases and shifting Fed commentary.
President-elect Biden’s inauguration is coming up, along with the confirmation hearings of former Fed head Yellen as Treasury Secretary, so there could be a lot of focus on politics again. Read more.
CAD
The Loonie had one of its mixed weekly runs as it was pushed around by oil-related news and counter currency flows.
The BOC will be making its monetary policy statement early this week, and rumor has it that a cut might be announced. Read more.
EUR & CHF
The euro was down in the dumps as the odds of more lockdown measures rose while bond yields and Italian political uncertainty also dominated the headlines.
The ECB decision is coming up next, but traders are likely to stay focused on bond yields and overall market sentiment since no policy changes are eyed. Read more.
GBP
Even with talk of negative interest rates and downbeat data, the pound was able to hold its ground and stay in the green by the end of the week.
There are no major economic releases from the U.K. in the next few days, but mid-tier reports and the flash PMI readings might be worth keeping tabs on. Read more.
JPY
The yen outperformed most of its peers, with the exception of sterling, thanks to risk aversion stemming from rising COVID-19 cases and reinforced lockdown measures.
The BOJ is scheduled to announce their policy decision mid-week, but no actual changes to interest rates or bond purchases are expected. Read more.
AUD
The Aussie slid back to negative territory when risk-off flows returned on account of rising COVID-19 cases and the possibility of another wave of lockdowns.
Australia’s jobs figures are on this week’s schedule, along with top-tier data from its main trade partner China. Read more.
NZD
The Kiwi found itself at the very bottom of the forex pile last week due to strong risk-off vibes stemming from more pandemic concerns and the RBNZ hack.
There are no major catalysts on New Zealand’s schedule this time, so the Kiwi would likely keep taking cues from overall market sentiment. Read more.
Forex Charts to Watch:
NZD/USD: 1-hour
Reversal alert!
NZD/USD just broke below the neckline of its head and shoulders chart pattern and might be in for a drop that’s at least the same height as the formation.
The pair has already fallen quite a bit, but the chart pattern spans roughly 150 pips so it could still have plenty of downside left. The bearish moving averages crossover confirms this!
Just be careful when shorting at market, though, since Stochastic is pulling up from the oversold region to suggest that buyers are returning. In that case, a pullback to the broken neckline support might be in play.
USD/CHF: 4-hour
Here’s another potential reversal play for y’all!
USD/CHF formed an inverted head and shoulders pattern on its 4-hour time frame and is just about to test the neckline.
A break above this resistance area near the .8925 mark could set of a climb that’s at least the same size as the chart formation which spans roughly 250 pips.
The 100 SMA is below the 200 SMA for now, but the gap between the indicators has narrowed enough to hint that a bullish crossover is looming. Stochastic is climbing to reflect the presence of bullish momentum, but the oscillator is approaching overbought conditions to suggest exhaustion.
CAD/JPY: 4-hour
Not in the mood for a reversal? Here’s a consolidation setup instead!
CAD/JPY formed higher lows and slightly higher highs to trade inside a rising wedge pattern on its 4-hour time frame.
Price looks due for a test of support soon, and the dynamic support at the moving averages could add to its strength as a floor around the 81.15 area. Stochastic is inching close to the oversold region to reflect exhaustion among sellers and a likely return in bullish pressure.
