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
USD
The Greenback took a nosedive last week as the U.S. elections took centerstage, resulting in a pickup in risk appetite and a dip in safe-haven demand.
U.S. CPI and PPI figures are up for release next, along with a speech by Fed head Powell, so watch out for additional volatility then! Read more.
CAD
Stronger risk-taking lifted the Loonie for the most part of the week, but the Canadian currency gave up some gains on account of downbeat data.
There are no major reports due from the Canadian economy this week, so the Loonie might have to take cues from sentiment and crude oil prices. Read more.
EUR & CHF
The euro was able to squeeze out some gains thanks to upbeat figures while the Swiss franc ended up in the red as risk appetite surged later on.
A handful of closely watched releases like ZEW economic sentiment data and industrial production figures are lined up from the region this time. Read more.
GBP
Sterling was bogged down by mostly downbeat reports and stricter lockdown measures, along with the usual set of Brexit-related uncertainties.
There are a couple of speeches by BOE head honcho Bailey during the week that might provide some volatility for pound pairs. Read more.
JPY
There were no major catalysts from the Japanese economy last week, leaving the yen sensitive to markets sentiment and dollar action.
Only a few low-tier reports are on deck this time, so the yen might keep taking directional cues from risk appetite. Read more.
AUD
The RBA cut interest rates as expected, yet the Aussie was still able to score a solid run in the previous week thanks to a surge in global risk-taking.
The lack of major reports this time could keep the Aussie banking on demand for higher-yielding currencies if risk appetite extends its stay. Read more.
NZD
No data? No problem! The Kiwi was able to score a positive run for the week as it was buoyed by strong risk appetite.
This time, the focus will shift to fundamentals and monetary policy as the RBNZ gears up to make its interest rate decision. Read more.
Forex Charts to Watch:
CAD/JPY: 4-hour
Check out this neat trend setup on CAD/JPY!
The pair made lower highs and lower lows, creating a descending channel visible on its 4-hour time frame. Price looks ready to test the top of the channel but also seems to be hitting a ceiling at the 61.8% Fib.
If the nearby resistance levels are able to keep gains in check, CAD/JPY could slide back to the swing low at 77.90 or the channel bottom closer to the 77.50 minor psychological mark.
A bearish moving average crossover can be seen, confirming that the selloff is likely to carry on, but Stochastic is turning higher to suggest that buyers might regain control.
AUD/JPY: 4-hour
Here’s another retracement play on a yen pair! This time, I’m looking at the potential downside targets for AUD/JPY.
Price is already testing the top of the channel and might be looking to retreat to nearby support areas. The Fibonacci extension tool shows other potential downside targets, with the 50% level lining up with the mid-channel area of interest around 73.75.
Stronger selling pressure could drag AUD/JPY down to the 61.8% extension that coincides with the swing low or the full extension near the channel bottom at 72.00.
Note that the 100 SMA is safely below the 200 SMA to confirm that resistance is more likely to hold than to break while Stochastic is pointing down, so price could follow suit.
EUR/GBP: 4-hour
Not a fan of the yen? You might wanna play this trend on EUR/GBP instead!
The pair is also cruising lower inside a falling channel on its 4-hour chart but is still hanging out around the middle.
Technical indicators suggest that the downtrend could continue as the 100 SMA is below the 200 SMA dynamic resistance, which is close to the channel top.
Stochastic is also heading lower to confirm that bearish momentum is in play, possibly taking EUR/GBP back to the channel support or even below it!
