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Start your trading prep with a review of last week’s price action and an overview of catalysts coming up.

FX Week Ahead

Take a look at how the majors performed recently and the upcoming catalysts to watch out for:

Major FX Pairs Overview

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

USD

The Greenback chalked up another losing week as hopes for a fresh round of stimulus boosted risk-taking.

The main events for the U.S. dollar this week are the CPI and retail sales releases, which might provide insight on what the central bank will do next. Read more.

CAD

The Loonie had one of its better runs as it managed to take advantage of risk appetite and higher crude oil prices.

There are no major reports lined up from the Canadian economy next, which means that the currency could keep taking cues from sentiment. Read more.

EUR & CHF

These European currencies were off to a strong start thanks to upbeat data but wound up returning most of their gains when sentiment shifted.

Only low-tier reports are due from the region this time, but the upcoming EU Summit could shake things up for the shared currency and market risk appetite. Read more.

GBP

It was a choppy week for the pound since there were no major Brexit updates and traders are holding out for bigger developments.

This week should be an interesting one with the EU Summit lined up and leaders expected to make decisions on key issues. Read more.

JPY

The yen was stuck in the red as the week was filled with another set of risk-on flows while traders had high hopes for more stimulus packages.

Some manufacturing-related reports are due from Japan, but it’s likely that the lower-yielding currency could keep taking directions from sentiment. Read more.

AUD

A dovish RBA announcement dampened the Aussie’s spirits early in the week, but bulls were able to make a comeback when sentiment improved later on.

Australia’s jobs report is due this week, and the data dump from its top trade partner China could also bring in additional volatility. Read more.

NZD

The Kiwi struggled to benefit from risk-on flows as it reeled from rate cut speculations from the RBNZ.

New Zealand’s quarterly CPI is up for release, along with a bunch of top-tier data from China, but the Kiwi is likely to be more sensitive to New Zealand’s general election results. Read more.

Forex Charts to Watch:

EUR/USD: 1-hour

EUR/USD 1-hour Forex Chart
EUR/USD 1-hour Forex Chart

Here’s a simple trend setup for those who like to go with the flow.

EUR/USD has formed higher lows and higher highs to create an ascending channel on its 1-hour time frame. Price is testing the resistance, and technical indicators suggest that a pullback to support might follow.

Stochastic is already on its way down from the overbought zone to indicate that sellers are taking over while buyers are exhausted. Applying the Fib retracement tool shows where more bulls might be waiting, with the 61.8% level lining up with the channel support at the 1.1770 mark.

The 100 SMA is above the 200 SMA to confirm that support levels are more likely to hold than to break. If they do, the pair could recover to the swing high or the channel top next!

GBP/USD: 1-hour

GBP/USD 1-hour Forex Chart
GBP/USD 1-hour Forex Chart

Reversal alert!

Cable looks done with its decline as price is forming a complex double bottom on the 1-hour time frame. The neckline already seems to be broken, confirming that a climb of the same height as the chart pattern is in the works.

The 100 SMA is above the 200 SMA to indicate that the climb is likely to gain traction from here and that the moving averages could hold as dynamic support levels.

Just be careful when jumping in a long position, though, since Stochastic is heading south. Price might follow suit while bearish pressure is present, possibly leading to a quick pullback before the uptrend picks up.

GBP/AUD: 1-hour

GBP/AUD 4-hour Forex Chart
GBP/AUD 4-hour Forex Chart

If you’re hoping to catch a breakout, then this setup might be worth keeping close tabs on!

GBP/AUD has formed higher lows and lower highs to consolidate inside a symmetrical triangle on its 1-hour chart. Price is bouncing off support and might be due for a test of resistance close by.

The moving averages suggest that resistance is more likely to break than to hold, though, so a rally of the same height as the triangle could follow. Then again, Stochastic is closing in on the overbought zone to hint at exhaustion among buyers.

If sellers take over, a break below support could trigger a sell-off that’s the same size as the triangle!