Weekly Market Report: EURUSD, USDJPY, USDCAD, AUDUSD
Safe haven currencies suffer on improved risk appetite, USD rises.
EURUSD: Gaps lower this morning but positive technical bias still intact
There was little change over the past week for this pair’s price, oscillating near its 50-week moving average but failing to finish above it. In the process, its weekly bear trend line has been broken, and more of its weekly (and daily) indicators are turning green, with the daily overview showing a stalling bull trend technical overview. Preliminary Eurozone core CPI figures rose by 0.3% to a better than expected 1.1%, but that won’t necessarily translate into a hawkish ECB that so far is tilting towards more easing. PMI figures this week will be important in determining whether the bloc can shake off what has been (core CPI aside) relatively dismal data. As for bias, both retail and institutional sentiment remain majority short at an identical 58%, with both little changed from last Monday, and the latest CoT report showing a reduction in euro longs by 3.5K lots.
USDJPY: Safe haven flows suffer as risk appetite improves following US-China truce
Risk appetite from G20 increased, with indices futures gapping higher and safe haven products in retreat. In terms of data, last Friday’s core CPI for Tokyo rose at a smaller than expected rate of 0.9% with its unemployment rate unchanged at 2.4%, as demographic changes and an appreciating yen are likely to keep pricing pressures sedate, and the BoJ worrying over how to achieve its 2% inflation target. From a technical standpoint, the outlook on both the weekly and daily remains bearish, but with a lack of significant follow through and a non-trending ADX causing its trend to stall. Retail bias remains heavy long at 69% and little changed from last week, while institutional bias has been plummeting from what was 76% heavy long only a few weeks ago to a now more modest majority long 57% on a reduction in yen shorts by 3.5K lots and an increase in yen long positioning by nearly 3K lots.
USDCAD: US dollar strengthens this morning against commodity currencies despite trade war truce
Friday’s Bank of Canada survey was more optimistic, and with GDP figures beating estimates the Canadian dollar witnessed an intraday increase against the greenback which suffered from disappointing data. The contrast in data between the two will be crucial this Friday as both release their respective employment data, with any divergence likely to result in this pair’s movement being most volatile. From a technical standpoint the weekly outlook remains bearish and near its short-term support level crossing its 200-week MA last week, while from a daily standpoint its technical indicators are more bearish combined with a trending ADX. As for sentiment, retail bias has shifted from a slight majority short 52% last Monday to a majority long 62% as shorts took profit and longs average in, while institutional bias is identical at a majority long 62% having dropped from last week’s 75% long bias, thanks a reduction in CAD shorts by 18K lots and an increase in CAD longs by nearly 5K lots.
AUDUSD: Proxy currency suffers despite improved risk appetite as greenback strengthens
The Australian dollar gapped higher following improved risk appetite, but with the greenback strengthening the gap has been closed this morning, and with AIG’s manufacturing release showing a contraction. But this week’s Australian data’s effect on the aussie will pale into insignificance compared to tomorrow’s closely watched RBA announcement. Expectations are for a 0.25% rate cut, though with the trade mood improving and investor sentiment increasing, a risk-on atmosphere may cause a rethink amongst RBA members, and prefer to keep their monetary policy on hold instead. From a weekly technical standpoint (and it means little in the face of fundamental forces), its bear trend is stalling heavily at current levels and on the verge of being undone. The upward price moves have been a boon for retail traders, who have dropped their majority long bias by nearly 20% over the past week, while institutional bias has pushed further into bear
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
