Weekly Market Report: EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD
Institutional bias remains heavy long US dollar against most of the FX majors save the Canadian dollar.
EURUSD: Finishing the week lower against the greenback ahead of this week’s ECB
The US dollar weakened against most of the FX majors last week, but not the euro nor pound, with each registering losses against the greenback on their respective weekly charts. In the case of this pair's price, it has moved back below the last of its main short-term weekly moving averages, and resting below all its main moving averages in the process. Its remaining technical indicators are still neutral however, and intraweek movement has been relatively limiting. That's set to change this week with the ECB meeting on Thursday whereby it's set to keep interest rates on hold at 0%, and address what has been relatively weak eurozone data and rising trade and geopolitical risks. Heading into that event, institutional bias remains majority short but edging closer to the middle on an increase in longs by 12K lots outdoing a smaller increase in euro shorts by 7.6K lots.
GBPUSD: Briefly breaking past its mid-term support level with retail and institutional traders holding opposite bias
Long traders held their breath last week following the brief Wednesday squeeze lower that tested long positions and kept the daily technical overview of a stalling bear trend intact. On the weekly however, while there’s clear negative technical bias, the retracement and slow movement lower has been more consolidatory and with its mid-term support holding for the time being. Retail bias is still heavy long at 77%, but it’s dropped from the extreme long levels of 81% posted at the start of last week. Institutional traders on the other hand, are a near opposite heavy short 76% and raising that bias a notch on a reduction in pound long positions by -1K lots and a simultaneous increase in pound shorts by 2.3K lots.
USDJPY: Yen finishes higher against the greenback but only just
The moves for this pair remained range-bound for the week and in line with its current consolidatory technical overview that continues to show heavy negative technical bias and a slight bear trend channel forming. However, given the safe haven status both enjoy (albeit with different underlying characteristics) it has been difficult getting one to veer significantly far off from the other unless the catalyst is intended USD weakness. Institutional bias was close to shifting to majority long against the yen last week, but a combination of a reduction in yen longs by 2.4K lots and an increase in yen shorts by 5.3K lots has pushed majority long bias against the yen (i.e. majority short yen) 5% higher to a majority long 57%. Retail bias on the other hand, has risen a notch to a heavy long 69%, with retail shorts having taken profit on the drop, and longs awaiting retracement.
USDCAD: Initializing bear trend tested near its mid-term support level
Last week’s technical overview shift to an initializing bear trend was met with immediate resistance, though didn’t finish that much higher and remained below last week’s 1st Resistance level. And although the greenback was in relative retreat, energy prices plummeted significantly and hurt CAD’s energy underlying. We’ve mentioned previously that either a drop in the US dollar and/or rise in energy prices would keep the pair’s bear trend in play, and that remains the case this week with attention on Friday’s preliminary Q2 US data, and API/EIA’s release days prior. In terms of sentiment, retail bias remains unchanged at a majority long 58%, while institutional bias has risen 5% to a majority short 60% on a far larger increase in CAD longs by 14.4K lots outdoing a smaller increase in CAD shorts of only 2.6K lots.
AUDUSD: Greenback weakness and hard commodity strength keep AUD at the highs and testing institutional traders
While energy commodities have been lagging and denting energy commodity currencies like the Canadian dollar, hard commodities finished the week higher against the greenback, and aiding the Australian dollar’s underlying in the process. On the daily chart it has managed to breach past its short-term resistance level and ensure more bullish technical bias. But on the weekly chart to the left, it’s at the upper end of its bear trend channel, and still below all its main long-term moving averages. Slightly more is needed at this stage to shake off the last of its bearish long-term technical bias, especially on the daily overview’s tilt towards a potential initializing bull trend. And while that would be of less benefit to retail traders who are on the verge of shifting to majority short, institutional bias is little changed and remain heavy short both AUD and NZD.
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