The Week Ahead in FX (Feb. 17 – 21)

Start your trading prep with an overview of catalysts lined up for the major currencies and the charts to watch this week.
FX Week Ahead

Major Currencies Overview

First up, here’s a rundown of how the major pairs performed in the past week:

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

USD

The Greenback chalked up a mixed run in the previous week as it held its ground only against its fellow lower-yielders. This time, the FOMC minutes are up for release and positive remarks might give the U.S. currency extra support. Read more.

CAD

The Canadian dollar was net positive in the past week as it chalked up losses only against the euro and pound.

CPI and retail sales are up for release this week, and these could provide strong clues on what the Bank of Canada might do next. Some improvements are expected, but will these be enough to spur hawkish expectations? Read more.

EUR & CHF

The euro found itself deep in the red against its forex rivals while the franc also caved to its higher-yielding rivals.

There are no major reports due from Switzerland this week while the euro is looking forward to the release of the ECB minutes and flash PMI readings. Read more.

GBP

Sterling redeemed itself from a dismal performance the other week as it climbed to the top spot last week. A number of top-tier reports are up for release this week, so these could determine whether or not the currency can hold on to its gains. Read more.

JPY

The yen gave up ground on risk-taking in the previous week but still managed to chalk up some pips versus the euro and franc.

  US Dollar Index (USDX) – what it is and how to use it on Forex | ForeX Technical Analysis & Analytics

Production-related reports and the trade balance are up for release this week, and strong figures could give the Japanese currency a chance to recover. Read more.

AUD

The Aussie was generally stronger in the previous week, thanks mostly to improving risk sentiment. Jobs figures are due this time, along with the minutes of the latest RBA meeting, so the spotlight could return to fundamentals. Read more.

NZD

The Kiwi was the second best-performing currency in the previous week as it took advantage of risk-on flows. Only New Zealand’s quarterly PPI is up for release this week, so the currency could still take cues from sentiment. Read more.

Charts to Watch:

AUD/CAD: 1-hour

AUD/CAD 1-hour Forex Chart
AUD/CAD 1-hour Forex Chart

Breakout alert! AUD/CAD has formed lower highs and higher lows to consolidate inside a symmetrical triangle on its 1-hour time frame. Price is at the peak of the formation, so a break in either direction might be due soon.

The 100 SMA is below the 200 SMA to hint that a downside move might be more likely, but stochastic is still heading north so the pair might follow suit. In any case, the breakout could last by the same height as the triangle, which spans .8875 to around .9000.

AUD/NZD: 4-hour

AUD/NZD 4-hour Forex Chart
AUD/NZD 4-hour Forex Chart

After breaking above its double bottom neckline to confirm that an uptrend is in the works, AUD/NZD appears to have completed the retest of this broken resistance level.

With that, the pair could resume the climb to the nearby resistance levels marked by the Fibonacci extension tool. The 50% level might be a strong take-profit point as it lines up with the swing high, but stronger bullish momentum could take price up to the full extension near 1.0600.

  Short-Term Bollinger Reversion Strategy 2.0 (Feb. 13 – 20)

The 100 SMA looks ready to cross above the 200 SMA to confirm upside pressure while stochastic has room to climb before indicating exhaustion among buyers.

USD/CHF: 4-hour

NZD/CHF 4-hour Forex Chart
NZD/CHF 4-hour Forex Chart

Who’s up for a reversal?

NZD/CHF looks tired from its slide as price formed a double bottom formation on its 4-hour chart. Price is gearing up for a break of the neckline around the .6315 area, and a move above this could send the pair higher by the same height as the reversal pattern.

Be careful, however, since stochastic is heading lower from the overbought zone to signal a return in selling pressure. At the same time, the 100 SMA is still safely below the 200 SMA to indicate that the downtrend is more likely to carry on than to reverse.

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