Although not on the official FX calendar, Monday marks the inauguration of US President-elect Donald Trump. His first days could bring significant volatility owing to his tariff threats, particularly for the CAD and EUR.
Fundamental News
Tuesday: CAD CPI, NZD CPI
Thursday: CAD Retail Sales & Unemployment
Friday: BOJ Interest Rate, EUR PMI, USD PMI
Special note on JPY: Most JPY pairs have pulled back in anticipation of this week's interest rate news. Outside of a Trump-driven action, Bank of Japan is expected to raise rates to 0.5%, to alleviate importing issues coming from weak Yen. Still, Japan's central bank is unlikely to provide guidance on further actions, thus a hike would cause moderate strengthening, while any other action would probably cause a further, volatile weakening.
Pairs In Focus
AUD NZD
After days of ranging, AUD NZD has closed above the key level of 1.10862. If the following week finds a new trading range higher, traders could look for any inefficiencies below, close to the previous resistance, as a buying opportunity.
AUD CAD
This pair found its footing after sweeping the stops from last July. After a strong bounce, the price is now in the range. For further buys, it has to close above 0.89844, with a potential recapture of 0.90730.
Retail Sentiment: AUD NZD and AUD CAD have high short retail sentiment. The former is 84% short, while the latter is about 68%. Thus, if AUD NZD rises further than anticipated, any price dip buying has the potential to create a retail short squeeze.
- AUD JPY: Sits around fair value at 96.88.
- AUD SGD: Entered a range after a downtrend. No further action is needed until the market structure breaks.
- CAD JPY: Retraced its move higher. The nearest strong support is around 107.
- CHF JPY: Bounced from the strong support at 107.500; further Yen strength could break that level.
- EUR AUD: Entered a range, although the short-term bias is to the downside.
- EUR JPY: Bounced from support at 159.800. Fundamental news could move this either way.
- GBP JPY: Continued lower as anticipated, but the price will likely range until fundamentals resolve.
- NZD JPY: Remains in a downtrend but bounced from last month's support at 86.700.
- SGD JPY: It is in a range, but the short-term price action is bearish. Resistance is around 115.4, while the key level below remains at 112.300.
Note: Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. Singapore Forex Club is not responsible for any financial decisions based on this article's contents. Readers may use this data for information and educational purposes only.
