The market saw an intense, but largely expected line of news last week as four central banks delivered their latest rate decisions. The FED delivered the priced-in 25 bps rate cut, signaling likely two cuts more in 2025, with the Bank of Canada following a similar rhetoric.
Meanwhile, the Bank of England and the Bank of Japan held their interest rates, although their policies seem to be diverging. The former is grappling with re-accelerating inflation, while the latter shows a hawkish tone, with markets anticipating the next hike sometime in the near future.
As the market had priced in most of these decisions, the volatility was relatively under control. The yen rallied against most currencies, while the Australian dollar and the New Zealand dollar fell.
Next week will bring the latest PMI news for the US, Australian inflation data, and the Swiss central bank will provide more clarity on its current interest rate. At 0%, the Swiss currently have the lowest interest rate out of all the developed nations, with a possibility to even go into negative territory, if necessary.
Key News
Tuesday: EUR - German PMI, GBP - PMI, USD - PMI, Powell speech
Wednesday: AUD - CPI
Thursday: CHF - Interest Rate, USD - GDP, Unemployment
Friday: CAD - GDP, USD - Core PCE
Pairs In Focus
1. CAD JPY
This pair has once again rejected from 106, which has become the strong support. Then, it broke the key area around 107.150, signaling strength and rejected the subsequent pullback.
CAD JPY daily chart, Source: TradingView
Although another pullback might not occur, any subsequent retest and rejection above the Friday close would be a sign of strong buying. The potential move is to 108.080, about 65 pips higher.
2. AUD SGD
This pair found strong resistance at 0.85460, after almost a month of bullish momentum. Since then, it has closed below a key level of 0.84900.
AUD SGD daily chart, Source: TradingView
Persistent pullback could bring it lower to support around 0.84.
Notes
- AUD NZD: Broke through resistance at 1.11800, climbing to a fresh high. The outlook remains bullish.
- AUD CAD: Ran into strong resistance at 0.92200 and turned around. The key support to watch is at 0.90300.
- AUD CHF: Remains in the multi-month channel. Short-term support is at 0.52260.
- AUD JPY: Made a new multi-month high, before pulling back. Key support is the previous resistance at 96.900.
- CHF JPY: Made a fresh all-time high. The pullback could test support at 185.035.
- EUR AUD: rallied to a key level of 1.78250, rejecting on Friday. However, the potential for sustained AUD weakness still lingers.
- EUR JPY: At the fresh all-time highs, but a sharp pullback could test the support area around 172..
- EUR NZD: Rallied sharply to yet another all-time high above 2.004 on interest rate news.
- GBP AUD: Made a new lower low, signaling persistent bearish momentum. Key resistance to watch is 2.056.
- GBP JPY: Made a fresh close above 200.550 before pulling back sharply on Friday. The key support levels to watch are 199.715 and 198.200.
- GBP NZD: Rallied on central bank news before printing an inside bar on Friday. The price could sweep both sides of that daily candle early in the week.
- NZD JPY: Failed to move above strong resistance at 88.170. Further bearish momentum is possible.
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.
