Investors are provided with market outlook insights to help plan out their long term goals. Read the latest commentaries from our industry experts.
Last week we identified the potential of buying Swiss Franc
from the commitment of trader reports as non-commercials increased their long
contracts significantly. We saw the Swiss Franc gain strength against many
other currencies this week in line with the reports. This week the CoT reports
show no real changes and we expect the Swiss Franc to continue to gain
President Trump continued to tweet over the weekend and
mentioned that a deal between the US and China may not happen. This was
featured in a tweet by the President quoting “I think that China felt they were
being beaten so badly in the recent negotiation that they may as well wait
around for the next election, 2020, to see if they could get lucky & have a
Democrat win – in which case they would continue to rip-off the USA for $500
Billion a year….”. Is this tweet a sign of a breakdown in trade negotiations?
In other news USD, retail sales are forecast to fall this
week from 1.6% to 0.2%. This could introduce fresh weakness to the USD market
this week as we expected.
The Canadian Dollar strengthened towards the end of the week with employment figures coming in stronger. This strength could continue if we see the Core CPI increase.
As we can see from the heat map above, CAD strengthened along with the CHF. JPY finished the week the weakest followed by GBP and USD.
The USD Index remains under the key resistance level and back within the consolidation zone. With the lower expected retail sales, we could see the USD fall back towards $96.00 and the supporting trendline this week. The heatmap suggests we could see the USD continue to weaken especially against the stronger currencies such as CAD and CHF.
AUDUSD bullish weekly close suggests we could see prices climb back towards the key 0.7200 resistance. If the USD continues to weaken and we see a risk on sentiment re-enter the market the AUDUSD could push from this demand zone. The risks for the AUDUSD, however, remain with the trade tension between the US and China. With the current negotiations looking stale the Aussie could see some weakness.
USDCHF printed a weekly bearish engulfing candle highlighting the CHF strength. We expect this market to continue to move lower with targets of 1.0000. We will be looking for key structure lows on lower timeframes in order to take advantage of the CHF strength.
USDCAD has broken through daily trendline support and looks
likely to head back towards the key 1.3300 demand zone. If the CPI data comes
out positive this week, we could see USDCAD trading below 1.3300.