The Forex Week In Review

Another week comes to a close in Forex markets, and it been a much quieter week than last with the majority of pairs finishing within last week’s range as we head into next week’s Fed meeting.  Improved USD sentiment has left markets trading on individual domestic outlooks as safe haven flows subside. Economic data releases have dictated the weekly action with little directional resolution.

  • USD has had a better week boosted by some better data releases, mainly the better than expected CPI print then better weekly jobless numbers. Data outperformed the G10 figures we have seen recently owing to USD strength, though softer today on reports that Ebola has reached New York.
  • GBP has weakened over the week with softer economic data highlighting growth and recovery concerns, not helped by a dovish BoE minutes release. Public Sector Net Borrowing increased, retail sales missed and GDP came in lower than previous – as expected.
  • JPY has weakened significantly over the week as risk off flows saw outflows from the currency which is also weighed on by expectations of further BoJ stimulus.
  • EUR has traded lower over the week suffering from talk of ECB bond purchasing and better US data. The weekend release of the bank stress tests and various media reports on the deterioration in the relationship between the Bundesbank’s Weidmann and ECB President Draghi present downside risks into next week.
  • AUD started the week well on improved risk sentiment, fell midweek against better US data but has put in a strong day today against the softer USD. RBA minutes showed no suprises, CPI came slightly better than expected and China data has supported this week also.
  • CAD saw an unexpected upturn this week with the BoC releasing a less dovish than expected policy statement on the back of last weeks neutral CPI print.

Key Trades

  • USDCAD: Short Term Bullish – No Change   – Still holding long positions against the bullish trendline, Order Flow Indicators have crossed down however and will exit on close below Wednesday’s low.
  • EURUSD: Bearish – No ChangeStill holding short positions from H1 trendline break, have moved stop to entry now.
  • GBPUSD: Bearish – No ChangeStill holding short positions with price around entry now on softer USD. Stops above weekly highs.
  • USDJPY: Bullish – No Change – Still holding long positions which were added to on break of Monday’s high
  • AUDUSD: Bearish – No ChangeStill holding short positions anticipating downward resolution of contracting triangle formation. See AUSDUSD analysis piece for thoughts.

Make Sure you tune in on Sunday evening for our Weekly Forex Outlook & COT analysis, and finally, remember that the UK clocks go back this Sunday as summertime comes to an end.

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