Is that a reversal pattern confirmation I’m seeing on CAD/CHF?
Here’s what I’m watching ahead of Canada’s retail sales release.
Before moving on, ICYMI, yesterday’s watchlist checked out a head and shoulders pattern on AUD/CAD. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Fed official Bullard: Fed’s reaction to pandemic wasn’t bad policy
ECB official Lagarde reiterates need to be attentive to recession risk
Lagarde says ECB intends to raise interest rates in July meeting
Goldman Sachs revised risk of recession from 15% to 30% in the next year
Nomura forecasts extended U.S. recession starting this year
New Zealand Westpac consumer sentiment index down from 92.1 to 78.7
Japanese PM: Rapid yen weakening is a source of concern
Japan’s finance minister also expressed concerns about sharp JPY selloff
Hong Kong Monetary Authority intervened in FX market to defend peg
RBA Gov. Lowe: Will discuss 0.25% or 0.50% in July meeting
RBA June meeting minutes: Further interest rate hikes will be needed
Swiss trade surplus narrowed from 4.03B CHF to 3.12B CHF
Canadian headline and core retail sales at 12:30 pm GMT
U.S. existing home sales at 2:00 pm GMT
FOMC member Mester’s speech at 4:00 pm GMT
New Zealand GDT dairy auction coming up
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: CAD/CHF
Are my eyes deceiving me or am I seeing a double top breakdown on CAD/CHF?
The pair seems to have closed below the neckline of the reversal pattern around the .7500 major psychological mark, but a pullback is in order.
Stochastic is pointing higher, after all, so buyers might have enough energy to go for a retest of the former support zone. Meanwhile, moving averages are oscillating and have yet to give strong directional clues.
Of course this could all boil down to the outcome of Canada’s retail sales report, which is expected to show mixed results for the headline and core figures.
Headline consumer spending likely slowed from a 2.4% gain in March to a meager 0.5% uptick in April while the core version of the report probably accelerated from a flat figure to a 0.8% increase.
Apart from that, the oil-related Loonie might also take cues from commodity prices and overall market sentiment. The U.S. markets are about to reopen after a holiday, so we’re bound to see more exciting action in the upcoming session.
As for the Swiss franc, the SNB‘s surprise 0.25% interest rate hike last week still seems to be lifting the currency’s spirits. Guess this means they’re no longer hell-bent on keeping the franc weak like they used to!