The occasion calendar was packed for the FX house and our strategists managed to place collectively a number of efficient concepts this week! Try our recap and tell us how you probably did!

AUD/USD: Monday – July 3, 2023

AUD/USD 30-Min Foreign exchange Chart by TV

To start out off the week, we centered on the upcoming financial coverage choice from the Reserve Financial institution of Australia and AUD/USD. Our Occasion Information for the RBA assertion confirmed that market expectations have been that the RBA would increase by one other 25 bps and will sign additional tightening forward.

Our thought was that if the RBA did increase rate of interest by 25 bps, then that might appeal to Aussie patrons, doubtlessly turning the rising ‘lows’ restest right into a help space as soon as once more on AUD/USD.

We additionally mentioned the potential for the RBA holding at 4.10%, which factors us to the technique of a possible downturn within the Aussie on the occasion. In that situation, our thought was to look at for a “break-and-retest” situation earlier than the potential for AUD/USD shifting in direction of a goal space of 0.6600 to 0.6620.

The second situation mentioned above appears to have been the one which performed out with the RBA holding at 4.10%, however with a bit extra volatility as AUD/USD climbed as excessive 0.6705 earlier than the bear took management and ultimately took the market all the way down to our goal space of 0.6600.

For individuals who leaned bearish after the speed maintain and threat managed properly, the end result ought to have been very favorable.

AUD/JPY: Tuesday – July 4, 2023

AUD/JPY 30-Min Foreign exchange Chart by TV

After the RBA hiked rates of interest as soon as once more in Australia, AUD really spiked to the draw back, seemingly a response to commentary that signaled the RBA thought that inflation has handed its peak.

This spike decrease really discovered help rapidly, drawing in sufficient patrons to not solely maintain the 96.00 main psychological space, however sparked a reversal again to pre-RBA announcement ranges!

From there, we have been intently watching the 96.60 for potential resistance to type, probably on the concept that merchants with recession expectations (in addition to long-shot hypothesis the BOJ are getting uncomfortable with JPY weak spot) may quick round that robust resistance space.

We have been additionally conscious of the concept that the FOMC assembly minutes may have an affect on AUD/JPY as properly via USD/JPY. Hawkish rhetoric from the assembly minutes may spark a bullish response in USD/JPY and doubtlessly drag the remainder of the yen pairs greater with it.

The focused 96.60 resistance was capable of maintain and as threat sentiment turned massive time on Wednesday, AUD/JPY started to attract in JPY patrons as one other spherical of disappointing international PMI updates signaled weakening financial circumstances.

From there, it was a stair step transfer to the draw back via the remainder of the week, with AUD/JPY ultimately 94.73, practically 200 pips from the 96.60 resistance space. Congrats to those that threat managed this pair to the draw back this week!

USD/CAD: Wednesday – July 5, 2023

USD/CAD 30-Min Foreign exchange Chart by TV

On Wednesday, we noticed this textbook downtrend setup on USD/CAD, with a number of technical arguments that favored the bears within the short-term.  But it surely additionally warranted a possible look as a bullish space to look at given the foremost catalysts forward, together with our catalyst of focus, the FOMC assembly minutes.

Volatility picked up rapidly in the course of the Wednesday London session, arguably a response in broad threat sentiment to a different spherical of enterprise survey updates from Europe and China.

This time it was an replace to companies sector sentiment, and it wasn’t trying too fairly as companies noticed continued value pressures in opposition to falling demand for companies.

The U.S. greenback picked up bulls (seemingly “protected haven” patrons) on the slight shift into threat aversion sentiment, and there was no assist from oil for CAD, as oil costs rallied within the session. FOMC assembly minutes didn’t reveal an new insights, in order that appeared to be a non-factor based mostly on the value response.

Regardless, USD/CAD had sufficient momentum and volatility to interrupt the descending channel on the session, and actually didn’t look again till Friday as threat sentiment stayed unfavourable because of rising expectations of upper rates of interest.

USD/CAD settled down roughly across the 1.3365 deal with  on Thursday earlier than the extremely anticipated U.S. Non-Farm Payrolls and Canadian employment reviews on Friday.

USD/CHF: Thursday – July 6, 2023

USD/CHF 30-Min Foreign exchange Chart by TV

On Thursday, we’re testing the rising channel on USD/CHF as a strategy to doubtlessly play the upcoming U.S. employment knowledge (e.g., non-public payrolls, job cuts, preliminary jobless claims, and so forth.). The pair was retesting the underside of a rising channel, which may appeal to merchants from either side.

Expectations on the time have been that U.S. preliminary jobless claims, the ADP report, Challenger job cuts, and JOLTS job orders scheduled will seemingly present a weakening U.S. jobs surroundings, and if that was the case, USD/CHF may weaken.

However we determined to stay with the hawkish Fed narrative, leaning in direction of a short-term bullish transfer that might see USD/CHF bounce from the rising lows to the 0.8980 – 0.9000 space. It’s there we’d seemingly think about closing to keep away from U.S. NFP volatility.

Appears like luck shined upon us as Thursday’s  spherical of U.S. jobs knowledge got here out extraordinarily robust, pushing USD/CHF as much as our 0.8990 – 0.9000 goal space inside simply a few hours. But it surely was there that USD/CHF bears took command, seemingly resulting from rising charge hike fears sparking robust protected haven flows on the session.

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