Technical Analysis

What were the strongest and the weakest of the major currencies this week?

The JPY is the strongest. The NZD is the weakest.

The end of the week is nigh, and there are of course the strongest and weakest from the  major currencies.  

For the week, the JPY takes the top spot as the strongest currency, followed by the USD. 

You can justify the strength for each on the back of the flight into safety. The USD also continues to attract flows from a stronger economy (and liquidation in emerging currencies – more on that later)..  

On the downside the weakest currency was the NZD followed by the GBP. 

For the NZD, the RBNZ came out with more dovish statement and comments. 

More specifically, the RBNZ is still expecting the next move will be up, but have extended their expected time for the cash rate to stay at 1.75% from Q1 2020 to Q4 2020.   So it will be quite a potential wait for a change in policy.  

The dovish comments and the general “risk off” sentiment, sent the NZD tumbling lower.  The NZDJPY fell -2.90% on the week, which made it the biggest % mover for the week (of the major pairs).  

Looking at the NZDJPY chart below, the pair tried to move higher on Wednesday ahead of the RBNZ decision, but failed on the break of the 100 hour MA (blue line).  The headlines from the decision, sent the pair below a lower trend line on the hourly chart. The race lower was on.

The NZDUSD also fell -2.37% on the end of week snapshot. 

For the GBP. it fell on increased expectation of a no-Brexit outcome. GBPJPY tumbled 2.40% while the GBPUSD fell -1.86%.  

Looking at the hourly chart of the GBPUSD, the high price was reached in the first hour of trading on Monday, and the low was reached on Friday. So it was down from the get-go.  The pair stayed in a downward channel, with a couple of tests below the lower trend line during Friday’s trading (each failed).  That lower trend line will be key in the new trading week. 

Of course, the moves are just a snapshot of the major currencies vs each other (i.e. USD, EUR< JPY, GBP, CHF, CAD, AUD, and NZD).

The biggest movers of week (of most other currencies) vs. the USD were the Turkish Lira, the Argentinian Peso and the Russian ruble (see rankings of the emerging currencies vs the USD below).

The Turkish lira was crushed on the back of US sanctions against the country, and the Erdogan regime.  

In Argentina, the peso remains under pressure from emerging market and debt risks. They are also a corruption scandal that has touched some of the country’s top business leaders.

The Russian ruble is under pressure on the back of sanctions stemming from a March nerve-agent attack against a former Russian spy in the U.K. 

The Turkish lira fell over 20% vs the USD this week. The Argentinian Peso fell -6.83% and the Russian ruble fell -6.59%.  

A list of the emerging currencies shows that the Thai Baht, Indonesian Rupiah and the Philippine Peso were the only currencies with gains vs the USD and those moves were very limited. 

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