FX Chart Highlights: Pivotal charts ahead of FOMC, BoC and BoJ

USDCAD weekly – Does 1.3000 offer any support?
An important test for this pair tomorrow over the FOMC meeting and the Bank of Canada meeting already earlier in the day tomorrow. Already, dramatic rate spread widening in favour of CAD, where two-year rates are now several basis points above their US counterparts suggests that the pair should be trading lower, but the key area on the chart for CAD to prove itself against the big dollar is the 1.3000 area, the lowest level in just over 12 months. With both currencies facing potential surprises, the USDCAD will bear watching for whether a full-fledged breakdown unfolds here.

AUDNZD weekly
The Aussie is one currency that could prove particularly leveraged to US-China trade deal outcomes that look more promising and bring a more profound sense of détente than expected. Already, the AUD is on the move here versus its smaller Antipodean counterpart, the kiwi. A long speech yesterday from RBA governor Lowe suggests that the bank is against negative interest rates, perhaps adding a bit of a boost to AUDNZD, where the chart looks constructive for longer term gains and is on the move here locally as well. A close at new local highs here would suggest potential for the next layer of resistance starting with perhaps 1.1000, but possibly extending to the longer-term range high of interest near 1.1300.

EURSEK – last tactical resistance levels in view
EURSEK saw a sufficiently large sell-off recently to warrant some attention from bears as the sequence above 10.85 was rather robustly rejected, the last leg of selling come as the Riksbank’s most recent meeting showed a determination to get the policy rate back to zero even with the economic outlook not seen improving meaningfully. But for the bears to win the day sooner rather than later this latest bounce-back needs to fade around 10.80-85, otherwise the bearish case will have to await further developments. Stay tuned.