Pound outperforms for the week while the euro lags – Weekly Market Report
Pound outperforms for a change while ECB easing expectations and worrying eurozone data take the euro lower for its fourth straight session.

EURUSD: Underperforms for the week as German recessionary fears rise and ECB stimulus package expected
It’s been a rough week for the euro, underperforming compared to the remaining FX majors and moving back towards the lower end of its weekly bear trend channel that has largely held for nearly a year. Its daily bear trend technical overview is intact, with its weekly showing ongoing heavily negative technical bias. The moves are in line with the current fundamental weakening in the eurozone economy, with last week’s German preliminary GDP figure contracting and raising fears of a recession out of the bloc’s manufacturing powerhouse. Furthermore, an ECB stimulus package could be in the works next month according to Rehn, which ideally should keep the euro weak. In terms of bias, institutional bias hasn’t budged from a majority short 56% as both euro long and short positioning dropped, while retail bias has surged 12% since the start of last week as shorts took profit.

GBPUSD: Pound outperforms for a change but fails to shift its technical overview
The pound was the top performer last week for a change, but with the greenback in second the price gains for this pair were limiting and failed to undo its current bear trend technical overview that has stalled at both the daily and weekly level as downside momentum weakens, and it would be interesting to see how much downside bias could still occur ahead of the October 31 Brexit deadline, with political uncertainty expected between now and then. With a trending ADX, a contrarian breakout to the upside on any good news (or rumors) can still be entertained, though keep in mind it runs contrary to the long-term technical overview. Lastly, institutional bias has risen to an at extreme short 79% with a reduction in both pound long and short positioning, and stands at a near opposite contrast to extreme long retail bias of 77%, 4% down on last week’s 81% due to profit-taking on fresh longs.

USDJPY: Yen weakens against the greenback, but negative technical bias persists
While the technical bias remains negative for this pair, with its weekly consolidatory technical overview getting tested on volatile movement, the catalyst here has largely been safe haven appetite which didn’t accelerate last week. The yen was a clear underperformer and the BoJ will certainly want a weaker yen to keep its export sector competitive which may have a hand in the future in terms of reigning in gains, especially if rumors of fresh BoJ easing prove true. Interestingly enough, institutional bias rose 10% to a heavy short 66%, a bias level unseen since November of 2016 as yen long positioning rose by 5.5K lots and yen shorts dropped by 8.6K lots. Any risk-on/off scenarios will keep the safe haven yen lively, and hence should be noted prior to initiating a trade in this pair.

USDCAD: Consolidatory moves befitting its consolidatory (short and mid-term) technical overview
Last week was range-bound movement with the greenback besting the Canadian dollar, but not by a healthy margin. And the tussle in the oil market continues between demand side woes running up against supply side geopolitical concerns, effecting the Canadian dollar in the process. In terms of Canadian data, both CPI and retail figures will be released this week, with the USD aspect effected by Fed minutes and Powell’s speech. Most of the indicators are neutral for this pair on the weekly but showing more positive bullish bias on the daily, with any retreat in energy prices further aiding that positive technical bias. As for institutional bias, it has dropped 4% as CAD longs dropped by 13.5K lots as opposed to a smaller 3.6K lot decrease in CAD shorts. Retail bias is an opposite heavy short 66%, with that bias rising 6% as longs get enticed into taking profits and shorts initiate anticipating retracement.

AUDUSD: Finishing only slightly lower in what has been an oscillatory week
Little change at the end of the week between the aussie and the greenback, and little turmoil in between with intraweek movement relatively sedate following better than expected Australian employment figures on Thursday but decent US data as well. There’s been little change in the price of iron ore, a key export, and USD gains have been registered more strongly in the FX market than that of commodities. Negative technical bias persists, and if the commodities market gets volatile would entice breakout strategies for the commodity currency over fading and reversals. In terms of bias, larger traders as per the latest CoT report upped their majority short bias by 3% to a heavy short 73% on a reduction in AUD longs by 6K lots and a simultaneous increase in AUD shorts by 1.4K lots, and is at a near opposite heavy long retail bias of 74%.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.