News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • The US Dollar will be bracing for a cascade of political risks including the first presidential debate, ongoing stimulus talks, the Supreme Court vacancy against the backdrop of key employment data. Get your #currencies update from @ZabelinDimitri here: https://t.co/quU4MmUjxA https://t.co/jF6ubwRz1P
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/3wsYlSxd26 https://t.co/PfIVibmqn1
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/lKvEMf4QRe
  • Weakness in equity markets continued last week as losses built and technical patterns hint further bearishness might be ahead. Get your #equities update from @PeterHanksFX here: https://t.co/GGVrB3r7if https://t.co/HPHUC8EG3o
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/q80wSAoxXP
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/7mc19Gxrvm
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/09/26/Gold-Price-Outlook-Rising-US-Dollar-Sinks-XAUUSD-Will-Losses-Extend.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/gPhy0KoW3W
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDnpPbn https://t.co/Xtk5g4JQEB
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/3Wked6GBOp https://t.co/SsUguHB39W
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/aD1ZWhTWZp
USD/CAD Levels Ahead of NFPs, Canada's Employment Figures

USD/CAD Levels Ahead of NFPs, Canada's Employment Figures

2016-07-08 08:20:00
Oded Shimoni, Junior Currency Analyst
Share:

Talking Points:

- USD/CAD trading above the 1.30 handle in early London trading hours

- US June NFPs firmly in the spotlight as the market seems to await the data for directional conviction

- GSI is a powerful big data indicator that can help you determine whether short-term trends will continue or reverse

The USD/CAD is holding above the 1.30 handle in early London trading hours, as the market appears to have settled into reduced activity ahead of the major event risk on the docket.

June’s US NFPs are firmly in the spotlight today. The market will want to see if the abysmal May report was a “one-off” or whether there is a clear shift in trend. Volatility seems likely to increase later on.

Taking this into consideration, we look to find short term trading opportunities using the Grid Sight Index (GSI) indicator.

USD/CAD Levels Ahead of NFPs, Canada's Employment Figures

Click Here for the DailyFX Calendar

US Non-farm Payrolls take center stage today. Following the abysmal May jobs report, US rate hike expectations plummeted before completely being priced out until 2018 following the “Brexit” vote. The Unemployment Rate is expected to tick up to 4.8% from the prior 4.7% print, while the headline figure is expected to show a rise of 180K as opposed to the prior weak 38k print.

The market tends to focus on the headline figure, and a revision to the prior print could prove quite significant as well this month to counter/add to pressures stemming from the June figures. The question on participants minds might be if the May figure was a “one-off” or a shift in job growth trend. Wage growth will be in focus as well for possible indication on inflation pressures; but making things complicated could be the US Dollar’s actual response to the data. Renewed USD “safe haven” status following the “Brexit” decision puts a question mark on the “normal” response.

Adding to the potential heightened volatility is June’s Canadian Employment Figures. Unemployment is expected to uptick to 7.0% from the prior 6.9% print. The Canadian economy is expected to show a reduced addition of 6.5k to the workforce from the prior 13.8k figure, and the data could help counter/add to pressures coming from the US numbers.

USD/CAD 5-Min GSI Chart: July 8, 2016

USD/CAD Levels Ahead of NFPs, Canada's Employment Figures

The USD/CAD has managed to hold above the 1.30 handle at the time of writing, and the GSI indicator shows that 48% of similar past momentum events have seen upside movements. The GSI indicator calculates the distribution of past event outcomes given certain momentum patterns, and can give you a look at the market in a way that's never been possible before, analyzing millions of historical prices in real time. By matching events in the past, GSI describes how often the price moved in a certain direction.

You can learn more about the GSI here.

USD/CAD Technical Levels:

USD/CAD Levels Ahead of NFPs, Canada's Employment Figures

Click here for the DailyFX Support & Resistance tool

We use volatility measures as a way to better fit our strategy to market conditions. The market seems likely to remain subdued until the NFP figures, which could induce significant volatility. In turn, this may imply that breakout trades are preferable following the figures.

USD/CAD 30-Min Chart: July 8, 2016

USD/CAD Levels Ahead of NFPs, Canada's Employment Figures

The USD/CAD appears likely to see heightened volatility given the aforementioned event risk. Due to the volatility, the very short term technical levels seem unlikely to have any significance. Taking this into consideration, initial support might be found around 1.2950 followed by a support zone above 1.2920, the 1.2889 level and an area above 1.2867. A zone between the 1.28 handle and the 1.2780 level may prove significant on an outsized move.

Levels of potential resistance on a move higher may be 1.3050 followed by an area around the 1.31 handle, and what looks like a significant resistance zone above 1.3150.

When price reaches those levels, short term traders might use the GSI to view how prices reacted in the past given a certain momentum pattern, and see the distribution of historical outcomes in which the price reversed or continued in the same direction. We generally want to see GSI with the historical patterns significantly shifted in one direction, which could potentially be used with a pre-determined bias as well.

A common way to use GSI is to help you fade tops and bottoms, and trade breakouts. That’s why traders may want to use the GSI indicator when price reaches those specific pre-determined levels, and fit a strategy that can offer a proper way to define risk. We studied over 43 million real trades and found that traders who do that were three times more likely to turn a profit. Read more on the Traits of Successful Traders” research.

Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing that about 52.8% of traders are long the USD/CAD at the time of writing. Retail traders flipped net long June 28 around the resistance zone around 1.3050, and added to longs as price moved down. When price moved higher, longs were being reduced with price peaking with almost exact precision at the “flip” price level.

You can find more info about the DailyFX SSI indicator here

--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com

To contact Oded Shimoni, e-mail oshimoni@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES