Yesterday it was the USDCAD pair that provided all the action and a great trading opportunity to TIOmarkets traders. We pointed out in yesterday’s Price Action Analysis video how USDCAD was trading below a key price zone and gave two targets for short trades. As soon as the BOC rate decision and Monetary Policy Report was published USDCAD collapsed right into our target zones and moved even beyond them. Both the BOC overnight rate and QE programs remained unchanged. This triggered USD selling vs. the CAD as it is expected that the US will indeed flood their economy with newly printed dollars and thus drive down its value. USDCAD is now trading near the recent channel low while crude oil has lost some momentum after challenging 56.40 resistance. This is likely to lead to further softness in USOIL bids in today’s trading. Elsewhere BOJ decided to maintain its interest rate policy at -0.1% and USDJPY dropped below 103.50 support. The pair traded to our T2 zone (103.23 – 103.35). Today’s most important risk event is the ECB press conference after the refinancing rate is announced. Consensus expects no change in the rate. The press conference, however, could bring volatility as any possible changes to their QE programme are revealed there. See our economic calendar for times and details. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

Australian employment numbers came in pretty much in line with analyst expectations. Employment change was 50K just as anticipated by the analyst consensus and the Unemployment rate was confirmed at 0.6%, 0.1% the expectations. As should be expected news that is in line with expectations is already priced in and doesn’t create volatility.  In our earlier analysis, we pointed out that AUDUSD was trading in a triangle formation. The pair retraced to the rising trendline at the bottom of the formation and after trading below it for a while started to rally again. This loss of momentum over the last two weeks is related to iron ore prices ranging after a long rally higher. AUDUSD now is nearing next key resistance level at 0.7805. Other key support and resistance levels are 0.7658, 0.7688, 0.7725, 0.7725 and 0.7820.

EURUSD didn’t provide a buying opportunity yesterday at 1.2116. Instead, price penetrated the level and retraced almost to the upper end of the bear channel it broke out of day before yesterday. This move was quickly rejected creating a higher low. This is bullish for EURUSD but we need to see how the market reacts to whatever the ECB has to say. The key support and resistance levels for this risk event are 1.2054, 1.2076, 1.2159, 1.2178 and 1.2222. Judging from the price action it seems that traders are willing to defend the 1.2080 support but we need to see follow-through buying in order to rally above yesterday’s high. At the moment the pair is little undecided ranging between 1.2050 and 1.2160. Due to this ranging nature of the market, we don’t have a strong directional bias for today’s trading. Should the ECB press conference create volatility we are looking for trade signals in both directions at key price levels. Open a VIP Black account with us. There are no per trade execution or monthly fees on our VIP Black accounts.

Recent macroeconomic data releases

  • US Average Hourly Earnings 0.8%, 0.2% expected
  • US Non-Farm Employment Change -140K, 60K expected
  • US Unemployment Rate 6.7%, 6.8% expected
  • US CPI 0.4%, 0.4% expected
  • US Core CPI 0.1%, 0.1% expected
  • US Core Retail Sales -1.4%, -0.1% expected
  • US Retail Sales -0.7%, 0.0% expected
  • Chinese GDP 6.5%, 6.2% expected
  • Canadian CPI -0.2, 0.1% expected
  • BOC Overnight Rate 0.25%, 0.25% expected

Important macroeconomic data releases this week

  • Australian Employment Change 50K, 50K expected
  • Australian Unemployment Rate 6.6%, 6.7% expected
  • BOJ Monetary Policy Statement
  • ECB Monetary Policy Statement
  • ECB Main Refinancing Rate 0.00% expected
  • ECB Press Conference
  • Philly Fed Manufacturing Index 11.2 expected
  • US Unemployment Claims 930K expected
  • New Zealand CPI 0.2% expected

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and it’s affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions.

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