Forex Crunch Superb Canadian Job Figures Save the Loonie |
- Superb Canadian Job Figures Save the Loonie
- Forex Daily Outlook – February 5th 2010
- 3 Vulnerable Currencies Towards the NFP
| Superb Canadian Job Figures Save the Loonie Posted: 05 Feb 2010 04:11 AM PST
Excellent Canadian job figures send USD/CAD down just before the pair was about to breach an important resistance line, while other currencies bow before the greenback. With an unemployment rate of 8.3%, the US can envy Canada. This exceeded early expectations for a steady 8.5% rate. The Employment Change number is also superb: 43,000 jobs were gained in Canada, almost three times the early predictions for a gain of 15,200 jobs. Earlier in the week, USD/CAD traded above 1.0530, the minor support line inside the 1.04-1.0750 range. During most of the week it traded far enough from 1.0750. After the dollar’s storm, the 1.0750 was breached, with USD/CAD reaching 1.0780. This break wasn’t confirmed before the release of the job figures – USD/CAD fell back to 1.0750. Instantly after the release, USD/CAD fell from 1.0750 to 1.0720. Although this isn’t a big drop, this saves the pair from jumping above the important resistance line of 1.0750. If this holds, the next line of support is at 1.0530, followed by the important 1.04 line. If American job numbers follow the American ones, and Non-Farm Payrolls are excellent as well, the 1.0750 barrier could be breached. The next resistance line appears at 1.0850, the last peak before USD/CAD fell into the 1.04 to 1.0750 range. Other Canadian figures were slightly disappointing this week: Building Permits rose by 2.4%, a little below the 2.7% rise that was predicted, but last month’s number was revised to the upside. Ivey PMI, and important gauge of the economy, rose to 50.8, short of early expectations for a rise to 52.3 points, but above the important 50 points mark – meaning expansion. For more about the loonie, read the USD/CAD forecast. Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| Forex Daily Outlook – February 5th 2010 Posted: 04 Feb 2010 02:00 PM PST
The busy week comes to a climax with the monthly circus around the Non-Farm Payrolls. A gain in jobs is expected in this major release. And there’s more on the menu. Let’s see what’s awaiting us: Australia left the interest rate unchanged at 3.75%, disappointing the markets. The RBA Monetary Policy Statement will give a further explanation to this decision at the start of the day. Japanese Leading Indicators will give a general glimpse of the economy. The Yen is enjoying some risk aversive trading. Britain’s PPI Input is predicted to rise by 0.7%, after a small rise of 0.1% last month. A bigger rise will force policymakers to rethink their policy. The accompanying figure, PPI Output, is predicted to rise by 0.3%. For more on GBP/USD, which is heading down, read the British Pound forecast. In the Eurozone, also suffering from trouble, German Industrial Production are predicted to rise by 0.6%, but it might be lower after yesterday’s German factory orders were disappointing. Check out the technical levels at the EUR/USD forecast. Moving across the Atlantic, Canadian employment figures are expected to be OK: a rise of 15,200 jobs and an unchanged Unemployment Rate of 8.5%. Canada had a few months of strong movements in jobs, but it seems to stabilize now. Currently the Canadian dollar is doing well against its American counterpart. For more on USD/CAD, read the Canadian dollar forecast. 90 minutes later, the big event is due. Non-Farm Payrolls are expected to show job gains. For the first time in over two years, the initial fresh read of NFP is predicted to be positive. November saw a rise in jobs, but this positive number was only seen in the revised version. Last month saw a disappointing drop in jobs. Yesterday’s weekly Employment Claims disappointed with a rise in claims, but the ADP NFP was better than expected. In addition to these regular numbers, we have a revision of figures from April 2008 to March 2009 this time. According to this report, a big downwards revision is predicted. Although this will be negative, the market focuses on fresh data, and I believe that we won’t see a big impact. The American unemployment rate isn’t expected to move from 10%. If the figure return to a single digit, this will sure help the dollar. For more, read my Non-Farm Payrolls preview. That’s it for the day and the week. Happy forex trading! Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| 3 Vulnerable Currencies Towards the NFP Posted: 04 Feb 2010 06:23 AM PST
The dollar is storming through the charts and making gains everywhere before the major release of the Non-Farm Payrolls. Not all currency pairs are equal – some are more vulnerable than others and approaching dangerous levels. A nice gain of jobs in the Non-Farm Payrolls could push them off the cliff. Here’s a quick update on three vulnerable currencies: Update: These three currencies already fell off the cliff, before the Non-Farm Payrolls on risk aversion. The NFP looks like a win-win situation for the dollar: a rise will show a strong American economy and send the dollar up, and weakness will trigger more risk aversion behavior – the dollar rises as well.
What about the others? The Swissy and the Yen are rather stable and far enough from dangerous levels. The Canadian dollar depends a lot on its own job numbers, released 90 minutes before the NFP, and it has its own strength. And the kwi already fell off the cliff following the leap in the unemployment rate. What will we see in the NFP? There are lots of confusing indicators, and the number could range from a big loss like last month or a neat rise. I’m optimistic. Further reading:
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