Loonieviews 2Sep16


Will strong NFP off-set weak ISM?

USDCAD Open (6:00 am) 1.3103-07 Overnight Range 1.3083-1.3112 2 Sept16

FX-At-A-Glance

NOTE: This chart represents gain (or loss) of G10 currencies vs the US dollar from NY close (4:00pm) to Sept. 1, 6:00 am EDT

FX traders appeared to hibernate during the Asia session That changed in Europe. US dollars were bought, very timidly, but bought, nonetheless. GBPUSD rose on strong Construction PMIs and Eurozone PPI was slightly better than expected although it didn’t help EURUSD.

The greenback opened in New York slightly higher than where it closed on Thursday. Yesterday’s sharply weaker-than-expected ISM Manufacturing PMI report added a huge wrinkle into the US rate hike debate. Anticipation for a September rate hike or the very least, a hawkish FOMC statement deflated faster than a balloon on a cactus farm. The US dollar tanked against all the G10 currencies. But that was yesterday.

Today is nonfarm payrolls day. As usual, guestimates are all over the map. The consensus is for a gain of 180,000, the unemployment rate at 4.8% and average hourly earnings at 0.2%. If NFP is over 210,000, traders will buy US dollars and the move should be sustained throughout the day. If NFP is 160,000-200,000 , the US dollar will be bought but it is debatable if the move will be sustained through the day. If NFP is below 150,000, the US dollar will be sold.

Today will be a fairly short day for traders. Once the fun and games from the employment data are complete, traders in the US and Canada will be looking for the exits to get an early start on the last long weekend of the summer.

USDCAD technical outlook.

The intraday USDCAD technicals are unchanged from yesterday. They are bullish while trading above 1.3080 and still looking to break resistance at 1.3150 which will extend gains to 1.3190 and then 1.3250. A move below 1.3080 would target 1.2990 and suggest additional 1.2900-1.3150 consolidation. Longer term, the USDCAD uptrend from May remains intact while prices are above the 1.2750-70 zone. For today, USDCADS support is at 1.3090 and1.3060. Resistance is at 1.3150 and 1.3190.

Today’s Range 1.3090-1.3190

Chart: USDCAD 4 hour

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Author: Loonieviews

In the past 30+ years, I have been an FX interbank market making trader, a high performing FX and Derivatives Sales person, creator of simple and complex risk mitigation strategies and a manager of high performance FX teams. The Trade of the Day is a culmination of that experience. Retail FX traders have access to a well-crafted and carefully researched FX trade strategy designed to generate FX profits while mitigating losses.

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