Euro Searches for Support; USD/CAD Topside Targets Favored for NFP
Talking Points:
- EUR/USD Pares Losses Following Dovish ECB as Draghi Looks to Buy More Time
- USD/CAD at Risk for Fresh Monthly Highs on Dismal Canada Employment Report.
- USDOLLAR Continues to Push Fresh Highs Ahead of NFP; RSI in Focus.
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EUR/USD
Chart - Created Using FXCM Marketscope 2.0
- Despite speculation for additional monetary support (corporate bond-purchases/more attractive T-LTRO), it seems as though the European Central Bank (ECB) is trying to buy more time as President Mario Draghi tries to restore confidence in the Governing Council.
- Nevertheless, the long-term outlook for EUR/USD remains bearish amid the growing deviation in the policy outlook; next downside target comes in around 1.2310-20 (38.2% expansion).
- There’s been increased volatility in the DailyFX Speculative Sentiment Index (SSI) ahead of the ECB meeting, but the ratio has flipped back into positive territory, with the figure currently standing at +1.17.
USD/CAD
- Long-term outlook for USD/CAD remains bullish as the inverse head-and-shoulders pattern from earlier this year continues to generate higher highs & lows in the exchange rate.
- With Canada Employment expected to contract 5.0K in September, a marked slowdown in job growth may drag on interest rate expectations as the Bank of Canada (BoC) remains in no rush to further normalize monetary policy.
- Would like to see a close above 1.1430 (161.8% expansion) to favor a further advance, with the next topside region of interest coming in around 1.1530 (38.2% retracement).
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Read More:
EUR/USD Slumps Below $1.2400 as Press Conference Affirms Dovish ECB
Price & Time: Less Headwinds in the Aussie?
USDOLLAR(Ticker: USDollar):
|
Index |
Last |
High |
Low |
Daily Change (%) |
Daily Range (% of ATR) |
|
DJ-FXCM Dollar Index |
11273.29 |
11274.79 |
11205.73 |
0.37 |
107.37% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar Index continues to press fresh highs ahead of Non-Farm Payrolls (NFP), which is expected to show another 235K gain in employment.
- Beyond the headline reading, will also keep a close eye on Average Hourly Earnings amid the subdued outlook for inflation.
- Coming up against channel resistance, along with the next key region of interest around 11,308 (50.0% expansion) -11,312 (78.6% retracement).
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|
Release |
GMT |
Expected |
Actual |
|
Challenger Job Cuts (YoY) (OCT) |
12:30 |
-- |
11.9% |
|
Initial Jobless Claims (NOV 1) |
13:30 |
285K |
278K |
|
Continuing Claims (OCT 25) |
13:30 |
2365K |
2348K |
|
Nonfarm Productivity (3Q P) |
13:30 |
1.5% |
2.0% |
|
Unit Labor Costs (3Q P) |
13:30 |
0.5% |
0.3% |
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--- Written by David Song, Currency Analyst
To contact David, e-mail [email protected]. Follow me on Twitter at @DavidJSong.
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