Some relative weakness in the Canadian Dollar heading into the US session, with the single currency selling off following the much weaker than expected employment data, which more than doubled consensus estimates.
Fundys – Not a lot to talk about overnight with a light session of trade failing to influence broader price action as market participants were more content on taking to the sidelines ahead of the highly anticipated US NFP release. UK PPI came in better than expected, while German industrial production was much weaker. However, there was some relative weakness in the Canadian Dollar, with the single currency selling off following the much weaker than expected employment data which more than doubled consensus estimates. The fact that the unemployment rate held steady at 8.6%, which was better than the expected 8.8%, failed to prevent the Loonie from some aggressive selling, with Usd/Cad easily breaking into the mid-1.0800’s. The Australian Dollar was also weighed down with many traders seen booking profits in the stronger currency on speculation that the RBA may have been overly optimistic in its latest monetary policy report. Sterling continued to underperform on the back of yesterday’s shocking decision by the Bank of England to extend and up its quantitative easing programme. Looking ahead, NFP (-328k expected) and the unemployment rate (9.6% expected) are due at 12:30GMT, followed by Canada Ivey (54.0 expected) at 14:00GMT. Consumer credit (-$3.7B expected) caps things off at 19:00GMT. US equity futures point to a lower open, while commodities are also weighed down, with crude oil leading the way.
For information on the above tables, please visit our Guide to Morning Slices Quant section
Techs - EUR/USD looks to be carving short-term top with a deeper setbacks now seen back towards the 10-Day SMA by 1.4265 over the coming session. A lower top is now sought out below 1.4430 to be confirmed on a break of 1.4330. Above 1.4430 negates. USD/JPY still locked in some directionless trade with the market needing to break above 95.90 or below 94.00 for clearer directional bias. Overall however, the trend is still bearish. GBP/USD finally in the process of undergoing a much needed and healthy corrective pullback after rallying to fresh 2009 highs by 1.7040 on Wednesday. Next support now eyed in the 1.6600 area with only a break back above 1.6880 giving reason for concern. USD/CHF not willing to breakdown down just yet after just squeaking out fresh 2009 lows by 1.0560 on Monday. The market has been consolidating back above 1.0600 to keep basing prospects intact for now. Back under 1.0560 negates while above 1.0700 accelerates gains.
Flows – Models on the bid in Eur/Gbp. Commercial offers in Usd/Jpy. Asian central bank bids in Eur/Usd. Asian account, UK clearer and CTAs selling Cable.
Trade of the Day – Usd/Cad: No new trade recommendations here. We are sticking with our current long position in the pair though and look for additional gains over the coming sessions with the market still showing plenty of room to run. Key resistance comes in by 1.0935 and we look for a push towards this level at a minimum. A break above 1.0935 will set up a bullish outside week. POSITION: LONG @1.0660 FOR AN OPEN OBJECTIVE, REVISED STOP @1.0660.
P&L Update and Overview: Many of you have been asking for a way to better track trading results and open positions. In response to these requests and in an effort to be fully transparent, a simulated portfolio was been created in June to track and mirror all recommendations and trades. Below is a return on equity curve since inception on June 1, 2009, along with an open and closed position tracker. I am hopeful that this will make things easier for you all.
Additionally, please feel free to check out a [B]full profit and loss statement since inception on June 1, 2009[/B].
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
If you wish to receive Joel’s reports in a more timely fashion, e-mail [email protected] and you will be added to the “distribution” list.
Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)
Visit the DailyFX Forex Stream for Real-Time News and Market Updates