Forex traders are looking forward to today’s NFP report out of the US, expected to move the US Dollar in a volatile trading session. Revisions to the previous two months are equally anticipated, as of December’s report disappointed following a very strong November reading. A contraction in the average work-week or low wage growth could trigger a sell-off in the USDCAD. How will price action react following the release? Today’s fundamental analysis will take a look at price action in both directions.
Canadian employment data will be released simultaneously with the US NFP report. Economists predict a slowdown in the pace of hiring but a robust overall report. The USDCAD is in a waiting pattern inside of a strong horizontal resistance area. The Ivey PMI report may act as a secondary catalyst, but in which direction? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for US Dollar trades:
- US NFP Report: The US NFP Report for January is predicted to show 160K job additions and an unemployment rate of 3.5%. Forex traders can compare this to the US NFP Report for December, which showed 145K job additions and an unemployment rate of 3.5%. Private Payrolls for January are predicted to show 150K job additions and Manufacturing Payrolls 4K job losses. Forex traders can compare this to Private Payrolls for December, which showed 139K job additions and to Manufacturing Payrolls, which showed 12K job losses. The Average Work Week for January is predicted at 34.3 hours. Forex traders can compare this to the Average Work Week for December, which was reported at 34.3 hours. Average Hourly Earnings for January are predicted to increase by 0.3% monthly and by 3.0% annualized. Forex traders can compare this to Average Hourly Earnings for December were increased by 0.1% monthly and by 2.9% annualized. The Labor Force Participation Rate for January is predicted at 63.2%. Forex traders can compare this to the Labor Force Participation Rate for December, which was reported at 63.2%.
- US Wholesale Inventories and Trade Sales: US Final Wholesale Inventories for December are predicted to decrease by 0.1% monthly. Forex traders can compare this to previous US Wholesale Inventories for December, which decreased by 0.1% monthly. US Wholesale Trade Sales for December are predicted to increase by 0.4% monthly. Forex traders can compare this to US Wholesale Trade Sales for November, which increased by 1.5% monthly.
- US Consumer Credit: US Consumer Credit for December is predicted at $15.000B. Forex traders can compare this to US Consumer Credit for November, which was reported at $12.513B.
Here are the key factors to keep in mind today for Canadian Dollar trades:
- Canadian Employment Report: The Canadian Employment Report for January is predicted to show the addition of 17.5K jobs and an Unemployment Rate of 5.7%. Forex traders can compare this to the Canadian Employment Report for December, which showed the addition of 35.2K jobs and an Unemployment Rate of 5.6%. Hourly Earnings for Permanent Employees for January are predicted to increase by 3.5% annualized. Forex traders can compare this to Hourly Earnings for Permanent Employees for December, which increased by 3.8% annualized. The Participation Rate for January is predicted at 65.6%. Forex traders can compare this to the Participation Rate for December, which was reported at 65.5%.
- Canadian Ivey PMI: The Canadian Ivey PMI for January is predicted at 53.3. Forex traders can compare this to the Canadian Ivey PMI for December, which was reported at 51.9.
Should price action for the USDCAD remain inside the or breakdown below the 1.3280 to 1.3325 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.3310
- Take Profit Zone: 1.3100 – 1.3135
- Stop Loss Level: 1.3375
Should price action for the USDCAD breakout above 1.3325 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3375
- Take Profit Zone: 1.3525 – 1.3565
- Stop Loss Level: 1.3325
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