Source: PaxForex Premium Analytics Portal, Fundamental Insight
The US NFP Report for November is predicted to show 180K job additions and an unemployment rate of 3.9%. Forex traders can compare this to the US NFP Report for October, which showed 150K job additions and an unemployment rate of 3.9%. Private Payrolls for November are predicted to show 153K job additions and Manufacturing Payrolls 30K job gains. Forex traders can compare this to Private Payrolls for October, which showed 99K job additions, and Manufacturing Payrolls, which showed 35K job losses. The Average Work Week for November is predicted at 34.4 hours. Forex traders can compare this to the Average Work Week for October, reported at 34.4 hours. Average Hourly Earnings for November are predicted to increase by 0.3% monthly and 4.0% annualized. Forex traders can compare this to Average Hourly Earnings for October, which rose 0.2% monthly and 4.1% annualized.
Preliminary US Michigan Consumer Sentiment for December is predicted at 62.0. Forex traders can compare this to US Michigan Consumer Confidence for November, reported at 61.3. Preliminary Current Conditions for December are expected at 68.5, and Preliminary Expectations at 57.0. Forex traders can compare this to Current Conditions for November, reported at 68.3, and Expectations, reported at 56.8.
The Canadian Capacity Utilization Rate for the third quarter is predicted at 81.0%. Forex traders can compare this to the Canadian Capacity Utilization Rate for the second quarter, reported at 81.4%.
Today’s NFP report will dictate currency flows during the session, and following the ADP disappointment with downward revisions to the previous release, the NFP could follow suit. The US labor market has begun to show cracks, but the severity of interest rate increases by the US Fed to contain inflation has not fully materialized.
The forecast for the USD/CAD remains bearish after this currency pair completed a breakdown below its narrowing Ichimoku Kinko Hyo Cloud, with the Senkou Span B flat and the Senkou Span A contracting. A bearish crossover would accelerate the current downtrend. Adding to selling pressure is the descending Tenkan-sen following its bearish crossover below the flat Kijun-sen. Traders should also monitor the CCI following its breakout from extreme oversold territory. This technical indicator has lost upside momentum and remains below zero, making it vulnerable to a reversal with plenty of downside potential. Can bears maintain control over the USD/CAD and pressure price action into its horizontal support area and a multi-month low? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the USD/CAD remain inside the or breakdown below the 1.3555 to 1.3620 zone, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Short position
- Entry Level: Short Position @ 1.3585
- Take Profit Zone: 1.3300 – 1.3375
- Stop Loss Level: 1.3665
Alternative scenario:
Should price action for the USD/CAD breakout above 1.3620, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3665
- Take Profit Zone: 1.3725 – 1.3755
- Stop Loss Level: 1.3620
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