Source: PaxForex Premium Analytics Portal, Fundamental Insight
The US NFP Report for October is predicted to show 200K job additions and an unemployment rate of 3.6%. Forex traders can compare this to the US NFP Report for September, which showed 263K job additions and an unemployment rate of 3.5%. Private Payrolls for October are predicted to show 200K job additions, and Manufacturing Payrolls 15K job additions. Forex traders can compare this to Private Payrolls for September, which showed 288K job additions, and Manufacturing Payrolls, which showed 22K job additions. The Average Work Week for October is predicted at 34.5 hours. Forex traders can compare this to the Average Work Week for September, reported at 34.5 hours. Average Hourly Earnings for October are predicted to increase by 0.3% monthly and 4.7% annualized. Forex traders can compare this to Average Hourly Earnings for September, which rose 0.3% monthly and 5.0% annualized.
The Canadian Employment Report for October is predicted to show the addition of 10.0K jobs and an Unemployment Rate of 5.3%. Forex traders can compare this to the Canadian Employment Report for September, which showed the addition of 21.1K jobs and an Unemployment Rate of 5.2%.
Traders will await the US NFP report for October, which could confirm a robust labor market, giving the US Federal Reserve more reason to hike interest rates above previous expectations. US Fed Chair Powell noted the terminal rate would be higher than expected, and markets should begin to think about rates above 5.00%. US financial markets could notch their fifth consecutive losing session, snapping their bull trap and ending the bear market rally. Yesterday’s ISM Non-Manufacturing PMI showed rising prices to start the fourth quarter, confirming that inflation, inflationary pressures, and expectations have failed to decrease. As long as interest rates and yields rise, financial markets have not bottomed out.
The forecast for the USD/CAD remains bearish after the horizontal resistance area rejected this currency pair, allowing downside pressure from a technical and fundamental aspect to increase. Confirming the absence of short-term bullishness are the flat Kijun-sen and Tenkan-sen. Adding to the bearish outlook is the Ichimoku Kinko Hyo Cloud, which began to narrow, a sign of a potential longer-term trend reversal. Traders should also monitor the CCI after it has completed a breakdown from extreme overbought territory following a negative divergence. A move below zero could trigger the next wave of selling. Can bears overpower bulls and pressure the USD/CAD into its horizontal support area? 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 1.3615 to 1.3735 zone, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Short position
- Entry Level: Short Position @ 1.3665
- Take Profit Zone: 1.3205 – 1.3305
- Stop Loss Level: 1.3850
Alternative scenario:
Should price action for the USD/CAD breakout above 1.3735, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3850
- Take Profit Zone: 1.4000 – 1.4065
- Stop Loss Level: 1.3735
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