Source: PaxForex Premium Analytics Portal, Fundamental Insight
The US NFP Report for September is predicted to show 250K job additions and an unemployment rate of 3.7%. Forex traders can compare this to the US NFP Report for August, which showed 315K job additions and an unemployment rate of 3.7%. Private Payrolls for September are predicted to show 265K job additions and Manufacturing Payrolls 19K job additions. Forex traders can compare this to Private Payrolls for August, which showed 308K job additions, and Manufacturing Payrolls, which showed 22K job additions. The Average Work Week for September is predicted at 34.5 hours. Forex traders can compare this to the Average Work Week for August, reported at 34.5 hours. Average Hourly Earnings for September are predicted to increase by 0.3% monthly and 5.1% annualized. Forex traders can compare this to Average Hourly Earnings for August, which rose 0.3% monthly and 5.2% annualized.
US Consumer Credit for August is predicted at $24.50B. Forex traders can compare this to US Consumer Credit for July, reported at $23.81B.
The Canadian Employment Report for September is predicted to show the addition of 20.0K jobs and an Unemployment Rate of 5.4%. Forex traders can compare this to the Canadian Employment Report for August, which showed the loss of 39.7K jobs and an Unemployment Rate of 5.4%.
Today’s US NFP report could provide a volatility catalyst, as either outcome may cause traders to adjust their positions heavily. A hot number will ensure an aggressive US Federal Reserve, while a cold one could trigger fears that the central bank is causing heavy damage. Either way, traders should not overreact to one weak data point but note if the labor market remains tight. Another factor to watch is how Germany’s $200 billion rescue package will play out, as it could spike bond volatility, which will filter through to the Forex market.
The forecast for the USD/CAD turned bearish after this currency pair advanced into its horizontal resistance area, while the latest W1 candlestick formed a hammer, confirming its strength. Adding to the bearish outlook are the flat Kijun-sen and Tenkan-sen. The Ichimoku Kinko Hyo Cloud also entered a sideways trend, suggesting bulls are retreating. Traders should monitor the CCI as it reverses its breakdown from extreme overbought territory. It is likely to set a lower high before retreating below 100, which will offer sellers a final sell signal. Can bears maintain downside pressure and force 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 1.3670 to 1.3835 zone, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Short position
- Entry Level: Short Position @ 1.3745
- Take Profit Zone: 1.3265 – 1.3395
- Stop Loss Level: 1.3900
Alternative scenario:
Should price action for the USD/CAD breakout above 1.3835, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3900
- Take Profit Zone: 1.4000 – 1.4065
- Stop Loss Level: 1.3835
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