Source: PaxForex Premium Analytics Portal, Fundamental Insight
The US NFP Report for September is predicted to show 170K job additions and an unemployment rate of 3.7%. Forex traders can compare this to the US NFP Report for August, which showed 187K job additions and an unemployment rate of 3.8%. Private Payrolls for September are predicted to show 160K job additions and Manufacturing Payrolls 5K job additions. Forex traders can compare this to Private Payrolls for August, which showed 179K job additions, and Manufacturing Payrolls, which showed 16K job additions. The Average Work Week for September is predicted at 34.4 hours. Forex traders can compare this to the Average Work Week for August, reported at 34.4 hours. Average Hourly Earnings for September are predicted to increase by 0.3% monthly and 4.3% annualized. Forex traders can compare this to Average Hourly Earnings for August, which rose 0.2% monthly and 4.3% annualized.
US Consumer Credit for August is predicted at $11.70B. Forex traders can compare this to US Consumer Credit for July, reported at $10.40B.
The Canadian Employment Report for September is predicted to show the addition of 20.0K jobs and an Unemployment Rate of 5.6%. Forex traders can compare this to the Canadian Employment Report for August, which showed the creation of 39.9K jobs and an Unemployment Rate of 5.5%.
Traders will await the US NFP report following conflicting data on the US labor market released earlier this week. Rather than focusing on the US Fed raising rates one more time by 25 basis points or keeping them steady, the narrative of higher rates for longer, globally, should remain in focus. Other economic reports point towards weakening fundamentals and a recession in the US is the most likely outcome, which will provide month-long downside pressure on the US Dollar.
The forecast for the USD/CAD remains bearish after this currency pair spiked despite underlying economic weakness. The Kijun-sen and the Tenkan-sen are flat and failed to confirm rising bullish momentum. Adding to bearish pressures is the narrowing Ichimoku Kinko Hyo Cloud, with the Senkou Span A moving lower and the Senkou Span drifting higher. A bearish crossover could initiate a multi-week sell-off. Traders should also monitor the CCI, which spiked to a fresh multi-week high before retreating. A breakdown by this technical indicator from extreme overbought territory may provide the spark for a quick sell-off. Will bears overpower bulls and regain control over the USD/CAD to force price action 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 1.3700 to 1.3785 zone, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Short position
- Entry Level: Short Position @ 1.3725
- Take Profit Zone: 1.3395 – 1.3485
- Stop Loss Level: 1.3815
Alternative scenario:
Should price action for the USD/CAD breakout above 1.3785, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3815
- Take Profit Zone: 1.3880 – 1.3975
- Stop Loss Level: 1.3785
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