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The U.S. ISM services PMI is up for release soon!

Will this seal the deal for NFP expectations and the dollar’s trend?

Before moving on, ICYMI, yesterday’s watchlist checked out a pullback setup on USD/JPY ahead of the ADP report. Be sure to check out if it’s still a valid trade!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

New Zealand ANZ commodity prices recover 1.0% after previous 0.3% dip

Australian building approvals surged 8.2% vs. projected 0.9% drop

Australian NAB business confidence index jumped from -2 to +18

Australia’s trade surplus narrowed from 9.76B AUD to 8.36B AUD

Spanish and Italian services PMIs fall short of forecasts to reflect contraction

Upcoming Potential Catalysts on the Forex Economic Calendar:

BOE monetary policy decision & MPC meeting minutes at 12:00 pm GMT
BOE Governor Bailey’s speech at 12:30 pm GMT
ECB monetary policy statement at 1:30 pm GMT
U.S. ISM services PMI at 3:00 pm GMT
U.S. factory orders at 3:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: USD/CAD

USD/CAD 1-hour Forex Chart

As you’ve probably guessed, I’m steering clear of the European currencies today since we’ve got a couple of central bank blockbusters from the BOE and ECB.

Instead, I’m turning my attention to this simple uptrend on USD/CAD ahead of the U.S. ISM services PMI release.

Number crunchers are projecting a decline from 62.0 to 59.5 to reflect slower industry growth, but dollar traders would likely zoom in on the jobs component to gauge their NFP bets.

Now market watchers are setting the bar pretty low for January, predicting a 145K gain in hiring versus the earlier 199K increase. Besides, leading indicators like the ADP non-farm employment change and the ISM manufacturing PMI reflected a downturn in hiring.

This suggests that anything positive from the non-manufacturing survey, as well as the Challenger job cuts report, might be enough to spur a pop higher for the Greenback.

USD/CAD is already finding support at the 50% Fib retracement level that’s right smack in line with a short-term rising trend line and the 200 SMA dynamic inflection point.

If this continues to hold, the pair could bounce back to the swing high near the 1.2800 major psychological mark. Downbeat U.S. data, on the other hand, might trigger a break lower and a reversal from the climb.