Recent crude oil rallies and expectations for a strong jobs rebound in Canada could join forces to lift the Loonie over the next few hours.
Fresh Market Headlines & Economic Data:
- WSJ: OPEC delegate mentioned 500K in additional output cuts possible
- Crude oil supported but still shaky ahead of OPEC+ announcement
- Australia AIG construction index down from 43.9 to 40.0
- Japanese average cash earnings y/y up by another 0.5% vs. projected 0.2% uptick
- Japanese household spending down by 5.1% vs. projected 3.1% slump
- Japanese Finance Minister Aso: Negative rates are hurting banks, in turn hurting individuals
Upcoming Potential Catalysts on the Forex Calendar:
- German industrial production at 8:00 am GMT
- French trade balance at 8:45 am GMT
- SNB foreign currency reserves at 9:00 am GMT
- U.K. Halifax HPI at 9:30 am GMT
- OPEC-JMMC meetings still ongoing
- Canadian jobs report and NFP release coming up
What to Watch: CAD/JPY
This pair is starting to form an ascending channel on its 1-hour time frame and might be due for a pullback to the Fib retracement levels. A shallow correction might be in the works as economic catalysts are looking bullish for the Loonie.
At the same time, stochastic is already dipping into the oversold region to signal exhaustion among sellers. Turning back up could confirm that support is likely to hold and push the pair to the swing high or channel top.
Trends are also looking bullish based on the SMAs and EMAs. Still, the upcoming jobs report could be a risk factor, and a downside surprise could drag the pair to the lowest Fib or channel bottom.