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Lots of action going on in the currency markets, and possibly one of the best ways to play it out into the weekend is through USD/CAD. With Canadian employment coming soon, this range bound pair may breakout soon.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12162.88 +0.57%
FTSE: 7199.88 +0.47%
S&P 500: 2943.20 +0.82%
DJIA: 26562.63 +0.82%
US 10-yr 1.649% +0.062
Bund 10-YR -0.485% +0.07
UK 10-YR: 0.552% +0.09
JPN 10-YR: -0.22% -0.017
Oil: 53.29 +1.33%
Gold: 1499.40 -0.89%
Bitcoin: 8511.00 -1.02%
Etherium: 191.74 -1.56%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Fed’s Mester speaks at John Carroll University at 10:30 pm GMT
  • New Zealand Manufacturing index at 10:30 pm GMT
  • Japan M2 money supply at 12:50 am GMT (Oct. 11)
  • German CPI at 7:00 am GMT (Oct. 11)
  • ECB’s Guindos speaks in Madrid at 11:30 am GMT (Oct. 11)
  • Canadian employment at 1:30 pm GMT (Oct. 11)
  • U.S. Import prices at 1:30 pm GMT (Oct. 11)
  • U.S. Consumer sentiment at 3:00 pm GMT (Oct. 11)

What to Watch: USD/CAD

USD/CAD 1-Hour Forex Chart
USD/CAD 1-Hour Forex Chart

There’s been a lot of choppiness going on with USD/CAD lately, evidenced on the one hour chart above as it seems to be currently stuck in a range between 1.3300 – 1.3350, which was preceded by a lower range between 1.3230 – 1.3275 in September. This behavior is likely on the roller coaster ride that is the U.S.-China trade war story that seems to put out positive/negative developments every few days, or in the case of the last trading session, every few hours.

But we could see a short-term break in this behavior on the upcoming economic event of the session, the latest Canadian employment data. Based on Forex Gump’s Canadian jobs preview, we could get a slow pace of employment growth that may lead to a selloff before the weekend if we see a much weaker-than-expected number. In this scenario, a break back above the broken support level of 1.3300 is likely to draw in buyers for a short-term play for the October highs around 1.3350.

But if the number comes roughly inline or better-than-expected, today’s breakdown in the pair to retest 1.3275 may have legs to move further down. In this situation, a break-and-retest of 1.3275 will likely draw in short-term momentum players to gun for the next support area around 1.3230, a reachable goal given the daily ATR of around 60 pips on this pair.

Of course, geopolitics is a big factor with this pair given the potential effects of a U.S.-China trade deal on both the U.S. dollar and Canadian dollar, so keep a watch out for news on that front as well given that high-level negotiations are taking place in Washington, D.C. this week as any kind of deal or no-deal could throw market sentiment out of wack from what we’re seeing today. It’s a tough market out there…trade safe!