Top tier catalysts and volatility may hit USD/CAD ahead of the weekend, making the recent momentum lower and minor area of interest retest one to watch for the next session.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/USD ahead of the latest policy statement from the Bank of England, so be sure to check that out to see if there is still a potential play!
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US 10-yr 0.676% -0.036 Bund 10-YR -0.544% -0.042 UK 10-YR: 0.236% +0.005 JPN 10-YR: -0.003 +0.016 |
Oil: 25.74 +7.29% Gold: 1701.20 +0.75% Bitcoin: 9529.54 +1.80% Etherium: 206.93 +0.92% |
Fresh Market Headlines & Economic Data:
- US weekly jobless claims total 3.169 million, bringing seven-week tally to 33.5 million
- U.S. job-cut announcements surge in April to record, outplacement firm Challenger says
- Canada’s Ivey PMI falls to 22.8 in April vs. 26.0 in March
- BoE waiting to see how much lockdown lifted before QE decision: Bailey
- UK House prices fall -0.6% in April as coronavirus restrictions take hold
- Oil jumps on China export bounce but long-term outlook remains weak
- German Industrial production fell -9.2% m/m in March, -11.6% y/y
- No sign Britain wants EU trade talks to succeed – EU trade chief
- Italy retail sales fall 20.5% month-on-month in March
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- U.S. Consumer Credit change at 7:00 pm GMT
- U.K. Consumer confidence at 11:01 pm GMT
- Japan Household spending & average earnings at 11:30 pm GMT
- Japan Composite PMI at 12:30 am GMT (May 8)
- RBA Monetary policy statement at 1:30 am GMT (May 8)
What to Watch: USD/CAD
Looking a bit beyond today’s U.S. session and upcoming Asia session as volatility is likely to pare back for USD/CAD during this time period. We’ve got the latest U.S. and Canadian employment data coming up in the Friday U.S. trading session, likely to keep forex traders on the sidelines until then, unless we get surprise geopolitical news.
With both top tier events coming up, USD/CAD has a high probability of seeing volatility, so we will watch this pair for setups ahead of the weekend as it likely gives us the best opportunity to catch quick pips.
If you’re a bull on USD/CAD, looking out for a positive US update (highly unlikely) and negative Canadian update (highly likely) before considering a long position. If this scenario plays out, watch for buying support / bullish candlestick patterns from current market levels down to the next support area around 1.3900.
A break above the double top pattern around 1.4150 is something to consider as well, but give its distance from the market, its low probability at the moment that we’d see a sustained upside break unless the data is far from the expectations.
For the bears on this pair, the short-term trend is on your side, as well as oil’s latest rally, and if we see a negative US update (highly unlikely) and positive Canadian update (highly unlikely), then watch out for a resistance / bearish reversal patterns around 1.4100 up to 1.4150 before considering a short position.
Or if the market has yet to break below the current support reatest (around 1.4025) then watch out for a break and retest of this area before formulating a short play.
