Key Trading News - 07.07

Key Trading News - 07.07

Summary:

  • US economy is expected to add 179k new jobs
  • USDCAD could be in the spotlight as the jobs report from Canada will be revealed as well

There is no doubt that the most important release scheduled for today is the jobs report from the US economy. Admittedly, the yesterday’s ADP report was subpar, it failed to correctly estimate NFP readings in the last months. Moreover, there are a few releases worth looking at beyond it.

9:30 am BST - UK’s industrial production and trade balance: A rally in the GBP has slowed down recently as a further improvement in the data could be called into questioned. These concerns along with the beginning of Brexit talks raise concerns whether the UK’s economy is sufficiently resilient to downturns. Although, it seems that wages and inflation are the most relevant data for the BoE at this stage, any disillusions across other prints could potentially drag the pound down. Consensuses suggest that industrial output to rise 0.2% yoy while trade balance to widen its deficit to -10.8bn GBP - both figures are for May.

1:30 am BST - Jobs report from US and Canada: The US jobs report draws the most of attention today, however the same release will be released from Canada as well. As a result, the USDCAD could be the most volatile currency pair this afternoon. Needless to say that in case of the US wages should be scrutinized the most, this’s especially true when we factor in a current stance of the FED which suggested that a weakness in inflation was caused just by temporary factors. Consensuses are as follows:

  • US: NFP 179k, jobless rate 4.3%, average hourly earnings 2.6% yoy
  • Canada: employment change 10k, jobless rate 6.6%

3:00 am BST - Canadian manufacturing PMI: The latest print showed a massive decline from 62.4 to 53.8 and if the CAD is to retain its uptrend the data has to justify it. Moreover, manufacturing data are especially crucial for the Canadian economy as this part of economy accounts for the lion’s share of GDP growth. Consensus points to a rebound to 58.

The USDCAD remains in a narrow range. This type of market creates great trading opportunities, as "buy low, sell high" is probably the best option. Currently, lower demand zone is in play - as 1.2912 and 1.2927 has acted so far as a support preventing the price from its further decline. However, the first major support is located between 1.2952 and 1.2969 where we could expect a reaction and a further move to the upside. A zone between 1.3007 and 1.3031 is treated as a supply area as upper wicks move deeper into the zone. Source: xStation5

 

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