Matt Simpson, CFTe, MSTA
CityIndex
Not surprisingly prices were very sheepish and traded in narrow ranges following yesterday's excitement, and awaiting Nonfarms tonight. This type of environment tends to suit scalpers and short-term trades, whilst punishing those seeking breaks out established trends.
UP NEXT:
Whilst the markets still recover from last night's actions we have a decent bill of action tonight too. The chances are it may not be so explosive as the ECB actions but as long as we know where to look and for what reasons then opportunity should still await.
EUR: With growth linked to inflation (or lack of) we may find that a surprise upside figure from the Eurozone tonight could some profit taking on EUR pairs. Just don't expect it to change the increasingly bearish trend overnight.
US and CAD: With employment data released form both CAD and US at one then USDCAD could be the go-to pair. Please register for today's webinar for a break down of this release. Also note we have Ivey PMI for August. although Nonfarm data is likely to provide the most action.
TECHNICAL ANALYSIS:
As I will be hosting a webinar on Nonfarm Payroll shortly covering the majors, today I will include setups to monitor for the week/s ahead and a pair generally unrelated to NFP.
AUDCHF: Calm before the storm
A cursory glance at the upper timeframes will quickly confirm the bullishness of this pair. Trading above the daily pivot we should allow room for a downwards spike before the trend continues towards 0.877 and 0.884.
CADJPY: One for your watchlist
This may be one to monitor next week. However we remain within a bullish trend where a 'buy-the-dip' strategy is favoured. As we have Canadian employment data we could see some volatile here to which may require a redraw of the channel. Ideally CAD data will come in strong to help create a retracement towards the lower channel, allowing us to seek bullish setups from Monday onwards.
WTI: One for your watchlists
Price tested the 100 target set a few weeks back. I would not be seeking to buy at these lows along, however both WTI and Brent are pausing at support levels on W1 which suggests potential for a basing pattern to form.
Looking ahead, if an eventual bullish trend does develop then this would help see USD retrace over coming weeks and allow us to plan our Major cross trades too.
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