The past few days have been very chaotic with a string of economic releases. I haven’t been trading any technical setups because of the periods of low volatility in-between these economic releases.
The Euro had a pretty interesting week with several pairs testing their respected levels. We are starting to see a sell off right now, which I presume is in anticipation of tomorrow’s Non-Farm Payrolls.
Starting with the EURGBP pair, it tested a significant support zone and had a very nice run. I expect the EURGBP pair to continue its run as the Great Britain Pound looks to be returning to its bearish trend.
Taking a look over at the GBPUSD pair, volatility has died off recently and we’re looking at this 1.5470~ level as a potential supply. If this level holds, we’ll see a break-out from this consolidation following a bearish Pound movement.
The USDCAD pair has had its swings especially today with an insane 62.3 Ivey PMI reporting. However, this pair is still channeling. I don’t expect this channel to hold up given the Non-Farm Payrolls tomorrow.
There isn’t much going on with USDJPY. It is currently stalling at the 124.00~ level as it waits for the NFP results tomorrow. I am overall bullish as signaled by the surprise in unemployment claims. If you look at the historical trends in the initial jobless claims and non-farm payrolls, inversely correlated.
The slight fall in initial jobless claims should see a soft rise in the non-farm payrolls. This is also supported by the positive ADP Employment change released two days ago.
Once again, be prepared to expect a soft rise in the NFP figure. How exactly would I trade this? The pair I would mostly be focusing on is the USDJPY. Usually I stick with EURUSD just for the slight spread advantage, but given the Euro’s strength as the Greece talk continues it would be much safer to trade the devalued Yen.