Who else is watching CAD ahead of Canada’s jobs data release?
If you are, then you’ll want to take a closer look at EUR/CAD’s potential range support!
Before moving on, ICYMI, yesterday’s watchlist checked out USD/JPY’s range resistance after BOJ official Uchida downplayed the impact of their potential monetary policy adjustments. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. weekly initial jobless claims fell to 218K vs. 220K forecast
FOMC member Barkin favors patient approach when it comes to timing of rate cuts, suggests that recent uptick in inflation may be “head fake” in that a rebound in prices is due soon
RBA Gov. Bullock said “The Board hasn’t ruled out a further increase in interest rates but neither has it ruled it in,” adding that “an inflation rate with a four in front of it is not good enough and still some way from the midpoint of our target.”
Banking and financial services company ANZ is forecasting the RBNZ to raise its interest rates by 25bps in February and in April, taking the official cash rate to 6.0%
BOJ Gov. Ueda backed up earlier comments from Uchida and downplayed potential rate hikes, saying that “Even if we end minus rates, the accommodative financial conditions will likely continue”
Chinese banks’ loan issuance hit an all-time high of 4.92 trillion CNY in January, beating January 2023’s 4.9 trillion figure and estimates of 4.67 trillion
Germany’s inflation rate confirmed at 0.2% m/m (2.9% y/y) as expected in January
Italy’s industrial production grew by 1.1% (0.8% expected, -1.3% previous) in December
Price Action News
Overlay of NZD vs. Major Currencies Chart by TradingView
The Japanese yen caught some decent moves earlier today after Bank of Japan (BOJ) Governor Ueda backed up his fellow official and downplayed the impact of the central bank exiting its negative interest rate policies.
NZD saw a bit more volatility, though, thanks to bank and financial services firm ANZ sharing its forecast that the Reserve Bank of New Zealand (RBNZ) would raise its interest rates by 25 basis points in February AND in April, bringing the official cash rate to a whopping 6.0%. Wowza!
The New Zealand dollar popped up on the news, clocking in the biggest gains against European currencies like CHF, EUR, and GBP while limiting its gains against fellow comdolls like AUD and CAD.
Upcoming Potential Catalysts on the Economic Calendar:
German Bundesbank President Nagel to give a speech at 10:30 am GMT
Canada’s January jobs data at 1:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
EUR/CAD 15-min Forex Chart by TradingView
If you’re looking for CAD setups to trade ahead of today’s Canadian jobs data release, then you’ll want to take a closer look at EUR/CAD’s range setup.
As you can see, the pair dropped like a rock earlier today as European currencies found it difficult to gain traction amidst expectations of central banks like the ECB and BOE not cutting interest rates as aggressively as the doves originally bet on.
Meanwhile, CAD may be getting an extra push from higher crude oil prices and/or pricing in Canada’s labour market data release.
If Canada sees another month of stronger-than-expected job creation, then the Bank of Canada (BOC) can join the RBA and RBNZ’s hawkish stances.
EUR/CAD, which is fast approaching a short-term range support, could bust through the area of interest and make new monthly lows.
We wouldn’t discount a buy-the-rumor, sell-the-news situation, though.
While EUR/CAD hasn’t hit the halfway mark of its daily average volatility, the pair could still draw in buyers around the 1.4485 range support area that’s also close to the S1 (1.4480) Pivot Point line.
A few bullish candlesticks around EUR/CAD’s current levels (or a few pips lower) could draw in buyers during the event and hold EUR/CAD inside its week-long range.
If we see EUR-buying or CAD-selling in the next trading sessions, then you’ll want to look at previous inflection points like the Pivot Point (1.4500) mid-range zone or the 1.4520 range resistance area as potential profit targets.
Good luck and good trading, errbody!
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