On December the 3rd Canada reported a 6% unemployment rate, while the expectations were at a 6.6% level. Less than expected unemployment rate is always hawkish news for the national currency.
Trading plan for May 9
The greenback’s rally is continuing. The US dollar has renewed highs of the end of 2017. It is trading near 93. As a result, depreciation of other currencies against the USD increased. Tomorrow traders will pay attention to US producer inflation and core producer inflation data. The forecast is weaker than the previous data, however, if the actual one is greater than the forecast, the US dollar will continue its movement up. If the data appears to be as expected, there is a risk of a correction to the downside.
The euro is suffering a great fall. As on Monday, the European economic data appeared to be much weaker than expected, EUR/USD plunged below 1.19. The single currency fell so low for the first time this year. The pair has already broken the support at 1.1860 and moved further. No significant data is anticipated for the euro on Wednesday. So if EUR/USD closes below the support, the next one will lie at 1.1770. If the US dollar even slightly weakens on Wednesday, the euro will have chances to return to 1.19.
On Tuesday, oil benchmarks WTI and Brent are losing their highs. As a result, the Canadian dollar dramatically fell against the USD. No important data for the loonie were released on Tuesday. However, on Wednesday, traders will pay attention to building permits. If the data is greater than the previous one, the Canadian dollar will be able to recover. Up to date, USD/CAD pair broke the resistance at 1.2945. If the pair closes above 1.2945 and Wednesday’s economic data is not positive, the USD/CAD will break the next resistance at 1.30. If the oil is able to gain new highs and the USD’s rise slows down, the loonie will have chances to pull the pair to the support at 1.2860.
Thank you for your attention!
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