Trading plan for 10/02/2017:
At the end of the trading week, there will be a lot of economic releases during the American trading session. Two of them will catch the attention of the global investors, i.e.Unemployment Rate from Canada and the Preliminary University of Michigan Consumer Sentiment reading. For commodity traders, there is important release regarding Baker Hughes U.S. Rig Count.
01:30 pm GMT - Unemployment Rate and Employment Change from Canada
The market participants expect the unemployment rate to remain steady at the level of 6.9%, just as a month ago. The employment change is expected to decrease -10.3K after 53.k increase a month ago. The Canadian job market had been very stable during recent years, so that very conservative estimates are no surprise here.
The volatility at the USD/CAD pair might be quite high during the news release, so good plan is needed to trade at the market today. An attempt to break below the 200-period daily moving average in USD/CAD was short-lived as a broader Dollar rally has lifted the pair higher. Despite the advance in North American trading, the Loonie has shown inherent strength as the currency has been the only one among the majors that has not posted a loss against the Greenback. On the intraday H1 chart, the most important level is the dynamic resistance provided by the golden trend line, so if the data will be in line with expectations or better than expected, then the market should reverse lower toward the support at the level of 1.3093 (red arrows scenario). Any worse than expected data will cause a rally toward the level of 1.3211 again (green arrows scenario).
03:00 pm GMT - The Preliminary UoM Consumer Sentiment Indicator
Since April last year the sentiment among the US consumers is steady floating around the 100 level and this time the expectations are again quite similar than the statistical mean. The drop to 97.5 from 98.5 that is being expected by the market participants is virtually small and is still in the standard deviation range. The personal consumer confidence in economic activity remains steady in the US so far.
The most affected pair during the news release will be EUR/USD and if the sentiment reading will be significantly below the expectations ( 2x the standard deviation, which is around 8 points), then the EUR/USD might spike higher toward the next technical resistance at the level of 1.0704 (green arrows scenario). If the sentiment reading will be in line with expectations or significantly better, the EUR/USD pair will move even lower in order to test the next support at the level of 1.0619 (red arrows scenario).
Market snapshot - President Donald Trump recent comments
Comments from President Donald Trump sparked Dollar demand as he signaled that an announcement would be made regarding tax reforms. Trump indicated the announcement is to be made in two to three weeks and stated it would be "phenomenal in terms of tax."
The trade-weighted Dollar index dipped as low as 100.06 earlier today but has recovered toward this week's highs near 101.02 resistance. Any violation of this level would make the bulls in control over this market and they will eye the next technical resistance at the level of 101.73. The bias is to the upside as long as the lower low at the level of 99.22 is not clearly violated.
