Trading plan for 06/10/2017:
During the Asian trading session, the market further strengthened the US Dollar, supporting the optimistic view before the NFP report. EUR/USD moved towards a new low at 1.1685. AUD loses the most by surprising comments from the RBA about possible interest rate cuts.
On Friday 6th of October, the event calendar is busy with important news release. The main event of the day is Non-Farm Payrolls report. Besides, market participants will pay attention to Halifax House Price Index data from the UK, Ivey Purchasing Managers Index, Employment Change, and Unemployment Change data from Canada. Moreover, later during the US session, two members of FOMC will give a speech: Robert Kaplan and William Dudley.
EUR/USD analysis for 06/10/2017:
The Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings, and Participation Rate data are scheduled for release at 12:30 pm GMT. Market participants expect the NFP to decrease from 156k to 82k in the reported month. The Unemployment Rate is expected to be unchanged at the level of 4.4% and Average Hourly Earnings data are expected to increase from 0.1% to 0.3% on a monthly basis.
An increased volatility is expected during the news release, but disturbances caused by recent hurricanes may arouse an inadvertent approach to the distorted data by the market. Employment change may suffer the most, but the main focus remains on the dynamics of wages as a guide for inflation. Better data will have a stronger impact on the USD, as they will show that despite the effects of hurricanes, the US economy is on a sound footing.
Let's now take a look at EUR/USD technical picture on the H4 time frame. The price failed to break out above the intraday technical resistance at the level of 1.1715, so currently the price is moving towards the nearest technical support at the level of 1.1662. In case of better than expected data, the important support at the level of 1.1610 should be tested and possibly even violated. In case of worse than expected data, the price might quickly reverse towards the technical resistance at the level of 1.1821.
Market Snapshot: USD/CAD above 78%Fibo
The price of USD/CAD has bounced from the lower channel trend line and violated the 785Fibo at the level of 1.2533. Currently, the price is heading towards the local swing high at the level of 1.2662 as market participants await the Ivey Purchasing Managers Index, Employment Change and Unemployment Change data release.
Market Snapshot: USD/JPY formed a triangle?
The price of USD/JPY has formed a triangle pattern, which is a continuation pattern. It indicates the market will move in the direction of the trend, which so far is up. Any breakout below the level of 112.19 would invalidate this scenario. The nearest target for the price is seen at the level of 113.25. In case of a breakout, the next technical resistance is seen at the level of 114.47.
