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Dec 7 – A Day Before the Big Day – US NFP Tomorrow!

Good morning, fellas. The markets remained quite volatile throughout the day as economic figures kept coming out. By the time I’m writing this, BOJ’s Kuroda tried to strengthen the Japanese Yen by saying BOJ will do whatever it takes to achieve mandates. Kuroda isn’t only in this race. We have a speech from ECB President Draghi and Of Course some other high impacted economic events.  

Top Economic Events Today

US Dollar – USD

Unemployment Claims are due to release at 13:30 (GMT) with a slight negative forecast of 239K as compared to 238K in the previous month. Let me add for new traders, this figure shows the number of individuals who filed for unemployment insurance for the first time during the past week. It’s a weekly data that’s why the impact remains for a couple of hours.

Canadian Dollar – CAD

Building Permits m/m is due at 13:30 (GMT) with a forecast 0f 1.7%, comparatively below the previous figure of 3.8%. The data shows a change in the total value of new building permits issued.

So, logically, people won’t request for capital assets until they see a brighter future and growth in the economy. Therefore, the increased percentage strengthens the CAD.

Eurozone – EUR

ECB President Draghi is due to hold a press conference presented by the Bank for International Settlements, hosted at the ECB, in Frankfurt. Let’s see if he offers any clue regarding future monetary policy actions. Overall, this speech seems to have muted impact.

Japanese Yen – JPY

Final GDP – At 23:50 (GMT), the cabinet office will be releasing data on Japanee gross domestic product data. It’s forecasted to be  0.4% vs. 0.3% in September. The Postive figure will place a bullish impact on a safe haven currency.

USD/CAD –  61.8% Retracement Completed

Yesterday, the Loonie beat up badly for two reasons:

1 – The BOC (Bank of Canada) decided to keep the interest rates on hold at 1%. Honestly, no one was expecting them to hike the rate, yet the impact was severe.

2 – A surprise drop in Crude Oil prices despite the draw in inventories, adversely impacted Canadian dollar.

At the moment, the pair has formed strong bullish candles reach to achieve 61.8% Fibonacci retracement at 1.2803. But the pair doesn’t seem to stop here. USD/CAD can find a resistance at 1.2825 and 1.2850.  

USDCAD - 4 - Hour Chart

USDCAD – 4 – Hour Chart

The leading indicators Stochastic and RSI have entered a buying zone, crossing above 50 in the daily timeframe.

USDCAD- Key Trading Levels

Support     Resistance

1.2689    1.2808

1.2653    1.2844

1.2594    1.2904

Key Trading Level:    1.2749

USD/CAD Trade Plan

Let’s keep an eye on $1.2750 to stay bullish. While we can try a sell entry near $1.2835//50 with a target of 1.2785 – 1.2745. Good luck, the real game is starting tomorrow, so save your margins for it.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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