Earlier today, official data showed that non-farm payrolls rose just 98,000 in the previous month, missing analysts’ estimates for the creation of 180,000 jobs. Despite these disappointing numbers, the jobless rate unexpectedly declined to 4.5%, from the prior 4.7%, supporting the greenback. How did this news affected EUR/USD, USD/JPY and USD/CAD?

In our opinion the following forex trading positions are justified - summary:

• EUR/USD: short (a stop-loss order at 1.0967; the initial downside target at 1.0521)
• GBP/USD: short (a stop-loss order at 1.2738; the downside target at 1.2157)
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: none

EUR/USD

On the daily chart, we see that after several unsuccessful attempts to move higher, currency bulls gave up, which resulted in a drop below the recent lows. This suggests that what we wrote yesterday is up-to-date:

(…) we think that lower values of EUR/USD are more likely than not. Therefore, if the pair extends losses, (…) the initial downside target for currency bears will be around 1.0521 (slightly above the late February and March lows).

Very short-term outlook: bearish
Short-term outlook: mixed with bearish bias
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): Short positions (with a stop-loss order at 1.0967 and the initial downside target at 1.0521) are justified from the risk/reward perspective. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

USD/JPY

Quoting our last commentary on this currency pair:

(…) although USD/JPY broke above the green zone and the February lows, the 38.2% Fibonacci retracement encouraged currency bears to act. As a result, the exchange rate reversed and declined, invalidating the earlier breakout. Additionally, the Stochastic Oscillator generated the sell signal, which suggests another attempt to move lower in the coming day(s). If this is the case and we see such price action we’ll likely see a drop to 110.92 or even a test of the recent lows in the coming week.

From today’s point of view, we see that the situation developed in line with the above scenario and USD/JPY re-tested the late-March low. As you see, this support level encouraged currency bulls to act, which resulted in a pullback. Additionally, the Stochastic Oscillator generated the buy signal, which suggests that currency bulls will likely try to push the exchange rate to the green zone once again in the coming week. If we see a breakout above this resistance area, we’ll consider opening long positions.

Very short-term outlook: mixed with bullish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

USD/CAD

Looking at the weekly chart, we see that USD/CAD moved lower and slipped under the previously-broken lower border of the purple rising wedge, which is a negative development. Additionally, the sell signals generated by the CCI and the Stochastic Oscillator remain in place, suggesting another downswing. Nevertheless, in our opinion, such price action will be more likely if the pair closes the week under the purple line.

How did this drop affect the very short-term picture? Let’s check.

On the daily chart, we see that after several days in the blue consolidation USD/CAD broke below the lower line of the formation. Although the exchange rate rebounded, the CCI and the Stochastic Oscillator generated the sell signals, which suggests further deterioration in the coming week. Nevertheless, the pro bearish scenario will be more likely and reliable if the pair closes today’s session under the lower border of the consolidation. In this case, we’ll consider opening short positions. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts