Forex News | Currency News by Forexlive

It’s hard to argue with the guys who are getting it right, and these guys have been pretty good over the last few months. They took profit on their EUR/USD short position somewhere on the 1.32 handle and they re-sold overnight when the pair rallied hard above 1.3500. Their stop is now above 1.3650 with a minimum profit target at 1.3145 and possibly 1.2860.

Very interesting to read something Jamie posted overnight from Vincent Cignarella where he pointed out that last time the swap lines were announced, EUR/USD rallied 200 pips before crashing 700 in the two weeks thereafter.

The question is whether market conditions are the same this time around? As we know, the world is bearish EUR and many speculative players are short and I do not know whether this was the same as last time. From a price-action perspective, I think I’d prefer to try buying EUR/USD between 1.3360/1.3400, looking for perhaps another short squeeze up towards 1.3800. Risky play definitely given the EU situation, but no news is also good news for the EUR so all it might take is a few days of non-events and that could trigger the next rally.

Whatever you’re doing, buying or selling, keep stop-loss orders fairly manageable and let those profitable trades run.

I had a small bid in the market at 77.40 overnight which got filled and I’m adding to that position at 77.60, now that my levels have been confirmed. I have a stop on the position below 76.50. The 100-day MA at 77.20 and the 15-day MA at 77.30 are the initial support levels, as is the bullish trendline from 75.30 through 76.55. If these levels are breached over the next few days, then I’ll probably look to exit the trade early.

Elsewhere in the Emerging Markets, we saw China lower it’s RRR by 50 bps overnight and Brazil also cut it’s interest rates by 50 bps.

Chinese PMI data due out in 2 hours might also add to volatility this morning, especially in the AUD.

Regardless of what happened overnight, local dealers still expect Tokyo to do it’s usual trick and hit the sell button after the big overnight rally. Getting timing right will as always prove difficult but it is generally true that Asia trades against the overnight trend.

Liquidity was very poor overnight and the AUD/USD saw an almost 400 pip range. It’s December, and it’s only going to get worse.

Real money players were active buyers of the AUD, and were particularly busy selling EUR/AUD, and there was also some small-ish NZD/USD demand.

If you’d like to share your day-trading ideas, please keep them on this thread.

By Joshua Michelson

OTTAWA (MNI) – Canadian jobs are expected to have grown by a modest
10,000 new positions in November, in track with a slowly growing
economy, according to analysts surveyed by Market News International.

Statistics Canada in its monthly Labour Force Survey on Friday is
expected to record a small bump in job creation for the month, following
a large plunge of 54,000 jobs lost in October. The national unemployment
rate is expected to remain at 7.3%.

The addition of 10,000 jobs for November is a consensus figure, the
median of analyst expectations as surveyed by MNI, which ranged very
widely from no change to nearly 40,000 new jobs. Analysts had widely
differing expectations and reasons for a generous or non-existant
rebound. Some thought a rebound likely believing recent job losses too
dismal for an economy that is still growing, albeit slowly, while others
were less optimistic, expecting no new jobs.

The large decline in October was mostly credited to heavy losses of
full-time positions in both the manufacturing and construction
industries, and Benjamin Reitzes, economist with Bank of Montreal
Capital Markets, sees these sectors as continuing to have been weak in
November.

Reitzes said in an interview that “manufacturing and construction
tend to lead or be a pretty good coincident indicator of overall
employment, being cyclical sectors, and give you an idea of economic
momentum in general”. They suggest, he added, that the Canadian economy
is losing some momentum and therefore he sees no new jobs in November.

Reitzes further thought that October’s dramatic job loss may not
have been temporary and unusual but a sign that the economy may be
weaker than many believe.

Economist Diana Petramala at TD Canada Trust wrote to clients that
she expects a minute 5,000 jobs to have been added in November. And
with some expected growth in the labor force, she expected the
unemployment rate to increase to 7.4%. Her expectation is based on mild
increases in hiring for the retail market due to the holiday season, as
well as in the health sector. Furthermore, she expects such industries
as manufacturing and construction to continue to see losses for the
month as was seen in October.

David Madani, a Toronto-based economist with Capital Economics
Ltd., said in an interview that he expected around 30,000 jobs to be
added in November. Madani explained his much higher expectation on a
belief that recent employment figures have been overly weak and a
rebound is therefore in order. He expected to see the unemployment rate
drop a notch to 7.2%.

Emanuella Enenajor, an economist with CIBC Economics, wrote in The
Week Ahead forecast that she expects to see 25,000 jobs added in
November. Like Petramala, Enenajor cited increases in retail and in
health care, but also in the transport and wholesale trade industries.
Enenajor said that any gains will most likely stem from the private
sector as the government continues to tighten spending. She believes
this gain will not be enough to change the unemployment rate from its
current 7.3% due to growth in the labour force.

As for the months ahead, most analysts spoken with see only slight
job additions in the Canadian market over the next few months. They see
new entrants to the labour force outpacing job creation. Madani from
Capital Economics captured a general opinion when he said “We don’t see
the unemployment rate generally drifting lower over the next 6-12 months
as we see the economy slowing. We see the unemployment rate drifting
higher in the next 12 months”

–Joshua Michelson is a reporter for Need to Know News in Ottawa

** Market News International – Ottawa **

[TOPICS: M$C$$$,MAUDS$]

The immediate danger of another big credit crunch has been alleviated overnight by the combined central bank action and this caused heavy short-covering in European banking stocks and also a big rally in all ‘risk-on’ trades. The 50bps drop in the Chinese RRR went almost unnoticed in comparison.

EUR shorts were forced to cover and there may be more to come, so care is warranted. The AUD was heavily in demand and it was the best-performed of the G10 currencies through the night.

Good luck today.

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