The Canada Employment report will be released at 8:30 AM ET. The previews of the report can be found here (See “Canada Employment Report could send the loonie on another ride” and the Trends in the Canada Employment).
Technical levels for the USDCAD through the employment report.
From a technical perspective, the USDCAD is in the midst of an up and down period (12 days now) where the price has traded between 1.10775 and 1.12691. The high price for 2014 is 1.1277. So the high reached last week, came up just short. A move above the 1.1277 level would print headlines that the USDCAD is trading at 5 years highs (July 2009). Needless to say, this is key level to break and get above (see chart above).
Looking, at the hourly chart, the move up from yesterday’s low based near the 12 trading day low. The surge higher, has taken the price back above the 100 (blue line) and 200 hour MAs (green line) at the 1.11605 and 1.11707 levels respectively. These moving averages will be the major “line in the sand” for the bulls and bears in trading through the number. Stay above, and the bulls remain in control. Move below and the bias should be more bearish.
For a move higher, the technical levels are fairly simple. The high from today and last week came in at 1.12117 area. Move above this level, and the next targets will be 1.12336 (this is the 50% of the move down from the 2008 high to the 2011 low – not shown) and then the the 1.1269-77 highs for the year. A move above that area and the it opens the door to the upside. If we move above one level, look for that level to become support as the next level is targeted.
On a move lower on a stronger number, the next key support comes in at the 200 and 100 hour MAs at the 1.11707 and 1.11605 levels respectively (“Line in the Sand” – green and blue lines). A move below that key area (and staying below) will target 1.1134 which was a number of lows over the last 12 days, then the September 15 high price at 1.10978 (see chart) and finally, the low floor area at the 1.1075 to 1.10808 . This includes the low from October 2 and the low from yesterday. The 50% of the move up from the September 19 low is also in that area at 1.10775. So this a key target.
The levels are outlined. The number is unknown. Follow the flows. Look for momentum. If the number comes in as expected be aware of failed breaks and the potential for reversals. PS Of course there are other influences as well with the stock markets in a bit of tizzy. The US has little in the way of economic data (Import prices) but lows of speakers on the schedule (Plosser, ECB Constancio, ECB Linde, Feds George, Feds Fisher, Feds Lacker, ECB Praet). It is also Friday.
Good fortune with your trading.
