Trump announces trade deal with EU following months of negotiations
North-American currencies are leading majors this morning with the employment data beating expectations in the US and Canada.
US Non-Farm Payrolls Came at 139K vs 130K expected - but it seems like the market is extrapolating the info even more as ADP missed in the beginning of the week: The greenback is rallying strongly and risk assets are enjoying from the tone.
With Canadian data coming in at +8.8K vs -15K expected, the employment data from the Canuck has been surprising to the upside for a few months now.
The US Dollar is currently leading the Major Forex board, notably up 0.90% against the JPY and only up a small 10% against the Canadian Dollar.
The surprise was much bigger in Canada although the thesis is markets have been selling US Dollars since the beginning of the year, and this accumulation of positions puts many traders in the same trades.
With most key players acting on the same side of the market, the reaction is swift when data surprises, especially with US Markets rallying strongly towards yesterday’s highs and beyond - The S&P 500 just crossed 6,000.
USD/CAD 4H and 1H Chart Analysis
USD/CAD 4H
Source: TradingView
USD/CAD had been descending since the 13th of May and momentum is starting to stall - Momentum is bouncing from oversold.
Price Action from the 26th and 28th of May allow for the observation of a 4H Descending channel which isn’t too steep - a basis for more prolonged price action.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.
Although the stabilization around the Pivot Zone (1.3675 to 1.3686) points toward a retest of the higher band, met with the 4H MA 50.
It will be key to see how markets react if prices do get there.
Let’s take a closer look.
USD/CAD 1H
Source: TradingView
USD/CAD failed to maintain its 1H steeper descending channel, formed toward the end of May, as yesterday’s consolidation did not lead to a rejection of the higher band.
As a matter of fact, prices are forming an inverse Head & Shoulders pattern, further supported by the 1H MA 50.
The pattern measured move points to a move towards the 1.3740 resistance zone rejected on Tuesday, in confluence with a retest of the 1H MA 200 & the 4H MA 50.
There is basis for movement as the RSI is slowly going to overbought but still far from the zone.
Prices will need to move further, probably on more USD Strength or lack thereof, as we have formed two consecutive long-legged doji candles.
Safe Trades!
Which stock should you buy in your very next trade?
With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities.
In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record.
With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.