Sample Category Title

Daily Pivots: (S1) 1.1543; (P) 1.1558; (R1) 1.1567; More...

Further decline is still expected in EUR/USD with 1.1639 resistance intact. Fall from 1.2348 high is in progress and should target 1.1289 medium term fibonacci level. On the upside, break of 1.1639 resistance, however, will indicate short term bottoming. intraday bias will be turned back to the upside for stronger rebound.

In the bigger picture, sustained break of 1.1602 will argue that rise from 1.0635 (2020 low) has completed at 1.2348. Deeper fall would be seen to 61.8% retracement of 1.0635 to 1.2348 at 1.1289. Note also that rejection by 55 week EMA (1.1830) also carries medium term bearish implication. Firm break of 1.1289 will pave the way to retest 1.0635 low. On the upside, though, break of 1.1908 resistance will revive medium term bullishness and turn focus back to 1.2348 high.

Daily Pivots: (S1) 1.3578; (P) 1.3608; (R1) 1.3645; More...

Intraday bias in GBP/USD is back on the upside as rebound from 1.3410 is trying to resume. Sustained trading above 55 day EMA (now at 1.3730) will affirm near term bullishness and target 1.3912 key resistance. On the downside, though, break of 1.3542 minor support will retain near term bearishness, and turn bias back to the downside for 1.3410 low.

In the bigger picture, fall from 1.4248 is at least a correction to the up trend from 1.1409 (2020 low). Such correction could extend to 38.2% retracement of 1.1409 to 1.4248 at 1.3164 before completion. However, considering the rejection by 1.4376 key resistance (2018 high), sustained trading below 1.3164 will argue that it's indeed a bearish trend reversal and would target 61.8% retracement at 1.2493. Nevertheless, break of 1.3912 resistance will revive medium term bullishness and target 1.4248/4376 resistance zone again.

Daily Pivots: (S1) 0.9264; (P) 0.9279; (R1) 0.9304; More....

USD/CHF is staying in range below 0.9367 and intraday bias remains neutral first. As long as 0.9214 support holds, further rally is in favor. On the upside, break of 0.9367 will resume the rise from 0.8925 to 0.9471 key resistance next. On the downside, however, break of 0.9214 will turn bias back to the downside for 0.9017 support again.

In the bigger picture, the strong rally above 55 week EMA (now at 0.9188) now tilts favor to the case of bullish trend reversal. That is, decline from 1.3042 (2016 high) is probably completed at 0.8756 already. Sustained break of 0.9471 resistance should confirm this case and pave the way to retest 1.0342 ahead. However, rejection by 0.9471 will mix up the outlook again and retain some medium term bearishness.

Daily Pivots: (S1) 111.36; (P) 111.51; (R1) 111.78; More...

USD/JPY retreats after failing to break through 112.07 resistance and intraday bias stays neutral for the moment. Consolidation from 112.07 could still extend. But in case of another retreat, downside should be contained by 110.44 support. On the upside, above 112.07 will extend larger rise to 61.8% projection of 102.58 to 111.65 from 109.11 at 114.71 next. However, break of 110.44 will dampen the bullish case and turn focus back to 109.11 support.

In the bigger picture, break of 111.71 resistance suggests that the whole corrective decline from 118.65 (2016 high) has completed at 101.18 (2020 low) already. Medium term bullishness is also affirmed as USD/JPY stays well above 55 week EMA (now at 108.60). Sustained trading above 111.71 will affirm this bullish case. Rise from 101.18 could then be resuming whole rally from 98.97 (2016 low) through 118.65. This will now be the preferred case as long as 108.71 support holds.

Daily Pivots: (S1) 1.2527; (P) 1.2564; (R1) 1.2586; More...

USD/CAD's decline continues today and breaches 1.2492 support. Current decline is seen as the third leg of the pattern from 1.2947, and intraday bias stays on the downside for the moment. Overall, with 1.2421 support intact, rise from 1.2005 should still be in progress for another rise through 1.2947 at a later stage. On the upside, break of 1.2592 will turn bias back to the upside for 1.2773 resistance first. However, sustained break of 1.2421 will argue that larger rise from 1.2005 has completed and turn near term outlook bearish.

In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). It should have completed after hitting 1.2061 (2017 low) and 50% retracement of 0.9406 to 1.4689 at 1.2048. Sustained break of 38.2% retracement of 1.4667 to 1.2005 at 1.3022 will pave the way to 61.8% retracement at 1.3650 and above. Overall, medium term outlook remains neutral at worst with 1.2048/61 support zone intact.

Dollar tumbles in US session after another huge non-farm payroll miss. On the other hand, Canadian Dollar surges notably after solid employment data. As for the week, the Loonie is now in a pole position to end as the strongest. Yen is still the worst performing, but we'd see if Dollar would over take its position before ending the week.

In Europe, at the time of writing, FTSE is up 0.16%. DAX is up 0.03%. CAC is down -0.18%. Germany 10-year yield is up 0.010 at -0.172. Earlier in Asia, Nikkei rose 1.34%. Hong Kong HSI rose 0.55%. China Shanghai SSE rose 0.67%. Singapore Strait Times rose 0.38%. Japan 10-year JGB yield rose 0.0101 to 0.088.

US non-farm payroll grew 194k in Sep, well below expectation

US non-farm payroll employment grew 194k only in September, well below expectation of 500k. Total employment is still down by -5.0m, or -3.3% from its pre-pandemic level in February 2020. Unemployment rate dropped notably from 5.2% to 4.8%, better than expectation of 5.1%. Labor force participation rate was little changed at 61.6%. Average hourly earnings rose 0.6% mom versus expectation of 0.5% mom.

Canada employment grew 157k in Sep, regained pre-pandemic level

Canada employment grew 157k, or 0.8% mom in September, well above expectation of 61.2k. Employment regained pre-pandemic level in February 2020. Jobs in services-producing sector surpassed pre-COVID level but was still down -3.2% in goods-producing sector. Unemployment rate dropped from 7.1% to 6.9%, matched expectations. Labor force participation rate was at 65.5, also matched pre-pandemic levels.

China Caixin PMI services rose to 53.4, PMI composite rose to 51.4

China Caixin PMI Services rose to 53.4 in September, up from August's 46.7, above expectation of 49.3. PMI Composite rose to 51.4, up from 47.2 in August.

Wang Zhe, Senior Economist at Caixin Insight Group said: "Both market supply and demand recovered, and improvement in the services sector was stronger than in the manufacturing sector. Impacted by the pandemic, overseas demand was weak. Employment was stable overall. Prices gauges remained high, indicating strong inflationary pressure."

Elsewhere

Japan labor cash earnings rose 0.7% yoy in August, versus expectation of 0.3% yoy. Household spending dropped -3.0% yoy, versus expectation of -1.5% yoy. Current account surplus narrowed to JPY 1.04T.

Germany trade surplus narrowed to EUR 13.0B in August, below expectation of EUR 15.7B.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.2527; (P) 1.2564; (R1) 1.2586; More...

USD/CAD's decline continues today and breaches 1.2492 support. Current decline is seen as the third leg of the pattern from 1.2947, and intraday bias stays on the downside for the moment. Overall, with 1.2421 support intact, rise from 1.2005 should still be in progress for another rise through 1.2947 at a later stage. On the upside, break of 1.2592 will turn bias back to the upside for 1.2773 resistance first. However, sustained break of 1.2421 will argue that larger rise from 1.2005 has completed and turn near term outlook bearish.

In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). It should have completed after hitting 1.2061 (2017 low) and 50% retracement of 0.9406 to 1.4689 at 1.2048. Sustained break of 38.2% retracement of 1.4667 to 1.2005 at 1.3022 will pave the way to 61.8% retracement at 1.3650 and above. Overall, medium term outlook remains neutral at worst with 1.2048/61 support zone intact.

Economic Indicators Update

Canada employment grew 157k, or 0.8% mom in September, well above expectation of 61.2k. Employment regained pre-pandemic level in February 2020. Jobs in services-producing sector surpassed pre-COVID level but was still down -3.2% in goods-producing sector. Unemployment rate dropped from 7.1% to 6.9%, matched expectations. Labor force participation rate was at 65.5, also matched pre-pandemic levels.

Full release here.

US non-farm payroll employment grew 194k only in September, well below expectation of 500k. Total employment is still down by -5.0m, or -3.3% from its pre-pandemic level in February 2020. Unemployment rate dropped notably from 5.2% to 4.8%, better than expectation of 5.1%. Labor force participation rate was little changed at 61.6%. Average hourly earnings rose 0.6% mom versus expectation of 0.5% mom.

Full release here.

EUR/JPY looks like there could be a bounce or break soon as the market is at the confluence zone.

The descending trend line is marking a possible move down as it sits at the 88.6 POC zone confluence. A rejection from the 129.41 should be targeting 128.78 while the break above is bullish and should be targeting 129.89. Today is the NFP and after the NFP it will take the momentum directional move.

The Canadian dollar is drifting on Friday ahead of the North American session. Currently, USD/CAD is trading at 1.2541, down 0.05% on the day. On Friday, both Canada and the US release key employment reports, so we could see some significant movement from the Canadian dollar later in the day.

All eyes are on the US nonfarm payrolls report. This event is always a potential market-mover, but this release has even more significance ahead of a Fed taper, with the timeline for such a move still unclear. Fed policymakers would be more prone to a taper in December or even November if there is solid data showing the recovery is on a strong footing, and a strong NFP would certainly meet the bill. The consensus for the NFP report stands at around 500 thousand new jobs.

A non-farm payroll report of 500 thousand or more would go a long way in convincing the Fed to commence a taper shortly and would likely boost the US dollar. If the NFP falls short of expectations, the Fed would have an excuse to delay tapering and that would likely result in a rotation out of US dollars. This should make for a busy North American session on the currency markets.

Canada releases employment numbers at the same time, and the forecast is mixed. In August, the economy created 95 thousand jobs, but that is expected to slow to about 60 thousand for September. Unemployment is forecast to drop to 6.9%, down from 7.1%. With the economy in some trouble (GDP has declined for four straight months), some positive job numbers would be warmly welcomed and could give the Canadian dollar a lift.

Solid Canadian employment numbers would be good news for the economy and would support the case to raise rates sooner rather than later. Like the Federal Reserve, the BoC will want to see solid data and ensure that the recovery is gathering steam before tightening policy.

USD/CAD Technical

• There is support at 1.2489. Below, there is support at 1.2385
• 1.2565 is a weak resistance line. This is followed by resistance at 1.2745