Trading plan for 05/05/2017:
The commodity market sell-off pushed commodity currencies and equity markets in Asia down. The Dollar loses slightly against major currencies, and the market is waiting for a report on the US labor market. Crude oil is losing 3% today, down to $45 per barrel, which is almost 5% fall from Thursday. Sentiment on the crude oil market affects other commodities as well as the currencies related to them. Under pressure are CAD, NOK, AUD, NZD, and RUB. The USD/CAD pair at 1.3790 was the highest for 14 months, AUD/USD at 0.7370 was a 4-month low.
On Friday 5th of May, the main event of the day is Non-Farm Payrolls data from the US and Unemployment Change data release from Canada. Later on the day, global investors will pay attention to the speech of Federal Reserve Chairperson Janet Yellen.
EUR/USD analysis for 05/05/2017:
The Non-Farm Payrolls data are scheduled for release at 12:30 pm GMT and market participant expect another good figure after last month decrease to 98k only. This month the expected number is at the level of 198k, but any score above 200k will make the Dollar even stronger across the board. The Unemployment Rate is expected to increase from 4.5% to 4.6%, so again no change in the rate will be another reason to appreciate the Dollar. One of the most important sub-indices will be Average Hourly Earnings, which are expected to increase a little from 0.2% to 0.3% on a monthly basis. It is worth keeping an eye on this part of the Payrolls data, because even a good NFP reading might get overshadowed by poor earnings data.
Let's now take a look at the EUR/USD technical picture on the H4 time frame. The bulls have managed to break out from the triangle and the price violated the technical resistance at the level of 1.0950 and made a new high at the level of 1.0989. Nevertheless, the momentum is clearly decreasing on this timeframe and the stochastic oscillator is indicating a bearish divergence, so a good score from NFP should cause a pretty deep correction, possibly event covering the weekend gap between the levels of 1.0730 - 1.0820.
USD/CAD analysis for 05/05/2017:
The Unemployment Rate data are scheduled for release at 12:30 pm GMT and market participants expect no change in the number of jobless people at the level of 6.7%. The Employment Change data are expected to increase slightly from 19.4k to 20.0k on a monthly basis. Market participants expect a steady data from Canada, so any surprise here might result in Canadian Dollar sell-off.
Let's take a look at the USD/CAD technical picture on the H4 timeframe. Due to the sell-off in Crude Oil the market is trading at the highest level in months, just below 61%Fibo of the bigger time frame swing down. The target for bulls is still at the level of 1.3826, but if the data are significantly worse than expected, then the bears might make the first step to take control over this market for a corrective sell-off. The next technical supports are seen at the levels of 1.3757 and 1.3678.
