Big news came out today that will be setting the stage for next week for major pairs. The market heatmap shows unusually high swings for multiple pairs after NFP and interest rate news for the US, Canada and Australia. Here are some of the best trade setups we see on these currencies right now that could carry over for the next several sessions.
The US and Canada released jobs data this Friday, and the numbers were unexpected. Canada saw 43,000 jobs lost in June but also saw a fall in unemployment. Whereas in the US, NFP beat expectations by 112,000 jobs added while the unemployment rate remained where it was.
What we might be able to interpret from today's job data is that Canada is experiencing better employment despite the drop in jobs in June. In the US's case, June's numbers beat the forecast but still came in lower than May's report.
Ever since March, US job change has decreased to lower and lower levels which could be suggesting a slowdown in the economy. Depending on solely these events, Canada's economy looks to be in better shape. In fact, unemployment in Canada reached a record low.
This means that Canada's central banks may feel more comfortable raising rates to cap inflation. It also means that the US central bank could be raising interest too aggressively and may suggest a slowdown. However, Powell has already stated that he and the Fed have an "unconditional obligation to fighting inflation" in the latest FOMC statements.
So, to sum things up, US and Canada are still likely to keep raising interest rates to lower borrowing costs and making their currency stronger.
Australia's Interest Rate
Australia decided to raise rates as expected. The RBA punched it higher to 1.35% from 0.85%. The country's economy has been showing improvement since October. If that trend continues, Australia's bank may feel encouraged to keep hiking as planned.
With this in mind, AUD, USD and CAD may all be buys next week.
Pairs To Trade
UJ attempted to break resistance twice at a double top. If price comes down to the rising trend line on the 4H timeframe, it may find strong enough support to bounce up from and retest the highs. However, a break lower could take price down to the 134s.
Aussie-Swiss is already moving up quickly, but price has reached resistance on the 4H. A test on this level could cause a retracement or a break to the upside. Either way, this could be a good entry to look for because a move higher could lead to testing support around the 0.68400s.
This pair has already taken heavy falls in the last month, but further downside may continue on a weaker euro. Price is consolidating right now, and the pair could be ready for a move soon. If price moves higher, there's a couple levels of resistance that could serve as reliable short setups. 1.32471, 1.32948 and 1.33868 respectively.
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