Early today in the Asian session, a number of Japanese economic data continued to stream in. despite being mixed, they remain supportive of the Yen. In fact most economists see the Yen averaging 108 by the end of the year against the USD. As you might have read, the USD index to 98.05 after GOP failed to pass the AHCA Bill. It has since floated higher. On the other hand manufacturing in Japan is trending higher and with better figure especially from big time manufacturers, the economy is recovering though the stronger Yen will definitely wipe out some profits and make exports expensive. Aggregated comments from US FED officials appear to be piling pressure on the Greenback. Dudley, a renowned dove, for example said that the US has no rush to hike interest rates and that they will be unloading some of their bond holdings this year. In light of recent US economic data, w can only say the economy is recovering well but not fast enough. Consumer expenditure is not that rapid and almost stalled last month but this week’s NFP can be a shot in the arm for the USD. If numbers come in higher than expected, the Greenback will rally and the vice versa will happen if jobs stall or numbers come in lower than expected.
Today I will look to trade the AUDCAD and with the bear trend taking its course, I will jump in and buy the CAD at any sight of AUD appreciation. The OBV indicates the number of shorts is increasing while the stochastics are in full gear bear. You can notice how %k and %D are widening. Break below the support trend line on 23.03.2017 meant the bears took control. There was a slight AUD appreciation then it tumbled with the 20 day moving average acting as resistance. The weekly chart is very bearish and you can see that sell signal which has been printed by the stochastics.
Today trade as follows:
Stop Loss: 1.0190-above today’s highs
Take Profit: 1:4 risk reward ration, or till a buy signal forms in the daily chart
Watch out for US manufacturing data later in the NY session.
Have a good trading day.