At the moment, I’m inclined to think that every high the Kiwi makes is a perfect selling opportunity. I stand to be corrected but the continued talk of monetary policy normalization and a turnaround from the ultra low interest rates picking up should be pro-USD. As a matter of fact, FED president George refuted claims that the lower GDP data recorded in the Q1 should be a deterrent and pour cold water on talks of another rate hike in June. According to him, there is no reason at all to pause or decelerate from the gradual rate hike as delaying it will further slow economic expansion. From NFP data last week and yesterday’s JOLTS job opening, it is obvious that the economy is creating enough jobs and the good thing is people are changing jobs and creating some sort of participation demand as their positions are filled. This will definitely help push unemployment rate lower towards the ideal full employment. Despite these stellar reports, consumer spending should rise to fully cement any idea or probability of a rate hike next month. So far, a possible 0.25% rate hike is placed at 100% according to future fund rate trackers.
From a technical perspective, the monthly chart points to better chances of profiting if you sell. The stochastics are strongly bearing and since this pair topped up in February, it has been declining ever since. Last month, the monthly candlestick closed as a bear and if you noticed, it breached and closed below the 20-period moving average.
I will try to scalp this pair today taking sells only in the 30 min chart with a 1:2 risk reward ratio keeping in mind the low Average daily range. This should be as follows:
Sell Range: 0.6905-0.6915
Stop Loss: 0.6930
Take Profit: 0.6850-0.6870 depending on your selling point.
If you trading the EURCAD according to yesterday’s recommendation, then today is important since Draghi speaks at NY open and then later we have Crude Oil inventories at 16:00 London Time. Watch out for both events.
Have a good trading day.