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Market Update
Follow through has proved limited (on both sides) across markets following the US jobs report beat.
- US bond yields are off the highs (10 year last 4.172%)
- USD still bid and up on the day but off its highs… USDJPY an exception but staying above its 152.80 low
- USDCAD is closest to its high as talk Trump considering canceling USMCA weighing on the CAD (although it would take Congressional approval to break a treaty)
- US stocks have backed off earlier highs, putting NAS100 focus back on 24800-25000 and US500 back on 6900
- XAUUSD extended its high above 5100 before retreating back into its range.
- Partial government shutdown remains a risk as deadline nears
CAD slips (USDCAD up) on this headline. As always with President Trump, actions speak louder than words or headlines
(Right click on any image (or chart) to open a full screen in a new tab)
CAD slips (USDCAD up) on this headline. As always with President Trump, actions speak louder than words or headlines
(Right click on any image (or chart) to open a full screen in a new tab)
Forex Market Snapshot
The forex market continues to struggle to find a common theme to drive trading in the new year. This has seen it struggle to build serious momentum as trading remains choppy.
With that said ranges have been tight so far today with
- EURUSD holding below 1.1650
- USDJPY holding above 158 as it consolidates after trading lower yesterday
- GBPUSD showed little reaction to a positive GDP report
- AUDUSD a touch firmer as US stocks are up aa geopolitical tensions with Iran ease a bit.
- USDCAD is a touch firmer as crude oil prices slip back on easing imminent US threat to attak Iran
- US Weekly Jobless Claims highlight a light calendar
Of all markets, forex algos seem to live to run stops
With the USD trading generally firmer, let’s take a look at its highs for the week as breaks would be needed to run potential stops. Otherwise, expect more chop awaiting Friday’s key events.
- EURUSD 1.1659
- USDJPY 157.30
- GBPUSD 1.3414
- USDCAD 1.3888 (new high set yesterday and extended today)
- AUDUSD 6670
- NZDUSD .5741 (retested today, no stops)
Market Update
Forex: Choppy day as an ISM Services PMI beat was offset by a JOLTS miss. Pivotal levels patterns to watch as the USD tries to catch a bid.
- EURUSD 1.17 (3 days in a row)
- GBPUSD 1.35 (4 days in a row)
- USDCAD 1.38 (CAD a 2026 underperformer)
- USDJPY 157 (former resistance)
US Stocks: Maintaining a firm tone with a brief dip on the ISM Services report met with buying. NAS100 trying to play catchup while US500 is currently back into record high territory =(scroll typo see earlier updates with charts).
XAUUSD: Quick retreat from 4500 has cooled momentum but only sub-4400 would suggest a failure to go after the record 4549 high.
BTCUSD: Disappointing by not benefiting from a risk on mood and dependent on 90K holding to contain the downside
USDCAD UPDATE
- An outperformer (CAD underperforming) so far this year with the pair extending its 2026 high, but so far with limited follow through.
- This leaves 1.38 as the obvious pivotal and bias setting level although only back below 1.3745-55 support would deflect the focus from it.
- Resistance: Intra-day high at 1.,3827 blocks exposing 1.3871.
- It’s early in the day but currently a red candle after 6 consecutive daily (up) green candles.
- Note, one weight on the CAD may the prospect of Venezuela heavy oil on the market in competition with a similar grade produced in Canada.
USDCAD DAILY CHART
The Power of “50” Level is playing out in various places
EURUSD 1.1750
GBPUSD 1.3450
USDCAD 1.3750
AUDUSD 6650
US500 6850
NAS100 25500My Favorite Trading Secret: The Power of the “50” Level
USDJPY UPDATE
- Once again it is the reaction to news that matters along with buy the rumor, sell the fact reaction that has sent USDJPY sharply higher.
- Looking at the chart, the level the MoF/BoJ do not want to see broken is 157.88 as it would open the door for 158 and a void above it. Of course, this assumes they are not happy with the JPY’s direction but in any case, will be concerned over the pace of the move.
- On the downside, 156.94 needs to hold to keep the strong bid. Fallback support is 155.98-156.16.
USDCAD DAILY CHART
USDCAD UPDATE
- USDCAD continues its downtrend that started with last week’s jobs report.
- A failure to hold above 1.3860 following the BoC rate decision along with general USD weakness has seen 1.38 broken.
- If 1.3800 becomes resistance there is a clean path to 1.3715, the target following the breakl of 1.3888
- Back above 1.38 would cool but not negate the risk.
USDCAD DAILY CHART
BoC stays on hold as expected… USDCAD ticks up but limited move .. watch 1.3860 as pivotal (scroll down to see USDCAD update and chart)
(Right click on image to open a full screen in a new tab)
USDCAD UPDATE
- Market on hold waiting for the BoC (unchanged expected) rate decision
- 2 levels stand out: 1.3800 and 1.3860
- Of the two, 1.3800 is most important as there is little below it until 1.3715. 1.3823 stands in the way of 1.3800.
- On the upside, to build momentum off the low, 1.3823 needs to hold followed by a 1.3869 break. However, key levels are not until above 1.3950 so it would take a surprise to see it challenged.
USDCAD 4 HOUR CHART
Forex Market Snapshot
- How markets end the day will be more important than how it starts out or even the initial reaction to the FOMC decision.
- The dollar not surprisingly remains in a wait and see mode.
- EURUSD has extended its trade around 1.1650 to 6 days in a row, suggesting this level will be pivotal in setting the overall dollar tone post-FOMC.
- USDJPY, the focus of FX trading this week, has settled into a range within 156.50-157.00 with support while the lower end holds.
- USDCAD is consolidating around 1.3850 ahead of today’s BoC (expected no change) rate decision.
- US bonds remain a focus and bears watching with the 10-year yield rising above 4,20%
Big beat CDA jobs (mainly part-time)… big drop in jobless rate… USDCAD falls
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