Here are the key factors to keep in mind today for US Dollar trades:
- ADP Employment Change: On Friday forex traders will get the NFP report for February which could test the resilience of traders and today can be a first good look at what to expect from Friday’s report. The release of the ADP report is expected to show the addition of 219,000 jobs in the private sector for February. Should this be confirmed a NFP reading above 200,000 is very likely. Forex traders can compare this with January’s ADP report which showed the addition of 213,000 jobs. Forex traders should also account for net revisions to the previous two months and add or subtract that figure from today’s release.
- Markit Services PMI: The final look at the Markit Services PMI for February is expected to confirm the 57.0 which was initially reported. Any downward revision could translate into US Dollar weakness which given the outcome of other expected reports on the US economy today may accelerate any sell-off.
- ISM Non-Manufacturing Composite Index: The US service sector, which accounts for two-thirds of all economic activity in the US, is expected to show a minor slowdown in February. ISM Non-Manufacturing Composite Index is called down to 56.5 in February from the 56.7 reported in January. Any slide bigger than expected is very likely to send the US Dollar sharply lower during the trading session.
Here is the key factor to keep in mind today for Canadian Dollar trades:
- Bank of Canada Interest Rate Decision: The Bank of Canada is expected to keep interest rates unchanged at 0.75% after shocking forex traders with a surprise interest rate cut during their last meeting in January when expectations called for no change. The Bank of Canada slashed interest rates from 1.00% to 0.75% which send the Canadian Dollar lower. No change its expected today, but the statement released will be important and is expected to move the Canadian currency.
Should price action for the USDCAD remain inside the 1.2480 to 1.2520 zone or breakout above it the following trade set-up is recommended:
- Timeframe: H1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.2500
- Take Profit Zone: 1.2650 – 1.2680
- Stop Loss Level: 1.2400
Should price action for the USDCAD breakdown above 1.2480 the following trade set-up is recommended:
- Timeframe: H1
- Recommendation: Short Position
- Entry Level: Long Position @ 1.2450
- Take Profit Zone: 1.2350 – 1.2400
- Stop Loss Level: 1.2520
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