It's the 1st Friday of the month. That means payrolls!

Summary

• USDCAD: Dollar/CAD is teasing traders with an upside break through chart resistance in the 1.3370-80s this morning as some GBP selling leads broad USD strength during London trade today.  This is getting tempered back somewhat now as markets await the US and Canadian employment reports for March at 8:30amET.  The consensus for the US numbers are +180k jobs gained, +3.4% MoM growth in wages, and 3.8% on the unemployment rate.  For Canada, the estimate is just 1k jobs gained, +2.2% MoM growth in wages, and 5.8% on the unemployment rate.  Expect a continuation of the breakout to the upside should we get strong US and weak Canadian numbers, with the next meaningful chart resistance level coming in now at the 1.3460s.  Conversely, expect a swift reversal lower should we get weak US and strong Canadian numbers, along with bearish reversal pattern which could put the radar on the low 1.33s in short order.

• EURUSD: Euro/dollar continues to waffle around in the 1.1210-1.1240 range we talked about yesterday.  Expect strong US job growth/wage gains to challenge the lower bounds of this range and weak US job growth/wage gains to challenge the upside.  Dollar/yuan had a strong move lower after losing the 6.7120s in early London trade, but it has swiftly recovered back above the level now (which is mildly bearish EURUSD in our opinion and something to think about ahead of the US employment report).

• GBPUSD: Sterling is lagging this morning after Theresa May proposed a Brexit extension to June 30 in a letter to the EU’s Donald Tusk.  This comes after reports that Tusk was considering proposing a 12-month extension earlier today.  Pound traders are clearly not impressed with the shorter time frame proposed by May, and have continued to sell GBPUSD here ahead of the US employment report.  The EURGBP cross, which showed an impressive bounce higher yesterday, looks like it might struggle today with its own chart resistance in the 0.8590s.  Expect GBP to recoup its losses this morning should cross sales weigh and we get weaker than expected US job/wage growth for the month of March.  Chart resistance today resides in the 1.3140s, then the 1.3170s.  Support lies in the 1.3010s.

• AUDUSD: The Aussie hasn’t done much of anything over the last 24hrs of trade, but traders continue to hold a familiar downward sloping trend-line support level, which now resides just above the 0.7100 level.  We think a weak US employment report will finally give traders the enthusiasm to gun for the 0.7150-60s to the upside.  Stronger than expected US job or wage growth, however, may ruin the bullish momentum we saw after Australia reported stellar Retail Sales figures on Wednesday.  May copper prices are hugging support at the 2.90s again this morning, which is not great news for AUDUSD in our opinion.

• USDJPY: Dollar/yen has been attempting to grind higher as S&P futures traders continue to pursue an upside break of the 2886 level.  The market broke above chart resistance in the 111.60s during Asian trade last night and has survived one downside test of this level during London trade so far today.  We think the USDJPY technicals now allow for some meaningful upside should the US employment report beat expectations.

Tune in @EBCTradeDesk for more real-time market coverage.

Market Analysis Charts

USD/CAD Daily Chart

USD/CAD Hourly Chart

May Crude Oil Daily Chart

EUR/USD Daily Chart

EUR/USD Hourly Chart

USD/CNH Daily Chart

GBP/USD Daily Chart

GBP/USD Hourly Chart

EUR/GBP Daily Chart

AUD/USD Daily Chart

AUD/USD Hourly Chart

May Copper Daily Chart

USD/JPY Daily Chart

USD/JPY Hourly Chart

June S&P 500 Daily

Charts: TWS Workspace

About the Author

Erik Bregar - Director, FX Trading

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan? Contact Us or call CXI's trading desk directly at 1-833-572-8933.