The Week Ahead: One Last Job
US jobs data and major rate decisions are likely to stir up volatility this week
USDCAD Hangs on BoC, NFP
The pair will be under the spotlight as major data come in from both sides. The Bank of Canada is expected to leave the interest rates unchanged. However, optimistic guidance could give the Canadian dollar firm support. The US dollar will see heightened volatility as the November NFP report kicks in. Positive figures may give the greenback a temporary boost, though we expect strong resistance on the upside. The pair’s month-long recovery has reached the October high of 1.3350 where selling pressures start to pile up. 1.3200 will be a critical support to keep the price afloat.
AUDUSD Could Slide Below 67c.
The Aussie could be one of the best market movers at the start of the week; RBA’s rate decision and GDP figures are expected on Tuesday and Wednesday, respectively. While Governor Philip Lowe has said cuts are “not on the agenda”, speculations of QE next year could keep the currency under pressure.
The following GDP figure may come in as a confirmation should it read below expectations. AUDUSD is sliding towards the daily support of 0.6730 at the time of writing – a failure to rebound may lead to further sell-off below 0.6700.
Dow Jones (US 30) Momentum Slows Down
Global equities came to a halt after President Trump signed two bills in support of Hong Kong protests last week. Fears grow that China may retaliate and shatter hopes of an agreement before a new round of US tariffs come into force on December 15. Another escalation in the US-China trade war would seriously dent markets’ optimism and prompt large pullbacks across exchanges. The Dow Jones could see a slowdown in its momentum and test the moving averages around 27700.
Crude Oil (WTI) Traders Eye OPEC Meeting
The plunge on Black Friday came as a combination of uncertainties on both supply and demand. OPEC members will discuss on Thursday and Friday whether to extend current production cuts. However, Russia’s unwillingness to follow suit would dent the organization’s effort to curb supply and could trigger more sell-offs.
Meanwhile, renewed trade tension between China and the US is likely to put a cap on the oil price. 54.90 is the key support to maintain the recovery, failing that the price could pull back to the October lows near 52.