Daily Analysis - Forex Currency Trading News 2012-02-02

The US stock market soared yesterday in spite of mix economic data. The ADP Non-Farm Employment Change data showed that the US economy created 170K new jobs in the previous month, comparing to 292K in the month before. Analysts expectations were a growth of 189K new jobs and this disappointing number might indicate for the official release on Friday. The ISM manufacturing PMI was also under the predictions, which is a negative signal for the activity of the manufacturing sector. Today's main news is the unemployment change data and Bernanke's testifies.
USD/CAD
The Canadian dollar joined the global trend of strengthening against the USD in the recent weeks. The pair broke a strong support of the triangle pattern in the daily chart at 1.01 and reached the strong support of the 20 SMA, which is the area of the psychological number 1.0. Traders like round numbers because they are easy to calculate and therefore many automatic orders are put around this level.  The current support should be strong enough for an up-correction, but as long as the stocks keep rising, the USD will probably lose points against the major currencies, including the CAD. A strong break-down of the 200 SMA might take the pair down to the next support at 0.975.

USD/JPY
The Yen broke the important support of 76.5 against the USD and it is moving downwards to the historical low at 75.5. However, those who are counting on another strengthening session of the Yen has to be aware to the possibility that the BOJ might interfere around such a low levels, as it did three months ago. The sophisticated players are aware of this scenario, which might makes them to cover their short positions and support the USD.

CAD/JPY
The fact that both CAD & JPY made bullish session against the USD is making it hard to determine the pair's trend. In fact, the pair has been moving in a channel between 74.75 and 76.5 for several months and last week it made a strong break-up of the upper boundary but got back to the channel when the Yen resumed strengthening.  However, there is a bullish reversal on the daily chart, and the CAD is trying to break-through the resistance at 76.5 again. If it succeeds, the buyers might lift the price to the next resistance at 78.0, but a break-down of yesterday's low might take it down to the lower boundary of the channel at 74.5.

Risk Disclosure

Trading and the execution of transactions in currencies, commodities,CFD  indexes and other financial products with or without using  high financial leverage, is speculative trading of high risk and may cause substantial gain or loss proportional to the size of the collateral, up to the total loss of the collateral sum in a very short period. The fluctuation of the prices and rates in the currency markets, commodities, CFD ,indexes and other  financial derivatives are often volatile and there is no accurate   forecasting as per the size of the change, its direction and the time frame in which it occurs.You must consider carefully and seriously if this type of financial activity fits your needs, your financial resources and personal circumstances. Since the risk of losing some of the invested funds or all the funds in a relative short period is high; it is recommended that you use for that purpose funds which you designated for speculative financial transactions of high risk.

 You acknowledge and fully understand that there may be more and other risks which are not detailed or not cotained above