Traders Should Keep Watch On Dollar, AUD and CAD as Event Risk Heats Up
Talking Points:

• The US Dollar stumbled this past session, leading traders to look for blood in the water as key event risk starts

• A dense round of Aussie event risk has motivated a AUD bullish break, but follow through will be a challenge

• Euro anticipation is palpable, but the CAD may be the more immediate mover on key data and heavy volume

USD/JPY

USD/JPY
USD/JPY Technical Analysis: Difficult To Be Bearish Above 122
S1 122.24 W R3 124.03 S
S2 122.00 M R2 123.74 M
S3 121.75 S R1 123.28 W


Yen is one of the most traded currencies in the world, especially due to its low interest rate since the Yen is used in carry trades. Recently the Bank of Japan has expanded their purchase of Yen, hoping to overturn the deflation tide to inflation. Doubling this money supply is devaluing the Yen, boosting exports; but, increasing prices of imports at the same time, especially for commodities.

USD/CAD
The US Dollar v/s the Canadian Dollar is a popular currency pair due to the large amount of cross-border trading activity that takes place between The United States and Canada. The Canadian Dollar is often called 'The Loonie' because of the picture depicting a loon on the Canadian $1 coin. The Canadian Dollar is often considered a




'Commodity Currency' due to the large deposits of natural resources, especially Oil that is mined and exported from Canada; particularly with their neighbor to the south.

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The EUR/USD's advance this past session says it all. Despite serious event risk ahead, the speculative ranks are baiting the water with counter trend moves. These jerks in establish moves draw the eye, but they should also draw our doubt. Can the Euro mount a meaningful recovery ahead of an ECB rate decision that is expected to result in more monetary policy accommodation? Is the Dollar going to tumble before a deep round of Fed commentary (the last wave before the pre-FOMC blackout) and Friday NFPs offers motivation? These markets are predisposed to volatility, but momentum and trend still require a focus that is unlikely without a clear fundamental drive. This conflict of volatility and conviction can shape trade potential. We

AUD/USD
AUD/USD
AUD Firm with Upbeat Stevens despite Profit Taking after Solid Q3 GDP
S1 0.7184 S R3 0.7378 S
S2 0.7128 S R2 0.7334 M
S3 0.7054 S R1 0.7253 W

The Aussie is a currency that has become a favored vehicle of traders in recent years. After a multi-decade commodity boom brought the Australian Dollar to all-time highs against the US Dollar, traders were often attracted by the interest rate differential in the pairing. This allowed traders to earn rollover for being long AUD/USD, while also benefitting from a massive bull run seen in the pair. Of recent, tides have appeared to




change as economic difficulties in China coupled with bear markets in metals and many commodities, have created a more opaque picture of the future of Australia's financial prospects.