EUR/USD, USD/CAD and GBP/USD Forecasts – Weak 54K NFP Sparks Short-Lived Dollar Drop

EUR/USD Technical Analysis

The Euro has rallied quite nicely during the trading session on Thursday after the jobs report came out with 54,000 added last month instead of the expected 114,000. That being said, we are already giving back some of the gains, and I think the 1.15 level causes some issues.

Friday could be a bit noisy, but keep in mind the Americans are not there, and I think really this is a situation where you are likely to find some type of exhaustion to start shorting. I think there is still a big problem when it comes to interest rate differential and US dollar shortages around the world. I will let this thing bounce, and I will take advantage of cheap US dollars.

USD/CAD Technical Analysis

The US dollar fell against the Canadian dollar right away, but it is already starting to turn things around, and again, I think this is a situation where it offers you a potential trade. I like the idea of buying the dollar against the Canadian dollar, and it looks like the market is okay with that, too. If we do break out to the upside, the 1.43 level gets targeted, followed by the 1.45 level.

GBP/USD Technical Analysis

The British pound has screamed higher, and this is an outlier currency. That is because the interest rate differential is almost nonexistent, and it is slightly in favor of the pound after all. We are testing the 200-day EMA. We are pulling back a bit from there.

But I think if the US dollar starts to fall in other markets, this is where you want to be. You want to be a buyer of the pound, as demonstrated during the session so far. Signs of exhaustion here, I probably will not short the pound. I will probably short the euro and the Canadian dollar, and maybe the Japanese yen, but I probably will not short this pair. I look at this as a great indicator.

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