The US jobs report last Friday was typical of what we have come to expect from the monthly NFP announcement. Expectations for an increase in the labor rate were much more generous than the actual report. Initially the markets sold off the Greenback until common sense prevailed later in the session and all was reversed.
A strong jobs report would most definitely have convinced the market of a rate increase coming as early as November. An interest rate increase by December is very much in the cards, and most certainly with the USA presidential elections in the rear view mirror by then.
It looks very likely that the year will end with at least a .25 basis point increase. As of now the US Dollar Index (DXY) looks to breach the 97.11 high of the year and far beyond.
The Trump Affect
As we know all too well, the markets DO NO LIKE CHANGE and with Hillary Clinton leading in the polls at present, no change to the current status quo is expected. As we all know too well from Brexit just a few months ago – the polls at the time were so wrong.
Personally, I have a sneaky suspicion with all that’s happening in our volatile world these days, the USA may be in for a shock also. The most ardent of scholars said Donald Trump would be over and done within weeks of starting his campaign; up until now they have been so wrong. it’s laughable. So let’s wait and see – the next few weeks sure will be interesting.
Loonie Rallies On Oil
The Canadian Loonie found some strong support early Monday as oil prices made a new high for 2016. Russia announced it was willing to partake in an oil production freeze to try bolster prices and keep them there. For the first time in years it looks like the oil producers are on the same page. However, to look for cohesion between the Energy producers with any degree of longevity is far fetched in my opinion. I just can’t see that holding for too long. On the other hand, the market wants to believe it and this is evident in the Usd/Cad staging a nice rally later in the session Monday.
Cable Catches Traders Sleeping
It’s been another one of those months so far with so many different events influencing Forex direction. Of course, most traders were caught off-guard last week during the “flash crash”, as the Cable (Gbp) had the bottom fall out it in less than a few minutes only to make a partial recovery. I can just imagine Stop and Limit orders were opened and closed before most traders knew what had hit them. It was in the middle of the night in the UK, so traders either woke up with accounts doubled or margined out.
Trade The Trend
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