Forex Week in Review: October 5, 2018

October 05, 2018 13:00

In a week that was slow in strong economic events we have had limited movements on some currency pairs. However, there is still plenty of movement in the USD, which has created many opportunities for the astute trader. As per usual, the Forex market is very volatile, offering great trading opportunities in every major session.

Scroll down to read the major moves this week and potential trading opportunities that are based on sentiment, technical and fundamental research.

USD/CAD

Having negotiated intensively for a couple of months, both US and Canadian officials finally came out a with the US-Mexico-Canada trade agreement (USMCA), which paves the way for opens the door trade between the US, Canada and Mexico.

In order to reach the deal, the US and Canada offered concessions Canada's auto sector to shield it from US tariffs, which is highly dependent on cross-border movements. In return, US farmers will be granted increased access to Canada's dairy market, which has been highly protected. The deal will probably be signed in November, but before that it must be ratified by the legislature of all three countries. The provisions of the USMCA are not expected to go into effect before 2020.

The agreement effectively boosted the Canadian Dollar, where the USD/CAD currency pair made a runaway gap towards the S2 Admiral Pivot. After the correction, we might also expect bearish continuation.

Source: USD/CAD Admiral Markets MT5 with MT5SE Add-on - Accessed: 05.10.2018 12:20 AM

USD/CHF

The USD/CHF currency pair has had a big bullish surge boosted by the hawkish FED and US-Mexican trade agreement.

Source: USD/CHF Admiral Markets MT5 with MT5SE Add-on - Accessed: 05.10.2018 12:40 AM

Due to a negative correlation, the bullish windfall in the USD/CHF actually created a bearish avalanche in the EUR/USD. After today's NFP report, we should see the next move both in the USD/CHF and EUR/USD.

Source: EUR/USD Admiral Markets MT5 with MT5SE Add-on - Accessed: 05.10.2018 12:50 AM

NZD/USD

The USD strength lead to a 170 pip downmove on the NZD/USD currency pair - the popular "Kiwi". The price action hasn't been a surprise and we can clearly see how the price dropped from the Admiral Pivot Point towards the weekly S3 support and S1 daily support. Further weakness is expected as long as the USD remains strong.

Source: NZD/USD Admiral Markets MT5 with MT5SE Add-on - Accessed: 05.10.2018 13:01 AM

For next week everything will depend on the NFP, Average Hourly Earnings and Unemployment Claims data.

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

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