A1 Trading

Setups on PMI, NFP and Interest Rates

March 4, 2024
Frank Cabibi

Key news events come out this week for the US, Canada and Europe as we get close to seeing what is going on in the US economy and where interest rates may end up this year around the world. Our focus today is going to be covering all the factors - including NFP - that could change investor outlook on the dollar as well as in Europe and Canada.

EdgeFinder Analysis

UJ is a +6 bullish score on the EdgeFinder going into a pivotal economic news week. The reason why this week is important is because of NFP on Friday. Although every Non-Farm Payroll event is important, this one matters a lot more to investors and the rest of the year's outlook.

Recently, we have been watching inflation and output data in the US. So far, CPI rates have been stubborn and GDP is halted this year. If the major labor statistic comes down this month, this could cause optimism to fall apart, not just for the indices, but for the dollar as well.

Gold shoots higher towards the $2,100 level on the fears of stagflation occurring. Unlike the indices and the dollar, gold tends to do well in this kind of situation. Gold bulls would want to see a continuation of slower economic growth, so a miss in NFP would likely be bullish for the metal.

Price is near the historical highs which is around $2,148 and currently breaking a recent high in the $2,080s. The metal is overextended to the upside, but there has yet to be a sign for a pullback in price. The new level of support should gold pull back is around $2,060.

EURCAD is a perfect neutral score meaning direction can go either way. The factors holding this pair at 0 are due to the fact that sentiment is pointing more in favor of the euro, but economic and inflation data favor CAD.

There is a constant debate as to which country will be the first to cut rates. It seems that Europe and Canada are neck and neck in probability. This week, both banks will report the latest interest rate, but it seems that rates are staying where they are for now.

Retail Spotlight

Retail is now short indices, UJ, USDCAD, gold and bitcoin. This leads to a bullish contrarian signal as most retail traders are directionally wrong most of the time. On the flip side, USDCHF, AUDUSD and NZDUSD are the top long positions from the crowd. Thus, these three pairs get a bearish contrarian signal.

Smart Money Spotlight

Not a whole lot of change to the long side as our highest net change was +3.22% in New Zealand's kiwi. Oil is still getting bought by institutions however. NAS100 tech stock index was heavily sold at over 5% change to the short side on the week.

Fundamental Spotlight

When comparing inflation rates with each other, we can see that both countries saw a decrease in the overall inflation rate. Canada fell by a larger margin, however. Interest will probably remain steady until 2% inflation is reached. EUR and CAD are very close.

The EdgeFinder

All-in-one Fundamental Dashboard

30 Days Access

Free Telegram

Join for daily analysis and trade setups!

Join Telegram

DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here

A1 Trading Company

A1 Trading is a leading financial analysis and trading education company dedicated to empowering traders of all levels. Our team combines extensive market knowledge with cutting-edge technology to provide valuable insights and tools for traders worldwide.
2024 All Rights Reserved | A1 Trading Company
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram