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Dollar Consolidation Continues

USD/JPY

Yesterday's ADP figures were lower than expected but the Unemployment claims beat the expectations with a good decline in the claims. Today's mover will be the NFP release and the price has already factored in the Dollar Yen. Technically, the pair is in a minor descending channel with immediate support at the 23.6% fib at 114.86. A break below this will quickly suppress the momentum towards 112 or the 38.2% fib. Keeping this technical analysis in mind and at the back of the ADP report, we forecast that today's NFP may be lower than expectation. If it is in line with our forecast then one of these support levels will be met, else the opposite will be true. USD/JPY will break above this minor descending channel. We have liquidated yesterday's long order in USD/JPY with a profit and looking for lower levels to go long again.

USD/CAD

Dollar CAD is currently supported by the lower ascending channel, while the bearish momentum seems to be strong. Today's headline figures on the CAD will decide the move on this pair. We anticipate for a stronger number from CAD while USD figures may not be promising. Again, this analysis is completely based on our observations and may be wrong as well. But in our view we are looking for a decline towards the 200 DMA, about 200 pips from the current level. We are eager to sell this pair, but don't want to be pushed into a trade while the markets are expected to be volatile.

We always have a chance to buy the Dollar lower.

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