Will the employment report signal a change in direction? All eyes are on the Canadian dollar.

Will the employment report signal a change in direction? All eyes are on the Canadian dollar’s trajectory.

07.02.2025

In the U.S. currency market yesterday, the Canadian dollar fell against the yen ahead of today’s employment report. The CAD/JPY pair dropped from 106.681 to 105.645. It continued to decline as the 20-period moving average on the hourly chart capped its upside.On the 4-hour chart, candlesticks have fallen to the -2σ level of the Bollinger Bands, while on the daily chart, the RSI continues to hover around 35. We will be watching closely to see if the Canadian dollar recovers depending on the results of the employment report.

Among European currencies, the euro fell against the yen for the second consecutive day.The euro/yen pair fell from 158.834 to 157.050. A downtrend along the 10-period moving average (MA) on the hourly chart has been confirmed. On the 4-hour chart, the RSI has dropped to just below 30, a level indicating oversold conditions. Similar price action is also being observed on the daily chart. We will need to monitor the direction closely to see if the euro will continue to weaken against the yen.

Today, at 8:30, Japan’s All-Household Household Expenditure Survey; at 13:00, Malaysia’s Industrial Production; at 13:30, India’s central bank policy rate and statement; at 14:00, Japan’s Economic Sentiment Index; at 16:00, Germany’sIndustrial Production and Trade Balance at 16:00, France’s Current Account and Trade Balance at 16:45, Taiwan’s Consumer Price Index at 17:00, Mexico’s Consumer Price Index at 21:00, U.S. and Canadian Employment Reports at 22:30,at 23:25, remarks by Fed Governor Bowman; at 24:00, U.S. wholesale inventories and the University of Michigan Consumer Sentiment Index. We will be closely watching the Canadian dollar to see if the employment report brings about a change in market direction.