May 4th 2016: Commodities Rebalance

• This morning, we’re seeing a continued examination of commodity currencies, led by the fresh decline in oil prices and knock-on selling in the likes of the USD/CAD.

• The dollar index is rallying for the second straight day ahead of US ADP payroll data.

• While commodities are generally lower, the Australian dollar is enjoying a rebound after yesterday’s heavy selling.

• Yen pairs are generally on the rise, following a volatile session yesterday on the USD/JPY.

• Across the remaining major dollar pairs, the EUR/USD and GBP/USD are stable after large intra-session reversal yesterday.

• Coming up today we have UK construction PMI at 09.30.
• This is followed by German Buba president Weidmann speaking at 11.15.
• Following this, we have ADP non-farm employment change at 13.15.
• Following this, we have Canadian trade balance, US preliminary non-farm productivity, labor costs and trade balance data all at 13.30.
• At 15.00, we get ISM non-manufacturing PMI, alongside factory orders.
• Finally at 15.30, we get crude oil inventories.

Trade Idea: 

• The EUR/USD saw a heavy reversal yesterday, but the bullish trend remains so far uninterrupted.

• There could be further upside from here and a good way to play this is a HIGHER trade predicting that the EUR/USD will close above 1.155 in 21 days for a potential return of 145%.

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