This trading week started like the previous one ended: very slow. The EURUSD was trading in a tight range for the whole week, until Friday when the NFP number was released.
Even though the actual number was missing the expectations, the U.S. dollar was bought across the dashboard. It was not a strong move, but a concerted one.
So far this week ranges continue to dominate trading. To put things in perspective, imagine that today the EURUSD pair moved in a less than thirty pips range.
With no important economic events ahead of us, chances are that these conditions will persist as Easter comes next weekend. Traditionally, liquidity is missing ahead of the Easter weekend.
Nevertheless, from a technical point of view, the USD is bid. Not against all currencies, but bid. The USDJPY is not acting in a normal fashion as the JPY is being bought for its safe haven status.
In other words, if the EURUSD and USDCHF reacted normally on the NFP release, the USDJPY pair already gave back all those gains. Moving forward, expect the same trend to continue ahead of the weekend.
There are two important events to watch: one from Canada and the other one from the United States. Bank of Canada is releasing its monetary policy this week and the USDCAD pair is hovering around 1.33.
It is expected that the central bank will leave rates unchanged, but the forward guiding message is more important. I’m favoring buying any dips on the USDCAD pair for a move into the 1.36 area.
Friday will see the CPI (Consumer Price Index) in the United States being released. While the expected number is 0.2%, upside surprises may appear.
European commercial banks will have a short week due to upcoming holidays and liquidity is likely to stay low. For Forex traders, this is a tricky environment, as it leads to overtrading the account.