Those stop-driven rallies are often difficult to sustain and today’s trading illustrates it. The breakout in USD/CAD sparked stops elsewhere and caught the market off guard and led to a broader dollar rally. One of the reasons the dollar bulls were hesitant was because of the buys data calendar for the rest of the week.
Tomorrow is the ADP employment report and the Dec 18 FOMC minutes. On Thursday it’s initial jobless claims and Friday is non-farm payrolls. Because of the sour weather in December during the survey week, Citi is forecasting NFP at 125K, well below the 195K consensus and those kinds of calls make the bulls in a crowded USD trade nervous.