Most of the FX market’s fears, such as trade wars, Chinese growth, and the Brexit, have seemed to disappear over the last two days resulting in a big rally of currencies associated with the "risk on" environment. The Aussie and Kiwi dollars are known as commodity currencies and were the best performers yesterday. Both currencies were behind the US dollar retracement, which at one point of yesterday’s session fell by over 1% compared with October's high of 97.20.
Trade tensions are thawing with Trump asking the cabinet to draft a possible trade deal with China. The push for a potential deal with China was prompted by the president’s telephone call with Xi on Thursday, according to Bloomberg. Furthermore, Trump had already ignited this trendy news when he tweeted that he and President Xi had a long conversation with heavy emphasis on trade and discussions “moving along nicely.” President Xi followed up with some conciliatory remarks that he was willing to meet Trump at the G20 and that he and Trump wish to expand China-US trade cooperation.
On the release side, the change in non-farm payrolls in October was 250K above expectations of 200K. This has boosted the US dollar index from an intraday low today of 95.99 to 96.32 at this moment. The unemployment rate in October was in line with expectation at 3.7%.
The technical levels to consider for today in the US dollar index are 96.00 on the downside and 96.40 on the upside. Also, the technical levels to think in the USD/CAD are 1.3012 on the downside and 1.3140 on the upside.