It’s NFP Friday!
How is the dollar doing leading up to the event and what market moves might come up soon?
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/USD ahead of the U.S. ADP employment report. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Challenger job cuts showed 20.2% year-over-year decline in employment for December vs. earlier 40.8% slump
ADP Dec non-farm employment change came in stronger than expected at 165K vs. 120K estimate and 101K previous
S&P Global U.S. Services final PMI in December at 51.4 (upgraded from initially reported 51.3 figure) vs. 50.8 in November
U.S. initial jobless claims for week ending on Dec. 30 turned out better than consensus at 202K vs. 217K forecast and 220K previous
EIA crude oil inventories down by 5.5M barrels vs. estimated 3.2M decline and earlier 7.1M drop
Japanese consumer confidence index up from 36.1 to 37.2 vs. 36.4 forecast in December
Price Action News
Overlay of USD vs. Major Currencies Chart by TradingView
Dollar bulls seem eager to place bets ahead of today’s U.S. non-farm payrolls report, especially since the FOMC minutes released earlier this week hinted that policymakers are inclined to keep rates “higher for longer.”
The U.S. currency has been on a slow climb in the Asian trading session, taking a strong lead against the Japanese yen and the commodity currencies. Leading jobs indicators such as the ADP non-farm employment change are hinting at a potentially strong official jobs report.
Not even stronger than expected Japanese consumer confidence data was enough to keep the yen propped up, as market watchers are already looking ahead to the BOJ standing pat in their next policy statement.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. non-farm payrolls report at 1:30 pm GMT
Canadian employment change report at 1:30 pm GMT
Canada’s Ivey PMI at 3:00 pm GMT
U.S. ISM services PMI at 3:00 pm GMT
U.S. factory orders at 3:00 pm GMT
FOMC member Barkin’s speech at 6:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
EUR/USD: 15-min
EUR/USD 15-min Forex Chart by TradingView
So far this week EUR/USD seems to be pulling up from a previous dive, as it formed an inverted head and shoulders on the short-term chart.
Price is still completing the formation and might be about to test the neckline resistance near R1 (1.0973) soon, with a break higher potentially spurring a rally of the same height as the reversal pattern.Additional upside roadblocks can be found at R2 (1.1002) near a major psychological mark and R3 (1.1031).
A tiny symmetrical triangle pattern can also be seen, and a break below the pivot point level (1.0944) could open the possibility of a move to the downside targets at S1 (1.0915) then S2 (1.0885).
Dollar traders are likely to hold out for the outcome of the NFP report, as well as underlying data such as the labor force participation rate and average hourly earnings, to gauge if Fed rate cut bets can increase.
