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The NFP report is only a few hours away! Here’s a setup to consider if you’re trading the report today.

Currency Snapshot:

Major Pairs Performance from MarketMilk
Major Pairs Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Switzerland’s unemployment rate at 6:45 am GMT
  • France’s industrial production at 7:45 am GMT
  • Italy’s industrial production at 9:00 am GMT
  • Canada’s labor market numbers at 1:30 am GMT
  • U.S. NFP report at 1:30 pm GMT. Read our quick trading guide if you’re trading the event!

What to Watch: USD/JPY

USD/JPY 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

Like in other major dollar pairs, easing U.S.-Iran tensions, stronger U.S. equities, and optimistic FOMC member speeches have kept the dollar strong against the yen.

The pair is now about 40 pips from the big 110.00 major psychological handle, which also lines up with a strong resistance level from late November and most of December.

Dollar bears have stochastic and Williams %R in their favor as both oscillators point to USD/JPY being “overbought” on the 1-hour time frame.

Today’s December NFP release is also expected to print much lower than in November, which could encourage end-of-week profit-taking for some forex traders. The 108.00 and 108.50 levels are good targets if you’re looking to short the dollar.

Meanwhile, dollar bulls might want to wait for a clear break above the 110.00 handle. Markets already expect a weaker NFP reading today so a not-so-weak reading, or another upside surprise in the headline NFP or average wages could send the dollar higher. Depending on how long you’re planning to hold on to your trades, you can aim for a move to the 110.50 or 112.00 previous areas of interest.

Here’s a volatility guide for those who are planning on closing their NFP trades within the day: