US NFPs Enter the Spotlight Amid Omicron Concerns

THE US DOLLAR GAINED, WHILE EQUITIES REBOUNDED AHEAD OF THE US JOBS DATA

The US dollar traded higher against most of the other major currencies on Thursday and during the Asian session Friday. It lost some ground only versus GBP and CHF, while it gained the most against AUD, NZD, and EUR.

DJIA — TECHNICAL OUTLOOK

The Dow Jones Industrial Average traded higher yesterday, after hitting support at 34080. However, the overall price structure remains of lower highs and lower lows, and thus, even if the recovery continues for a while more, we will class it as a correction before the next leg south.

EUR/USD — TECHNICAL OUTLOOK

EUR/USD traded slightly lower yesterday, after it hit resistance at 1.1347. Since November 26th, the pair has been trading in a sideways manner, between 1.1258 and 1.1375, and thus, we prefer to wait for exiting that short-term range before examining the next directional move. However, in the bigger picture, EUR/USD remains below the downtrend line taken from the high of May 25th, and thus, we will consider the overall outlook to be negative.

AS FOR THE REST OF TODAY’S EVENTS

At the same time with the US employment report, we get jobs data for November from Canada as well. The unemployment rate is forecast to have slid to 6.6% from 6.7%, while the net change in employment is forecast to show that the economy has added 35.0k jobs after adding 31.2k in October. Following the stronger-than-expected rebound in economic activity during Q3, a decent jobs report could increase speculation for a rate hike by the BoC soon and thereby support somewhat the Loonie. Remember that at their latest gathering, Canadian policymakers unexpectedly ended their QE program, maintaining an optimistic stance. Having said all that though, it remains to be seen whether the Omicron variant will be a reason for changing plans. With that in mind and taking into account that the Loonie is a risk-linked currency, we will treat any rebound as a corrective bounce and we would expect it to come back under selling interest, in case the broader sentiment deteriorates again.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
JFD

JFD

JFD is a leading Group of Companies offering financial and investment services and activities.