Will the CPI Crash the USD?
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Currency market on December 6: the NFP Friday
Important events today: all around the USD
We can say that today is a Black Friday for currency markets – the American Non-Farm Payrolls are out. Although that is going to be the major market mover today, it is not the only one. Some more details are below.
- American Non-Farm Payrolls, unemployment rate, and average hourly earnings are out at 15:30 MT time (13:30 GMT) – be careful with the volatility of USD and related currencies around the data release time
- Canadian jobs data - 15:30 MT time (13:30 GMT)
- OPEC will be concluding its round of discussions and meetings today
EUR/USD starts the day on a positive note
The price of EUR/USD has started this day by reconfirming the level of 1.1104 that it reached on Wednesday. It was a breakthrough of the month as the currency pair has never been that high since the first week of November. On the H4, the pair trades above the 200-period, 100-period and 50-period Moving Averages, which is another sign that there is a stronger bullish momentum than before. However, we still have to see how strong it is, and the resistance of 1.1130 may be a good level to check that. Today, a major factor influencing that will be the volatility of the USD in the context of relatively strong market expectations from the US Labor Authorities for the Non-Farm Payrolls and related data they are about to release.
USD/CAD waiting for the news
It is safe to assume that the consolidation of USD/CAD at the resistance level of 1.3185 reached on Thursday is a preparation for a more decisive move. There are some preliminary signs of a coming bullish trend to continue the correction after the serious drop at the beginning of the week. The Awesome Oscillator reached the low yesterday and reverted upwards signaling the general upward direction of the price. However, the next step will be defined by the release of the Non-Farm Payrolls due today from the US side and the jobs data due at the same time from the Canadian side. Therefore, watch the news and be careful with the coming price volatility.
USD against JPY and CHF
Against the Japanese yen and the Swiss franc, the American dollar shows similar patterns during the last two weeks. Both currency pairs dropped significantly on December 2-3, below the 200-period, 100-period, and 50-period MAs, and both are showing a mild correction since then, having bounced down on Thursday from the local resistance levels corresponding to each one. Although the internal and external contexts for the Swiss and the Japanese currencies are different, the common factors such as the Non-Farm Payrolls moving the USD will affect both in a similar way once again. That effect may be reinforced by the fact that both currencies are safe-haven and gain strength when the market feels uncertainty about the American dollar.
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