We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
  • The price of #gold plunged 1% immediately after the stunning US jobs report crossed the wires. Get your market update from @RichDvorakFX here: https://t.co/8i0L6YIqjy https://t.co/y9dIXazJf9
  • S&P 500, Dow Jones, Nasdaq explode higher with stocks surging in response to shockingly better-than-expected monthly jobs data. Get your #equities market update from @RichDvorakFX here: https://t.co/nuMVWOzzuC https://t.co/M3nGBjd7kZ
  • The record-breaking NFPs increase behind us and the FOMC rate decision on Wednesday sets the tone for my trading video: 'Dow Soars Above 200-Day Average on NFPs, Will the #Fed Keep the Dollar Sliding' https://www.dailyfx.com/forex/video/daily_news_report/2020/06/06/Dow-Soars-Above-200-Day-Average-on-NFPs-Will-the-Fed-Keep-the-Dollar-Sliding.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/kquvec5HVc
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/OsaphmqEmu
Preview for December NFP and Price Action Outlook for USD

Preview for December NFP and Price Action Outlook for USD

2018-01-05 11:15:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- Ahead of the US jobs report, rates markets (per Fed funds futures) are pricing in a 73% chance of a Fed rate hike in December.

- Expectations for the headline NFP figure have turned higher after the ADP Employment report showed that the US economy added +250K jobs last month.

- Retail trader sentiment continues to suggest weakness among the major USD-pairs.

Upcoming Webinars for Week of December 31, 2017 to January 5, 2018

Today at 8:15 EST/13:15 GMT: Live Event Coverage: US NFPs (OCT)

See the full DailyFX Webinar Calendar for other upcoming strategy sessions

The US Dollar (via DXY Index) is continuing to claw back its weekly losses, with the DXY Index almost back to unchanged on the week ahead of the December US Nonfarm Payrolls report this morning.

Price action has been decidedly bearish for the DXY Index over the past few weeks, holding below its daily 8-, 13-, and 21-EMAs; and both MACD and Stochastics remain trending lower, nestled comfortably in bearish/negative territory. For now, however, the weekly low is holding at 93.78, coincidentally the post-September FOMC meeting swing low on September 22.

Chart 1: DXY Index Daily Timeframe (August 2017 to January 2018)

Preview for December NFP and Price Action Outlook for USD

Current expectations for today's data have improved over the last 24-hours, after better than expected ADP Employment report showing that the US economy added +250K jobs last month. Unfortunately, while the ADP report in conjunction with the ISM Services report serve as contemporaenous indicators, we don't get the ISM Services data until 90-minutes after the December NFP is released. Accordingly, according to a Bloomberg News survey, the unemployment rate expected to hold at 4.1%, and the headline jobs figure to come in at +190K. Wage growth is due in around +2.5% y/y.

Overall, as long as the headline in today's jobs report comes in above +75K to +125K, the jobs data will be good enough to keep the economy on track to maintain the unemployment rate (U3) at 4.1% through the end of 2018. The Atlanta Fed Jobs Calculator shows that the US economy needs to add +109K jobs for the next 12-months to maintain the unemployment rate at 4.1%.

From this point of view, the US Dollar's bearish posture could erode heading into next week, particularly if US Treasury yields continue trending higher, the US Dollar remains a favorable 'buy the dip' candidate against the lower yielding safe haven currencies like the Japanese Yen.

Chart 2: USD/JPY Daily Timeframe (January 2017 to January 2018)

Preview for December NFP and Price Action Outlook for USD

USD/JPY has been trading in a sideways range for the past 12-months, with the recent swing highs since April 2017 capped off near 114.60. The pair does however have a burgeoning bullish technical structures ahead of the US jobs data today. In USD/JPY, price is above the 8-, 13-, and 21-EMA envelope, while MACD and Stochastics are in bullish territory (above the median or neutral lines). Accordingly, we'll be watching for a break of the December 12 high of 113.75 to signal that a swing into the 12-month range highs is due up next.

Read more: USD Rebounds, but Out of Favor at Start of 2018

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.