EURUSD stays pressured as market prepares for US NFP

Traders brace for the US employment report on early Friday, portraying the typical pre-NFP inaction. It’s worth noting, however, that the US Dollar traces recovery in the US Treasury bond yields despite witnessing mostly downbeat US job signals.

Even so, the greenback remains firmer on the week and challenges the prices of commodities like Gold. However, the Crude Oil extends the previous day’s rebound after a surprise draw in the US inventories. Also helping the energy buyers are the geopolitical fears and Saudi Arabia’s push for more supply cuts.

It’s worth noting that the growing economic concerns about Europe and the UK challenge the EURUSD and the GBPUSD pairs while AUDUSD fails to cheer hawkish signals from the Reserve Bank of Australia (RBA) Monetary Policy Statement (MPS). Further, USDCAD lacks clear directions despite the Bank of Canada’s (BoC) higher rates and a recovery in the Oil price.

On a different page, the Asia-Pacific shares struggle to copy Wall Street’s moves while the US stock futures print mild losses. That said, the European and the British equities begin the NFP day on a positive side.

BTCUSD drops for the third consecutive day after refreshing the yearly high but ETHUSD retreats from the 19-month high after rising the most in 12 days. Even so, the crypto bulls are hopeful ahead of the spot ETF approvals amid expectations favoring an early bull cycle.

Following are the latest moves of the key assets:

• Brent oil extends recovery from a five-month low, mildly bid at $75.50 by the press time.
• Gold price remains defensive after bouncing off weekly low on Wednesday, up 0.10% near $2,030 at the latest.
• USD Index picks up bids to reverse the previous day’s retreat, up 0.12% on a day near 103.75 as we write.
• Wall Street closed positive but Asia-Pacific stocks struggle while equities in the UK and Europe print mild gains at the latest.
• BTCUSD and ETHUSD print minor losses to pare the weekly gains to around $43,200 and $2,350 by the press time.

US Dollar grinds higher ahead of NFP…

The US Dollar Index (DXY) snapped a three-day winning streak with the biggest daily loss in a week the previous day, mildly bid near 103.70 by the press time. That said, the US employment clues published so far during the week signaled mostly softer prints of the US Nonfarm Payrolls (NFP) and cooling employment conditions, which in turn weighed on the US Treasury bond yields and the US Dollar.

Even so, comments from US Treasury Secretary Janet Yellen joined the market’s cautious mood ahead of today’s US employment report for November to put a floor under the US Dollar. It should be noted that US Treasury Secretary Yellen praised the Federal Reserve’s strong performance while conveying her “very satisfied” feeling about the path the US economy is on.

Additionally, economic concerns about China, Europe and the UK join the West versus East geopolitics to cap the Gold Price upside but the downbeat US Treasury bond yields allow the traders to seek solace in the traditional safe-haven. It’s worth observing that the benchmark 10-year Treasury bond yields struggle to defend the previous day’s corrective bounce from a three-month high amid escalating dovish calls about the Fed and recently downbeat US data. Even so, talks about the US soft-landing challenges the commodity buyers.

That said, the latest update from the Bank of England’s (BoE) Prudential Regulation Authority (PRA) identified risks in private credit and leveraged lending. The same intensified fears about the UK economy and prod the British Pound’s (GBP) strength.

Also, the final readings of Japan’s Q3 GDP joined a corrective bounce in the Treasury bond yields to lift the USDJPY from a four-month low. That said, Japan’s Q3 GDP flashed -0.7% QoQ figures versus -0.5% initially expected and +1.2% prior. The Yen pair slumped to a four-month low as chatters about the Bank of Japan’s (BoJ) exit from ultra-easy monetary policy gained momentum on BoJ Governor Kazuo Ueda’s speech on options following the end of the current monetary policy stance.

On a different page, the Reserve Bank of Australia’s Head of the Financial Stability Department, Andrea Brischetto, crossed wires earlier in the day while ruling out the odds of witnessing severe financial stress even if budget pressures affect households across Australia.

It’s worth observing that the European Central Bank (ECB) officials defend the hawkish bias while trying to tame the expectations of witnessing a prolonged recession in the Old Continent. The same joins the US Dollar’s gradual recovery to weigh on the EURUSD ahead of the key US employment data.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

US employment, consumer data in focus…

The US employment report for November and the preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment for December will be crucial for intraday directions. That said, a likely improvement in the US Nonfarm Payrolls (NFP), to 180K from 150K prior, and a steady Unemployment Rate of 3.9%, might allow the US Dollar to extend the previous recovery and end the week on a positive note. However, disappointment from the data won’t be taken lightly and can amplify bearish bias about the Greenback, which in turn may help the commodities and the Antipodeans ahead of the weekend readings of China inflation and next week’s FOMC.

May the trading luck be with you!