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Major currencies are not doing too much to start the day but the dollar remains vulnerable amid the moves so far this week. EUR/USD rose higher after the ECB yesterday, with the pair up to its highest in seven weeks near 1.0950 now. There is breathing room until we get to 1.1000 but it will depend on the US jobs report later today.
Besides that, USD/JPY is also setting up for another potential technical break as outlined here. And then we have USD/CAD breaking back below its 200-day moving average yesterday to 1.3445 now. Meanwhile, AUD/USD is also up to fresh seven-week highs at 0.6630 as buyers look to come up for air in the short-term.
The main focus and attention today will be on the non-farm payrolls data. The reaction to it is what matters most but let’s take stock of how markets are feeling at the moment.
Considering broader sentiment, it looks like traders are wanting a release that will validate the moves this week i.e. softer dollar, stronger risk trades. That means it is going to take quite some convincing to turn sentiment around as we look towards the weekend. And barring any material change to the Fed outlook on the hawkish side, I reckon the play will be to fade any opposite reaction to the flows we have seen in the last few days. But we’ll see.
As for European trading today, it will be a bit of a dud until we get to the US jobs report.
0700 GMT – Germany January industrial output
0700 GMT – Germany January PPI figures
0745 GMT – France January trade balance
1000 GMT – Eurozone Q4 final GDP figures
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
