Forex Signals Brief December 6: All Eyes on the NFP After the Weak US Jobs Data This Week
Today the Non-Farm Payrolls report takes importance after a number of weak US labour data and a tumble in Services activity this week.
Thursday’s trading session was marked by significant volatility as markets prepared for Friday’s highly anticipated non-farm payrolls (NFP) report. Despite the activity, no clear narrative emerged, and the U.S. dollar experienced a broad decline, though the reasons behind its weakness were unclear. Initial unemployment claims were slightly higher than expected, but the increase was not substantial enough to cause concern. Federal Reserve expectations remained steady, with markets maintaining a 70% probability of no rate change in December.
In the currency markets, the GBP and the Euro benefiting from dollar softness. The euro also overcame earlier concerns tied to political uncertainties in France. Bitcoin remained in focus after breaking the $100,000 milestone during Wednesday’s Asian trading. The cryptocurrency extended gains before profit-taking during the U.S. equity market open triggered a dip. Bitcoin briefly fell below $100,000 to end the session at $99,300. so the price action has created anticipation around whether Bitcoin can hold above the key $100,000 level through the weekend.
Oil markets saw price fluctuations as traders focused on the ongoing OPEC meeting. Crude oil briefly dropped to $68 per barrel before rebounding to $69. Prices settled in a narrow range near the midpoint, with market participants awaiting further clarity on OPEC’s production plans. Overall, Thursday’s market reflected an atmosphere of anticipation. While the pound and Bitcoin showed notable activity, broader sentiment remained cautious. Key catalysts such as the NFP report and OPEC outcomes are expected to provide clearer direction in the coming days.
Today’s Market Expectations
Canadian Labour Market Expectations
The Canadian Labour Market report for November is expected to show a net gain of 27.5K jobs, a significant improvement from the 14.5K jobs added in October. Despite this growth, the unemployment rate is forecast to tick slightly higher, moving to 6.6% from 6.5% previously.
With inflation now within target levels, the Bank of Canada (BoC) has shifted its focus toward fostering economic growth. Following Friday’s Canadian GDP release, which pointed to slower-than-expected economic expansion, market expectations for a 50 basis point rate cut in December have increased to 52%. However, stronger-than-anticipated job growth could reduce these odds and make a 25 basis point cut the more likely outcome.
U.S. Non-Farm Payroll (NFP) Expectations
The U.S. labor market is also under scrutiny, with November’s NFP report projected to show a gain of 195K jobs, a sharp recovery from the 12K jobs added in October. The unemployment rate is expected to edge higher, rising to 4.2% from 4.1%.
Wage growth metrics indicate a slight moderation:
- Month-on-Month (M/M) Average Hourly Earnings: Expected at 0.3%, down from 0.4% in October.
- Year-on-Year (Y/Y) Average Hourly Earnings: Forecast at 3.9%, slightly lower than the prior 4.0%.
The previous NFP report was largely disregarded due to distortions caused by hurricanes and strike activity, as well as distractions from the U.S. Presidential Election. However, with favorable labor market data emerging throughout November, market sentiment around this NFP report leans optimistic, suggesting upside surprises could be in store.
Yesterday, the currency markets largely traded within established ranges, but some turbulence emerged during the session. The U.S. dollar, which started the day on strong footing, reversed course and weakened as trading progressed. By the end of the day, three trade signals had been closed—two in stock markets and one in forex. All three signals proved profitable, reflecting well-timed entries and exits amid the day’s fluctuating market conditions.
Gold Continues the Consolidation Between MAs
God prices faced significant downward pressure in the commodities market, falling over $30 during the European session. This decline coincided with a resurgence in U.S. dollar strength. The dollar index rose 0.5% to hit a one-week high after comments from former President Donald Trump, who threatened 100% tariffs on BRICS countries contemplating alternatives to the U.S. dollar in trade. These remarks bolstered the dollar and reduced foreign interest in gold, pushing prices to approximately $2,621.86 per ounce.
XAU/USD – Daily Chart
GBP/USD Breaks Above the 200 Daily SMA
The GBP/USD pair experienced considerable volatility, momentarily dipping below the critical 1.25 level last month under sustained selling pressure. However, the pair staged an impressive recovery, climbing 2.5 cents to close the week at 1.2749. Despite this rebound, the 200-day simple moving average (SMA) acted as a strong resistance, rejecting further gains at that level. Today, renewed buying momentum pushed the GBP/USD pair above the 200 SMA, hinting at a potential shift in market sentiment. This breakout could pave the way for additional upside if sustained.
GBP/USD – Daily Chart
Cryptocurrency Update
Bitcoin Remains Supported by MAs
The cryptocurrency market witnessed a historic moment as Bitcoin surged past the $100,000 mark for the first time. Early European trading saw continued bullish momentum, with Bitcoin closing above $102,000, signaling the onset of a strong bull market. Former U.S. President Donald Trump’s cryptic “You’re welcome” comment in response to Bitcoin’s milestone is widely interpreted as an indirect endorsement, adding a psychological boost to the market. With this breakthrough, analysts anticipate new price targets of $120,000, $150,000, or even $200,000.
BTC/USD – Daily chart
Ethereum Hold Above $3,600
Ethereum mirrored Bitcoin’s volatility, initially dipping below $3,000 but rebounding strongly to trade above $3,500 and approaching $4,000. The ability of Ethereum to break past its 50-day SMA underscores the broader strength of the cryptocurrency market. This rally reflects growing investor confidence in digital assets, supported by increasing adoption and optimism about future price growth.
ETH/USD – Daily chart
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