GBP/USD is trading at $1.27508, slightly down by 0.05% in the session, as it remains above the pivot point at $1.27389. This level aligns with near-term bullish sentiment, supported by an upward channel providing a foundation for further gains.
Immediate resistance stands at $1.27703, with subsequent targets at $1.27932 and $1.28143. On the downside, key support is found at $1.27136, followed by $1.26863 and $1.26600.
The 50-day EMA at $1.27058 and the 200-day EMA at $1.27018 underline a supportive zone, suggesting a bullish structure. A sustained move above $1.27389 could open the door to higher resistance levels.
Euro Declines as Factory Orders, Retail Sales Disappoint
The Euro faced pressure as mixed economic data raised concerns. German Factory Orders fell by 1.5%, better than the forecasted -2.0% but far below last month’s 7.2% surge.
French Industrial Production dipped by 0.1%, missing expectations of 0.2%, while Retail Sales across the Eurozone declined by 0.5%, underperforming the predicted -0.3%.
Meanwhile, German Industrial Production dropped 1.0%, countering a forecasted 1.0% gain. These figures underscore ongoing economic challenges, impacting sentiment around the Euro.
GBP/USD eases from multi-week high, trades with negative bias below mid-1.2700s
The GBP/USD pair oscillates in a range below mid-1.2700s during the Asian session on Friday and consolidates its recent gains registered over the past three days, to over a three-week high touched the previous day. Traders now seem reluctant to place aggressive bets and opt to wait for the release of the crucial US monthly employment details later today.
The popularly known Nonfarm Payrolls (NFP) report will be looked upon for the interest rate outlook in the US and guide the Federal Reserve (Fed) policymakers on their next policy decision at the December meeting. This, in turn, will help determine the near-term trajectory for the US Dollar (USD) and provide some meaningful impetus to the GBP/USD pair. In the meantime, the recent decline in the US Treasury bond yields fails to assist the USD attract any meaningful buyers or recover from a multi-week low. Read more…
GBP/USD rallies on rate cut hopes, NFP Friday in the barrel
GBP/USD climbed on Tuesday, bolstered by Bank of England (BoE) Governor Andrew Bailey tipping his hand and revealing a path forward to further rate cuts in 2025. Broad-market investor sentiment remains on the high side, although a fresh round of key US Nonfarm Payrolls (NFM) jobs figures are looming just ahead on Friday.
BoE Governor Bailey noted earlier Thursday that he sees around four rate cuts in 2025, which briefly sent the Pound stumbling during the London market session, but GBP traders quickly recovered their footing and pushed Cable back into the high end for the day. The head of the UK central bank reiterated cautious talking points and reaffirmed a data-dependent stance, helping to keep market expectations on-balance that the BoE will leave rates unchanged on December 19. Read more…
Gold price breaks lower to hit weekly low near $2,615, eyes a second weekly decline.
The US Dollar bounces amid a souring mood due to China worries and South Korean political drama.
Gold price looks south, heading into US Nonfarm Payrolls amid daily bearish RSI and Bear Cross.
Gold’s price extends the previous decline to reach a fresh eight-day low near $2,615 early Friday. Gold traders now look forward to the all-important Nonfarm Payrolls (NFP) data for fresh impetus.
Will US Nonfarm Payrolls exacerbate the pain in Gold price?
In the lead-up to the US NFP showdown, the US Dollar (USD) has found fresh demand amid a slight deterioration in risk sentiment and profit-taking.
Investors’ sentiment sags on lingering political tensions in South Korea as the main opposition Democratic Party announced an impeachment motion against President Yoon Suk Yeol will be put to a vote on Saturday, per Asia News.
Further, Yonhap carried headlines citing South Korea’s opposition parties saying lawmakers were on standby after receiving many reports for another martial law declaration.
Additionally, persistent worries over China’s economic slowdown and US-Sino trade war undermine the broader market sentiment. Traders are cautious already and resort to repositioning before the US labor data due later in American trading.
Economists expect the US economy to have added 200K jobs in November after creating a meagre 12K jobs in October in the face of hurricanes and the Boeing strike.
If the headline NFP figure comes in below 200K, it would suggest a continued cool down in the US labor market, calling for further rate cuts by the Fed beyond December. The dovish narrative is set to bode well for the non-interest-bearing Gold price at the expense of the USD.
On the other hand, a strong NFP print is likely to strengthen the recent speculation that the Fed could pause its rate-cutting cycle after the expected rate reduction in December. The CME Group’s FedWatch Tool shows that the chances of the Fed lowering rates by 25 basis points (bps) later this month stand at about 70%, slightly down from 75% a day ago.
On Thursday, Gold price snapped its recovery momentum and returned to the red despite the sell-off in the US Dollar and the US Treasury bond yields. The disappointing US weekly Jobless Claims data failed to lift the sentiment around Gold price.
Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 224,000 for the week ended Nov. 30, the Labor Department said. Markets had forecast 215,000 claims for the latest week.
Gold price technical analysis: Daily chart
The daily chart shows that Gold’s price has broken the recent range to the downside as the 14-day Relative Strength Index (RSI) turns lower below the midline.
Adding credence to the renewed decline in Gold price, the previous week’s Bear Cross continues to act as a headwind.
A daily candlestick closing below the critical short-term 21-day Simple Moving Average (SMA) at $2,631 will likely strengthen the downside.
The next support aligns at the previous week’s low of $2,605, below which the 100-day SMA at $2,583 will be the line in the sand for Gold buyers.
On the flip side, recapturing the 50-day SMA resistance at $2,668 on a sustained basis is critical for buyers to negate the near-term bearish bias.
The next relevant resistance is seen at $2,700, above which the November 25 high of $2,721 will be tested.
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
The EUR/USD pair is one I always look at, as it can give you a bit of a “heads up” as to how the US dollar is moving.
As a general rule, if you understand where the US dollar is going, you can often understand what happens with most major forex pairs.
After all, major forex pairs have the “USD” as part of the equation.
As the euro is the most widely traded currency against the greenback, it’s a good determinant of what could happen.
Technical Analysis
The technical analysis is fairly neutral at the moment, despite the fact that we have seen quite a bit of pushback near the 1.05 level. The 1.05 level is a large, round, psychologically significant figure, and therefore it will attract a lot of attention overall. With this, I think that we are just simply hanging around in trying to sort out where the market is going to go over the longer term. With this being the case, I think you will more likely than not have a lot of noise, as the Non-Farm Payroll announcement comes out on Friday, which will attract a lot of attention and also cause a certain amount of liquidity issues that will increase volatility.
If we were to break above the 1.06 level, then it opens up the possibility of a move to the 1.0750 level. A short-term pullback from here should see plenty of support near the 1.05 level, but if we were to break down below there, then it’s possible that the euro drops to 1.04, which is a small support level, which has been tested a couple of times. Anything below there become somewhat catastrophic for the euro, as traders will more likely than not end up running to the US dollar in multiple currencies, not just this one.
The euro has rallied a little bit during the early hours on Thursday as we continue to see a lot of choppy behavior with the euro against the pound.
The 0.8250 level is an area that has been rather significant support and ultimately, I think this area is something that you need to pay close attention to.
Not only is it important right now, but it’s been important multiple times going back all the way to 2016.
We are on the precipice of perhaps falling apart or perhaps bouncing significantly. We’ll just have to wait and see if we do drop down below the 0.8250 level and even the 0.82 level then we have a situation where the market would really start to tank for the euro, you’d probably see the euro tanking against the US dollar as well i do think that’s a real possibility here so because of that I’m not willing to throw a huge position on to the upside.
IF We Break Higher
That being said, if we could recapture the 0.8350 level, then we may get a grind higher. That I don’t think would be a quick move, but it is a possibility. I mean, it’s something that we’ve seen previously, but the euro just looks really threatened right now. And if we do break down below the 0.82 area, you could see the market drop all the way down to the 0.76 level before it’s all said and done.
Obviously, this would be a huge move and would take quite a bit of time to get there. Ultimately, if that were to happen, I would also anticipate that the Euro would be doing better against the US dollar, and it could be a longer-term “buy on the dips” trend that a lot of people would be following. I don’t anticipate this happening, but it is something that you need to keep in the back of your mind.
The British pound has rallied a bit during the early hours on Thursday as we are slamming into the crucial 1.2750 level.
This is an area that’s been both support and resistance multiple times in the past, and simultaneously we are seeing the 50-day EMA at least attempt to break down below the 200-day EMA, kicking off the so-called death cross.
However, Friday features a non-farm payroll announcement and that could throw any move into disarray.
It does look like we are seeing a little bit of pushback as we have broken above 1.2750 only to drop back down towards it again. So, it’ll be interesting to see how this plays out. I do think we are at a major inflection point right now. So, I am watching this pair with great interest.
Greenback Strength Must Be Watched Closely
The US dollar itself has been very strong for some time and perhaps we’re seeing a little bit of profit taking ahead of the jobs report, but what will matter to me is where we close on Friday. I think that will tell the tale for a lot of things. And in that environment, we could have a little bit of a binary trade, not a binary options trade, a binary trade, meaning we are either buyers or sellers based upon a specific event.
If we break significantly above the 1.2750 level after non-farm payroll and hang on to it, perhaps you could just say if we close above there on Friday, then it might end up being a fairly significant buying opportunity. However, if we see this GBP/USD pair fall apart, then it’s very likely that we could go looking to the 1.25 level. I think Friday is pretty big for this one. In fact, this might be a situation where this controls what happens over the next several months, but we will have to wait and see if that ends up being the case.
Natural gas is poised to close weak for the day, below the halfway point for the day’s trading range. And that is after a successful test of resistance at the bottom of the internal uptrend line. Along with the 20-Day MA line, the trendline identified dynamic support for the uptrend. The trendline needs to be reclaimed before natural gas has a chance to proceed higher.
Possible Retracement Bottom
Recent price action in natural gas leaves several nearby price levels to key off. There is today’s high of 3.115 and the low of 3.035. Also, the 20-Day MA is at 3.06 and the swing low is at 2.98. Today’s high and the swing low are the more critical price levels as a move through either should determine the next direction. Either natural gas continues to rally in alignment with the larger bullish trend or, the bearish correction is not over until lower price levels are tested as support.
A continuation of the rally is signaled on an advance above today’s high of 3.115. That should confirm a bullish reversal and put natural gas in a position to continue to rise and eventually test recent highs, if not break through them. If today’s high is exceeded, then a reclaim of Tuesday’s high at 3.22 will provide the next sign of strength and therefore points to a continuation higher.
Below 2.98 May Lead Lower
On the downside, the next lower target zone is around the convergence of several price targets. There is the top boundary line of a large symmetrical triangle pattern, an extended downside target for the falling ABCD pattern at 2.90, and the 78.6% Fibonacci retracement at 2.875.
For a look at all of today’s economic events, check out our economic calendar.
The USD/JPY rebounded off its overnight lows, with the big rally in Bitcoin and DAX helping to reduce the yen’s haven appeal somewhat. But the pressure remains amid speculation that the Bank of Japan will hike interest rates at its upcoming policy decision on December 19, while dollar traders are looking forward to the release of US non-farm payrolls report on Friday, inflation data next week and the Fed’s own interest rate decision on December 18. So, the USD/JPY outlook is subject to change significantly in the next two weeks.
Yen loses some momentum after BoJ rate hike speculation
In the last few weeks, the yen has been gaining momentum against most major currencies, especially commodity dollars, the euro and to a lesser degree the US dollar. Investors have been piling into the yen amid speculation that the Bank of Japan could raise interest rates at its final 2024 meeting later this month.
But overnight, the BOJ’s Toyoaki Nakamura delivered dovish-leaning remarks, calling for policy tightening to proceed at a cautious pace. Toyoaki also expressed doubt about the sustainability of wage growth.
In as far as the US dollar is concerned, well until last week, the dollar had been on the ascendency amid the Trump trade, but the further big gains in risk assets like cryptos and stocks have helped to ease the pressure on some of the risk-sensitive currencies like the GBP and EUR, and this has helped to weigh on the dollar somewhat. This week’s weaker-than-expected ISM services PMI has also helped to put some downward pressure on the dollar.
Attention turns to US jobs report to shape near-term USD/JPY outlook
This week’s US economic indicators have been mixed. While the ISM manufacturing PMI at 48.4 beat expectations and showed an improvement from 46.5 the previous month, the ISMs services PMI was sharply below forecasts at 52.1 vs. 56.0 last. The JOLTS report was quite good at 7.74 million vs. 7.51 million eyed. Yet the latest weekly claims figures, released a few moments ago, was weaker, showing an unexpected rise to 224K vs. 213K eyed.
As the Federal Reserve zeroes in on employment trends, any signs of weakness in labour market reports might cement a December rate cut, currently priced with a 74% probability.
Thus, all eyes will be on the November jobs report, due Friday. This will be the headline event, before the focus turns to next week’s CPI report and the Fed’s decision the following week. After last month’s unexpectedly strong figures and the political shift from Trump’s re-election, expectations for aggressive Fed cuts in 2025 have waned. Whether the Fed decides to cut rates in the initial months of the new year could hinge on the next few employment reports, putting the focus on the NFP data on Friday.
Here is a list of key data highlights from the US on Friday, showing what is expected and what the previous readings were:
Fri Dec 6
1:30pm
USD
Average Hourly Earnings m/m
0.3%
0.4%
USD
Non-Farm Employment Change
202K
12K
USD
Unemployment Rate
4.2%
4.1%
3:00pm
USD
Prelim UoM Consumer Sentiment
73.1
71.8
USD
Prelim UoM Inflation Expectations
2.6%
Technical USD/JPY outlook
Source: TradingView.com
The USD/JPY remains stuck inside a rock and a hard place. Resistance is provided in the range between 151.20 to 152.00, where prior support and 200-day moving average meet. Support is provided around the 149.40 to 150.00 range (shaded blue on the chart). A clean move outside this range is now needed to potentially trigger follow-up buying or selling in that direction. Given the recent bearish price action, the risks are tilted modestly towards a downside breakdown.
Tepid United States employment-related data hit the US Dollar ahead of the NFP release.
Wall Street is under pressure but not far below record highs.
XAU/USD trades with a soft tone in the $2,630 region, could well reach fresh weekly lows.
Spot Gold kept trading uneventfully around the $2,650 mark throughout the first half of the day, with limited action across financial boards. The US Dollar (USD) was under pressure after the United States (US) released tepid employment-related data ahead of the release of the November Nonfarm Payrolls (NFP) report on Friday.
Initial Jobless Claims for the week ending November 29 rose to 224K, above the215K from the previous week and above the market’s expectations. Additionally, the US reported that US-based employers announced 57,727 cuts in November, a 3.8% increase from the 55,597 cuts announced one month prior, according to the Challenger Job Cuts report.
Nevertheless, the USD trimmed part of its losses and surged against Gold amid the poor performance of Wall Street. Following a mixed close among Asian and European indexes, US ones came under selling pressure right after the opening, suggesting a cautious mood.
XAU/USD short-term technical outlook
XAU/USD nears its weekly low posted on Monday at $2,621.77, and technical readings in the daily chart suggest the pair may extend its slide, albeit a break below such a low is needed. Gold is pressuring a bearish 20 Simple Moving Average (SMA), the latter at around $2,630, while the 100 SMA turns flat at around $2,580, reflecting receding buying interest. At the same time, technical indicators turned south, although the Momentum indicator holds within positive levels while the Relative Strength Index (RSI) indicator stands at neutral levels, suggesting a limited bearish potential.
In the near term, and according to the 4-hour chart, XAU/USD is neutral-to-bearish. The pair pressures a flat 100 SMA after breaking below an also directionless 20 SMA. Technical indicators aim lower with uneven strength but gain ground below their midlines. A bearish breakout is on the cards, although it may wait until after the release of the US NFP report.
PM Barnier loses a vote of no-confidence, as expected
Eurozone retail sales fall -0.5% MoM
EUR/USD trades caught between 1.0450 and 1.06
EUR/USD is rising despite the collapse of the French government. French lawmakers passed a no-confidence vote against PM Michel Barnier on Wednesday evening, throwing the country into more political uncertainty and a deeper crisis.
However, both the euro and the French CAC managed to move higher because the collapse of the French government was already priced in. Furthermore, contagion outside of French markets is fairly limited. The risk premium on holding French debt over German debt has risen to its highest level since 2012.
On the data front, eurozone retail sales were weaker than expected, falling -0.5% MoM in October after falling -0.3% in September. The data comes after weak PMI data yesterday showed the eurozone composite PMI fell to a 10-month low.
The ECB is expected to cut interest rates by 25 basis points next week, and the markets are also pricing in around 157 basis points worth of easing by the end of next year, significantly more than the level of easing expected from the Federal Reserve.
The US dollar is trading slightly lower versus its major peers after Federal Reserve chair Jerome Powell’s speech yesterday, where he continued support for a slower pace of rate reductions ahead but did nothing to deter from expectations of a December cut.
Attention now turns to US initial jobless claims and comments from fed Barkin.
EUR/USD forecast- technical analysis
After recovering from a low of 1.0330 EUR/USD is consolidating between 1.06 and 1.0450. To extend the bearish trend that has been in place since the end of September, sellers will look to break below 1.0450 to test 1.04 and 1.0330.
Meanwhile, a rise above 1.06 creates a higher high and support the pair towards 1.07
USD/JPY falls with BoJ rate hike bets in focus & ahead of jobless claims data
BoJ chatter & safe haven flows support the yen
US eases after post-Powell gains; jobless claims are up next
USD/JPY falls towards 150.00
USD/JPY resumed its downtrend after rising in the previous session. It is strengthening as traders assess whether the BoJ will hike interest rates again later this month. Known dove policy maker Nakamura said he wasn’t opposed to rate hikes, which has helped to strengthen the currency.
BoJ will announce its rate decision on December 19th, and expectations of a hike have been growing following recent comments from Ueda. However, media reports have raised questions over whether the hike will actually happen.
The yen is also benefiting from concerns surrounding South Korea, where the won continues to trade around a 2 year low following a short-lived martial law decree.
The U.S. dollar gained yesterday, but it’s inching lower against its major peers today after Federal Reserve Jerome Powell highlighted the strength of the U.S. economy and signaled support for slower rate reductions. However, a December rate cut is still expected, with the market pricing in a 74% chance of a 25 basis point reduction.
Attention is now on US jobless claims, which come ahead of Friday’s non-farm payroll report. Expectations are for 215k jobs added, up from 213k. Non-farm payrolls are expected to show 200,000 jobs were added in November up from just 12,000 in October.
USD/JPY forecast – technical analysis
After falling from a peak of 156.75, USD/JPY fell below the 200 SMA before finding support at the 100 SMA at 148.65. The recovery failed to rise above 150.8, the 0.5% Fib retracement of the 162 high and 139 low.
Sellers supported by the RSI below 50 will look to extend the bearish trend below 148.65 towards 148.15 the 38.2% level and towards 145.00.
Should buyers retake 150.80 a move towards 153.85 and 157.10 could be on the cards.
