Employment Data Spotlight: How Will Markets React this Friday?

Good morning, traders, and welcome to this crisp Friday morning, where the ambiance in the trading world is cautiously anticipatory, particularly against the backdrop of yesterday’s somewhat restrained market movements and the macro calendar events that unfolded.

Thursday was characterized by an almost palpable serenity, where key data points like the US unemployment claims came forth, aligning smoothly with expectations and allowing some semblance of stability to permeate through the markets. North of the border, Canada’s Ivey PMI showcased a robust figure, landing at 53.1, significantly outpacing the anticipated 50.8 and potentially influencing the CAD in its forthcoming interactions.

As we pivot towards today, Friday casts its spotlight primarily on the non-farm payrolls from the US, a pivotal metric expected to chart at 171,000. The unemployment rate is also forecasted to contract slightly, inching down to 3.7% from its previous 3.8%. Additionally, Canadian job data will be thrust into the fray, providing potential catalysts for CAD-related pairs and assets, and thereby, offering intriguing opportunities and challenges for traders to navigate.

In the Currency Domain:

• EURUSD: This pair is gingerly attempting a bullish foray, shaping what might emerge as a double bottom formation and introducing the potential for upward movement, contingent of course on a variety of global economic indicators and particularly the forthcoming US data.
• USDCHF: A mirror to the EURUSD, here a potential second top of a double top formation is crafting an interesting narrative for traders to dissect, especially considering the recent dovishness clouding the USD.
• AUDUSD & NZDUSD: Both displaying attempts at reversals, their respective trajectories today will undeniably be influenced, at least partially, by the US data cascade that Friday brings.

Commodities:

• Oil: Thursday’s continuity in bearish sentiment, underscored by a breach below significant supports, has set a somewhat bleak stage for oil, with Brent grappling beneath $88 and WTI wavering below $83.
• Gold and Silver: Metals linger in a stagnant correction phase, with their typically safe-haven statuses potentially being put to the test amidst today’s data releases and resultant market movements.

Indices: Indices have adopted a ‘wait and see’ stance, with Thursday revealing minimal movement and volatility dipping notably across various global indices. The S&P 500, NASDAQ, and DAX, amongst others, are evidently in a state of limbo, potentially awaiting directional cues from the forthcoming employment data from the US.

Source: https://www.axiory.com/analytics/market-news/employment-data-spotlight-how-will-markets-react-t