Investors Eagerly Awaiting US Non-Farm Payrolls

The euro saw upward movement against its main currency rivals yesterday, after the ECB announced that euro-zone interest rates would remain unchanged at 0.75%. Meanwhile, risk taking among investors helped the price of crude oil stage a minor upward correction after falling more than $4 earlier in the week. Today, traders can anticipate significant market volatility following the release of the all-important US Non-Farm Payrolls figure. Analysts are predicting the jobs report to come in above last month's figure, which if true, could result in risk taking and further boost higher yielding assets like the euro and crude oil.


Economic News

USD - US Employment Data Set to Create Dollar Volatility

An increase in US unemployment claims from last week resulted in the US dollar falling against several of its main currency rivals yesterday. The unemployment figure resulted in slight pessimism among investors regarding the US economic recovery. Against the Swiss franc, the dollar fell more than 60 pips during European trading to reach as low as 0.9310. A minor upward correction brought the greenback to 0.9320 by the evening session. The USD/CAD sunk more 55 pips for the day, eventually trading as low as 0.9811.

Today, dollar traders will want to pay close attention to the US Non-Farm Employment Change figure, set to be released at 12:30 GMT. The figure is widely considered the most important event on the forex calendar and consistently leads to market volatility. At the moment, analysts are predicting that today's news will come in at 115K, slightly higher than last month's 96K. If the news comes in significantly below the expected level, investors may revert to safe-haven currencies, which could boost the dollar against higher-yielding assets like the euro and AUD.

EUR - ECB Press Conference Results in EUR Gains

The EUR received a boost against its main currency rivals yesterday, following a press conference in which ECB President Draghi vowed to preserve the euro. The common-currency shot up to a two-week high against both the USD and JPY during mid-day trading, as the news resulted in investors shifting their funds to higher yielding assets. The EUR/USD traded as high as 1.3011, up close to 90 pips for the day. The EUR/JPY advanced more than 50 pips during mid-day trading to reach as high as 102.13. A slight downward correction brought the pair to the 102.00 level by the beginning of evening trading.

Today, the main piece of economic news is guaranteed to be the US Non-Farm Payrolls figure, set to be released at 12:30 GMT. Euro traders should note that any better than expected news may result in additional risk taking among investors, which could boost higher-yielding assets like the euro before markets close for the weekend. At the same time, if the news disappoints, the euro could reverse some of yesterday's gains against its safe-haven currency rivals.

Gold - Gold Hits Fresh 11-Month High

Risk taking among investors, following the ECB's decision to leave euro-zone interest rates unchanged, helped the price of gold reach a fresh 11-month high during mid-day trading yesterday. Overall, the precious metal gained close to $14 an ounce to trade as high as $1794.51. A slight downward correction later in the day brought prices to the $1790 level.

Today, gold may be able to extend its upward momentum following the release of the US Non-Farm Payrolls report at 12:30 GMT. Any better than expected news could result in additional risk taking in the marketplace, which may send prices above the psychologically significant $1800 level.

Crude Oil - Risk Taking Helps Crude Oil Recoup Losses

After falling close to $4 a barrel earlier in the week, crude oil was able to recoup some of its losses yesterday after euro-zone news led to investor risk taking. Overall, the commodity gained close to $2 during European trading to reach as high as $90.33.

As markets get ready to close for the weekend, traders should note that crude oil may be able to extend yesterday's gains after the release of the US Non-Farm Employment Change figure. Any better than expected news may signal to investors that demand for oil in the US will increase, which would result in higher prices.

Technical News

EUR/USD

The Williams Percent Range on the weekly chart is approaching the overbought zone, signaling that a downward correction could take place in the coming days. Additionally, a bearish cross has recently formed on the same chart's Slow Stochastic. Going short may be the wise choice for this pair.

GBP/USD

The Bollinger Bands on the daily chart are narrowing, signaling that a price shift could occur in the near future. Furthermore, a bullish cross on the same chart's Slow Stochastic appears to be forming. Traders may want to open long positions for this pair.

USD/JPY

Most long-term technical indicators show this pair range-trading, meaning that no defined trend can be determined at this time. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

USD/CHF

The Bollinger Bands on the daily chart are narrowing, indicating that this pair could see a price shift in the near future. Additionally, the same chart's Williams Percent Range is approaching the overbought zone, indicating that the price shift could be bearish. Going short may be the best choice for this pair.

The Wild Card

USD/PLN

The Williams Percent Range on the daily chart has fallen into oversold territory, signaling a possible upward correction in the near future. Additionally, the MACD/OsMA on the same chart has formed a bullish cross. Forex traders may want to open long positions for this pair.