Non farm payrolls expected to dominate today

The non-farm payrolls will be the main focus today, the expectation median is 240k to be added, which is a drop from the previous 321k reading.

The range of estimates is from as low as 160k to the highest at 305k. Only time will tell how this one pans out and is set to be volatile.

The USD gave back some ground late last night as the Fed’s uber dove Kocherlakota, a non-voter, warned the Fed against raising rates this year. This sent the USD falling around 30 pips against most.

As the morning gets under way the FX markets look set to consolidate as we wait for the main event. The unemployment rate is expected to stay at 6.6% which is realised at the same time as NFP.

In the Asian session the Australian retail sales data was out and was a disappointing number, but this didn’t unduly affect the strength in the AUD.

The China CPI, also released overnight, was pretty much in line with expectation but still near to five-year lows. This gave an extra boost for the Aussie and Kiwi, as it gives the Chinese policy makers more room to ease.

Currently the AUD/USD is above 0.8100 and the NZD/USD is above 0.7800

The euro is still in free fall after dropping through the 1.18 level yesterday and making fresh nine-year lows. Even with a stronger retail sales print yesterday, it still wasn’t enough to stop the selling. Some comments from Draghi helped the move lower as he hinted at a January move on QE, as they are reassess the monetary policy stance and that QE may include sovereign-bond buying.

Euro is currently trading at 1.1800, with no data from the EU today, but we can expect the NFP to dominate the direction.

The pound is currently around the 1.5100 level after breaking yesterday down to as low as 1.5030, with manufacturing production due up first – which is expected to rise to 0.4% from a previous -0.7%, which could give it some strength before the NFP data is known.

EUR/USD

Supports  1.1750 1.1700 1.1640  | Resistance  1.1815 1.1865 1.1900

USD/JPY

Supports  119.15 118.80 118.10  | Resistance  120.00 120.85 121.85

GBP/USD

Supports 1.5025 1.5000 1.4960  | Resistance 1.5150 1.5200 1.5255