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Friday, December 8th
The EUR/USD pair keeps navigating southwards for the fourth session in a row, remaining within striking distance of its 2-week lows, marked in the area of 1.1740. Increased demand for the US dollar remains one of the key navigators across amid investors' expectations that long-awaited US tax reforms will be implemented by the end of this year, which, in turn, negatively affects the pair on the last day of this working week. Moreover, strong drawdown of the euro in the cross with the pound on the back of progress in the Brexit negotiations exerts additional correlation pressure on the single currency across the market. On the data front, today all eyes will remain on the data from the US labor market, which will be able to shape up the tone of the US dollar ahead of next week’s Fed meeting.
The GBP/USD pair continues to show positive dynamics in the second half of this week, trading above the level of 1.35 amid the progress made in the Brexit negotiations. As it became known earlier, the European Union and the UK reached a compromise on Brexit settlement bill. Today the UK PM Theresa May and President of the European Commission Jean-Claude Juncker met to sign an agreement, which allows both sides to move on to the next phase of negotiations. Moreover, strong risk-on sentiments were dominating the market in Asia, lending support to higher-yielding assets, such as the pound. Looking ahead, today we are expecting pretty volatile session, as both sides have prepared important data releases, which will help the pair to form its further direction.
The USD/JPY pair remains bullish for the second day in a row, having refreshed its 3-week highs, despite slew of upbeat data from the Japanese economy. Seems that Japanese bulls mostly ignored positive numbers of Japan’s GDP report, allowing the pair to reach the area of 113.50. The main reason of pair’s bullish rally is a pickup in the US Dollar demand, which is dominating the market on Friday. Moreover, prevalent risk-on moods, triggered by positive Chinese trade balance data, is another negative factor for the yen, which is contributing to pair’s upside rally. However, further growth of the pair looks fragile, as all traders’ attention shifts towards the US monthly jobs report, which will hog the limelight during the NA session, as markets believe that it could affect further Fed monetary policy course.
Bitcoin again distinguished himself. The world’s largest cryptocurrency once again surprised the cryptomarket at the end of this week. In Asia, the BTC/USD pair rose to its new ultimate highs, marked at 17147.00. However, it seems that bitcoin bulls appeared exhausted and the pair retreated by $3000 to the area of 14000.00. Further, Bitcoin tried to regain its bullish mood, having risen to the level of 16000 at the beginning of European trading session, but the attempts of the crypto currency were unsuccessful and the pair sank to the level of 15000.00. This Bitcoin’s sharp retreat is mainly attributed to profit taking actions, as digital currency gained more than 70% over the last 7 days. By the moment of writing, the price of Bitcoin was $15382.00, and its market capitalization remained at $265 billion, according to data from coinmarketcap.com.
The main events of the day:
UK Manufacturing Production – 11.30 (GMT +2)
US Nonfarm Payrolls – 15.30 (GMT +2)
US Unemployment Rate – 15.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1743 R. 1.1829
USDJPY S. 111.87 R. 113.75
GBPUSD S. 1.3261 R. 1.3589
USDCHF S. 0.9842 R. 0.9996
AUDUSD S. 0.7465 R. 0.7593
NZDUSD S. 0.6782 R. 0.6912
USDCAD S. 1.2751 R. 1.2919
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