Today’s job report and next week’s Fed meeting is going to be the near-term game changer in some of the FX pairs like AUDUSD and NZDUSD. Market participants are widely expecting a third-rate hike next week and it was priced in completely. Today’s job report outcome, unlike to change the Fed rate path.

ADP employment report: Private sector employment increased by 190,000 jobs from October to November, slightly above market expectations.

We expect November nonfarm payroll employment to increase 180,000, economists expect 200,000. The  September employment fell to 18,000 but in October bounce back to 261,000. Before the impact of Hurricanes Irma and Harvey, this year’s average in August was 176,000.

Our main focus remains on average hourly earnings, we forecast 0.30% m/m basis and 2.7% Y/Y basis. The Unemployment rate likely to remain at 4.1%.

FOMC minutes revealed, Many participants judged that the economy was operating at or above full employment and anticipated that the labor market would tighten somewhat further in the near term, as GDP was expected to grow at a pace exceeding that of potential output.

FX overview

We are closely watching EURUSD and USDJPY  in the FX markets. In commodities, we are watching Silver and Gold. Prior to Gold sell-off (Thu), Silver has given a break down on Tuesday. In our yesterday’s Forex-Daily article we forecast gold breakdown. 

USDJPY:

Resistance: 113.50, 113.90/114.00 it’s 100 fe and 114.35/ 114.50  earlier double top

Support: 112.80 it’s 50MA, 112.00 (Monday low) and 111.60 (Oct 16 low)

The daily RSI and oscillator appear bullish. In case of encouraging average hourly earnings, we could expect 114.00 and 114.35 by the end of the day. Alternatively, 112.30/112.00 and 111.70  is an open target.

EURUSD:

Support: 1.1750 it’s 50MA, 1.1695 and 1.1660/1.1640

Resistance: 1.1800, 1.1860/1.1880 and 1.1910 August 02 high

The daily RSI propelling down and the oscillator remains bearish. Our last week’s buy trade sl remains below 1.1640. If average hourly earnings surprise to the downside, there is a scope to develop an inverse H&S pattern on the daily chart, could open to 1.2000 and 1.2050.

Gold and Silver:

Silver re-tested the parallel support finds between $15.60 Dec 20, 2016, low below this $15.30-15.00 exists. The daily RSI is oversold but the oscillator remains bearish. The long-term trendline remains at $14.40.

Resistance seems at 16.10, 16.60 and 17.00

We believe downside risk for Silver is limited in the near term.

Gold also re-tested the parallel support finds at 1242 Oct 07, 2016 low) Thursday’s low point was 1243.85. Below this 1232 earlier weekly swing high and coincides with 200MA (weekly). The long-term ascending trendline finds at 1205 coincides with earlier weekly swing low. Additional support finds at  $1199.

Resistance seems at 1255.00, 1260.00, 1270

In case of upbeat average hourly earnings, we could expect $1210.00 ABC pattern target.

The daily RSI nearly oversold and the oscillator remains bearish.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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