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• NZD/JPY fell to 87.48 on Friday, extending its weekly losses.
• Indicators are dangerously close to oversold conditions, signaling a potential correction.
• Bearish momentum remains intact, with risks of further downside.

The NZD/JPY pair extended its decline on Friday, falling to 87.48 as selling pressure intensified. This marks a continuation of the bearish trend that began earlier in the week, with the pair breaking below key support levels and showing no signs of recovery.

Technical indicators highlight the bearish outlook. The Relative Strength Index (RSI) is now approaching oversold territory, reflecting sustained selling pressure and suggesting that a potential correction may be on the horizon. Similarly, the Moving Average Convergence Divergence (MACD) indicator shows persistent bearish momentum, with steady red bars further reinforcing the downside risks.

For the bulls to regain control, a move back above the 88.00 level would be crucial, followed by a test of the 89.00 area. However, until a reversal is confirmed, the pair remains at risk of further declines, with immediate targets in the 85.00-86.00 range.

NZD/JPY daily chart

• Amazon stock closes 2.94% higher at new all-time high.
• November NFP hits well above expectations on Friday.
• Amazon is still seeing positive vibes from its new AI chip.
• Amazon shares have risen in eight of last nine sessions.

Amazon (AMZN) stock is up for the sixth consecutive session on Friday, a streak that began on November 29. What’s more, AMZN stock has advanced in eight out of the last nine sessions. Since then the world’s largest ecommerce platform has gained 14.1% or nearly $300 billion in market cap.

At the close, Amazon stock advanced 2.94% to $227.03, closing on Friday near the daily high and also new all-time high.

The Dow Jones Industrial Average (DJIA), which includes Amazon among its 30 constituents, traded slightly lower due to the continuing sell-off of UnitedHealth Group (UNH) following the Wednesday slaying of one of its top executives. UNH stock fell as much as 5% earlier in the session, while much of the market got excited over the November Nonfarm Payrolls figure hitting 227K, well above the consensus expectation. The DJIA closed down 0.28%.

Amazon stock news

Amazon’s price rally does not appear to be based on any one thing. AMZN stock has been in an uptrend since at least August 5, about four months ago, and over the longer term since December 2022.

The recent news last week that Amazon has built the second version of a new AI-inflected data center chip is a bright spot. The Trainium2 processor was developed in-house from Annapurna Labs and is said to be four times faster than its earlier iteration.

On Wednesday, Apple (AAPL) said that it expects up to 50% efficiency gains by using the Trainium2 chip to train some of its AI models. It has also been using AWS’ Inferentia and Graviton chips for its search widgets.

Amazon Web Services has also announced new partnerships with PagerDuty (PD) and GitLab (GTLB) to train AI products.

Additionally, Black Friday and Cyber Monday sales are showing that the US consumer is spending at a healthy clip during the holiday season. Adobe Analytics estimated that consumers spent $13.3 billion on Cyber Monday earlier this week. That was 7.3% higher than 2023.
Black Friday sales topped $10.8 billion as well, and Amazon was sure to be a major recipient of that spend.

On Wednesday it came to light that JPMorgan (JPM) and AT&T (T) have halted their advertising on Amazon’s Twitch streaming platform due to complaints alleging that the site is promoting “antisemitic” content.

Amazon stock chart

Amazon stock is looking like the healthiest of the Magnificent 7 coming down the home stretch of 2024. Shares are up 49% year to date, while Nvidia (NVDA) has continued to tread water since its earnings release.

Support rests in the vicinity of $196 or $197, where the 50-day Simple Moving Average (SMA) coincides with the pullback on November 20th and 21st.

After seeing so many up days, it would be likely for consolidation to ensue. However, the Relative Strength Index (RSI) is only at 73, just barely in overbought territory. Any pullback might not get further than the prior range high in November near $215.

AMZN daily stock chart

• The Dow Jones shed another third of a percent to wrap up the trading week.
• US NFP jobs figures came in above expectations, but the US Unemployment Rate also rose.
• Steep losses in key stocks are dragging the Dow Jones lower.

The Dow Jones Industrial Average (DJIA) turned lower on Friday, shedding another 140 points and dragging the equity index into the low end while its major counterparts step higher on better-than-expected Nonfarm Payrolls (NFP) job additions.

The US NFP net jobs count rebounded firmly in November, rising by 227K versus the forecast 220K, recovering from October’s revised 36K. However, the US Unemployment Rate also rose to 4.2% as expected in November, ticking up from the previous month’s 4.1%. The upswing in reported jobless consumers crimped the market’s overall upbeat mood, keeping bullish momentum capped across global equity markets.

Markets have upped their bets of of a 25 bps rate cut from the Federal Reserve (Fed) on December 18. Rate traders piled into odds of at least a quarter-point trim in two weeks, raising them to 85%, with the remaining 15% of betters still banking on a hold call from the Fed.

Dow Jones news

Despite a dip in the headline index, the Dow Jones was roughly balanced on Friday, with half of the board’s listed stocks rising through the day’s trading. However, key losses on the bottom end are dragging down the average headline rating, with the day’s top-performing DJIA-listed stock unable to counteract the backslide.Amazon (AMZN) rose 3% on Friday, pushing above $227 per share as the giant company’s share price continues to rise to record highs.

Unitedhealth Group (UNH) dragged the Dow Jones lower on Friday, tumbling another 5% and falling beneath $550 per share after the CEO of the health giant’s insurance arm, UnitedHealthcare, was gunned down in broad daylight this week in New York. The head of UnitedHealthcare was exiting his hotel early in the morning, heading to a shareholder’s meeting. The chief steward of one of the US’ most prolific claims rejector, with roughly 30% of all health coverage requests being rejected, has become post-humously famous for being the head of the insurance company that intentionally handed over control of client health claims to an AI with a 90% inaccuracy rating.

Dow Jones price forecast

Despite softening further on Friday and dragging the major equity index into a down week, the Dow Jones is trading firmly into bull country and still holding north of 44,500. The DJIA slipped back below the 45,000 major handle this week, but bearish pressure remains tepid at best.

The Dow Jones is still up over 18% YTD, having gained nearly 7.6% in November alone. An extended pullback to the 50-day Exponential Moving Average (EMA) rising through 43,350 will likely see a fresh round of tailwinds as investors remain staunch bidders.

Dow Jones daily chart

• NZD/USD drops sharply on Friday, settling around 0.5830.
• Pair faces strong resistance at the 20-day SMA, which remains unbroken.
• Indicators show weakening buying traction, reinforcing the bearish outlook.

The NZD/USD pair extended its decline on Friday, plunging to 0.5830 after failing to break above the 20-day Simple Moving Average (SMA). This key technical level continues to act as a formidable resistance, preventing a bullish recovery and leaving the pair under significant selling pressure.

Technical indicators reflect the loss of bullish momentum. The Relative Strength Index (RSI) shows a falling trajectory, staying in negative territory, signaling weakening buying traction. Meanwhile, the Moving Average Convergence Divergence (MACD) displays a shrinking histogram with fading green bars, indicating a slowdown in bullish momentum and reinforcing the bearish sentiment.

For now, the outlook remains decidedly bearish, with the 20-day SMA serving as a critical barrier for any upside attempts. Should the selling pressure persist, the pair may target further declines towards the 0.5800 psychological level. On the upside, a decisive break above the 20-day SMA, currently near 0.5880, is necessary to shift momentum in favor of the bulls.

NZD/USD daily chart

Federal Reserve (Fed) Bank of San Francisco President Mary Daly cautioned markets on Friday, warning that despite data still leaning toward the Fed achieving its infaltion goals, the US central bank will still step in with additional rate hikes if price growth begins to spiral once again.

Key highlights

• On Friday, AUD/USD dropped near its August lows at 0.6350, following the release of the US NFP report for November.
• The US jobs report showed a much stronger than expected increase in jobs.
• Rising bets for an early interest rate cut by the Reserve Bank of Australia added bearish pressure on the pair.

The AUD/USD pair experienced significant weakness on Friday, sinking near its August lows at 0.6350 after the release of the US Nonfarm Payrolls (NFP) report for November.

The data showed a much stronger than expected increase in jobs, while rising expectations for an interest rate cut by the Reserve Bank of Australia (RBA) added pressure to the Australian Dollar. Additionally, weaker than expected domestic GDP growth figures further dampened the outlook for AUD/USD.

Daily digest market movers: AUD/USD sinks near August lows after US NFP report

• US Nonfarm Payrolls for November came in at 227,000, far exceeding the previous 12,000 increase and the expected 200,000 figure.
• The Unemployment Rate ticked up to 4.2% from 4.1%.
• Monthly Average Hourly Earnings rose by 0.4%, above the expected 0.3%, steady from the previous 0.4%.
• University of Michigan Consumer Sentiment for December beat estimates at 74.0, improving from 71.8 previously.
• Five-year inflation expectations dropped to 3.1%, down from 3.2% in November.
• Rising bets for an early interest rate cut by the Reserve Bank of Australia contribute to bearish sentiment for AUD/USD.

AUD/USD technical outlook: Bearish outlook with RSI approaching oversold levels

The technical outlook for AUD/USD remains bearish as the pair continues to struggle near its August lows. The Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements, is approaching oversold conditions, signaling severe selling pressure. Similarly, the Moving Average Convergence Divergence (MACD), which tracks the relationship between two exponential moving averages, is also showing bearish dominance. However, these movements might have become overextended, so an upward correction may come.

• DXY trended higher toward 106.00 on Friday.
• November’s NFP report showed a large beat on job creation.
• Sentiment data from December came in strong.

The US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, gained toward 106.00 on Friday, driven by several key movers. The US Dollar remained flat after the release of Nonfarm Payrolls (NFP) data, while markets anticipated a potential December rate cut by the Federal Reserve (Fed).  

The DXY found support at 105.50 and advanced toward 106.00 amidst this news. As a result of anticipation of a rate cut, a dovish stance from the Fed would, in general, cause a decline in the DXY. However, the market is leading to strength in the US Dollar despite this news.

Daily digest market movers: US Dollar sees some gains after NFP data

• The US Dollar Index advanced toward 106.00 as several key factors influenced its movement.
• The NFP surged by a noteworthy 227,000 in November, far exceeding market expectations of 200,000.
• The Unemployment Rate experienced a slight uptick to 4.2% in November.
• Monthly Average Hourly Earnings posted a steady 0.4% gain, meeting the previous month's reading.
• Consumer Sentiment climbed to 74 in December, surpassing market projections.
• The University of Michigan's 5-year Inflation Expectations rate declined to 3.1%.

DXY technical outlook: Bulls fights back, holds 106.00 level

The DXY halted its descent and gained ground today, indicating resilience. This move comes despite profit-taking activity. The index is currently aiming to recover its 20-day Simple Moving Average (SMA), and as long as it remains below there, it could exacerbate its short-term difficulties.

On the other hand, the bullish trend for the DXY remains robust, with resistance points located at 106.50 and 107.00. Support is anticipated within 105.50 to 106.00. 

Federal Reserve (Fed) Bank of Cleveland President Beth Hammack noted that while she believes it may be time for the Fed to begin slowing the pace of rate cuts, the Cleveland Fed head gave a nod to investors who are anticipating at least one more rate cut between now and the end of January. Hammack made her first major policy speech appearance on Friday after taking over the position of President of the Cleveland Fed from Loretta Mester, who retired from the post in June 2024 following a ten year run in the position.

Key highlights

• The Canadian Dollar tumbled nearly nine-tenths of a percent on Friday.
• Canada added more jobs than expected, but the Unemployment Rate lurched higher.
• US NFP numbers also beat the street, but sticky wages keep inflation concerns elevated.

The Canadian Dollar (CAD) tumbled into recent lows on Friday, getting pummeled back into the bottom end after mixed datapoints in both the US and Canada pushed investors back into a cautious stance. Both countries saw higher-than-expected job additions in November, but unemployment rates on both sides of the border ticked higher on a monthly basis as well.

Canada added nearly twice as many jobs as expected in November, setting a seven-month high on monthly job growth. However, the Canadian Unemployment Rate accelerated to its highest level in over three years, shattering investor confidence in the Loonie to wrap up the trading week. Coupled with a broad-market tilt back into the safety of the Greenback after November’s US Nonfarm Payrolls (NFP) report, traders pushed USD/CAD back into its highest bids in almost five years. The pair is poised for its highest daily close since May of 2020.

Daily digest market movers: Canadian Dollar tumbles as Canadian Unemployment Rate soars

• The Canadian Dollar nearly a full percent on Friday, while the Greenback rallied across the board, pushing USD/CAD north of 1.4150.
• Canada added 50.5K net new jobs in November, well above the 25K forecast and climbing even further from October’s 14.5K print.
• Despite the upswing in new jobs, the Canadian Unemployment Rate lurched to 6.8% versus the 6.6% forecast and 6.5% last.
• Canadian Average Hourly Wages also declined sharply, falling to 3.9% YoY from the previous period’s 4.9%.
• US NFP rebounded firmly in November, rising by 227K versus the forecast 220K, recovering from October’s revised 36K.
• The US Unemployment Rate also rose to 4.2% as expected in November, ticking up from the previous month’s 4.1%.

Canadian Dollar price forecast

Friday’s Loonie plunge and comparative Greenback surge has bootstrapped USD/CAD into its highest daily close since May of 2020, bolstering bids into chart territory above 1.4150. A recent upswing into the same region failed to generate a bullish close above near-term consolidative highs, implying CAD short positions have successfully pushed into fresh territory in a meaningful way to round out an otherwise unremarkable trading week.

USD/CAD is now up around 7% for the year, rising 1.1% in December alone. If current market dynamics keep bids on the high side, the pair will be poised to close in the green for a fourth straight month.

USD/CAD daily chart

• The US Dollar strengthened ahead of the weekly close on the back of mixed data.
• The Reserve Bank of Australia will announce its decision on monetary policy next week.
• AUD/USD fell to its lowest since August, maintaining the bearish pressure.

The US Dollar (USD) soared in the last trading session of the week, with the AUD/USD pair falling towards 0.6380, a level last seen in August. Without data releases in Australia, the market focused on the United States (US) macroeconomic developments.

Mixed employment figures initially weighed on the USD, but a better-than-anticipated preliminary estimate of the US Consumer Sentiment Index flipped the coin. The index unexpectedly improved to 74 in December from 71.8 in the previous month, surpassing the expected 73.

Beforehand, the US published the November Nonfarm Payroll (NFP) report. The headline figure showed 227K new jobs were added in the month, higher than the 200K anticipated by market analysts. Also, the Unemployment Rate ticked marginally higher, from 4.1% previously to the expected 4.2%.

The NFP report also showed that the Labor Force Participation Rate edged lower to 62.5%, while the annual wage inflation, as measured by the change in the Average Hourly Earnings, held steady at 4%, coming in above the market forecast of 3.9%. The uptick in inflationary pressures fueled bets of an upcoming December rate cut, now at roughly 83% from 71% on Thursday, according to the CME FedWatch Toll.

Meanwhile, the Reserve Bank of Australia (RBA) will have a monetary policy meeting next week. The central bank will announce its decision, and it is widely anticipated that interest rates will be kept on hold. The Official Cash Rate (OCR) has been steady at 4.35% since November 2023, when the RBA delivered its latest interest rate hike.

Growth in Australia has been tepid, and RBA’s Governor Michele Bullock should take note of that. The earliest a rate cut is expected, however, is February 2025, with mounting bets it could be delayed up to March.

AUD/USD Technical Outlook

The Australian Dollar (AUD) pressures its multi-month lows against the USD. The AUD/USD pair trades around 0.6370, with the next support level at 0.6360, the April 2024 monthly low, followed by 0.6347, the low posted in August. Beyond the latter, market players will likely target the 0.6300 mark.

The former weekly low at 0.6398 provides resistance ahead of the 0.6430 price zone.

• The US Nonfarm Payrolls report showed the economy added 227K new jobs in November.
• The Michigan Consumer Sentiment Index jumped to 74 in December.
• The GBP/USD pair turned negative and approaches 1.2700.

The US Dollar (USD) fell following the release of the United States (US) Nonfarm Payrolls (NFP) report, pushing GBP/USD to a fresh one-month high of 1.2810. According to the US Bureau of Labor Statistics (BLS), the country added 227,000 new job positions in November, beating the 200,000 expected.

Additionally, the Unemployment Rate ticked up to 4.2% in November from 4.1%, meeting expectations. The Labor Force Participation Rate edged lower to 62.5%, while the annual wage inflation, as measured by the change in the Average Hourly Earnings, held steady at 4%, coming in above the market forecast of 3.9%.

The US Dollar, however, trimmed losses and gained momentum after the release of the preliminary estimate of the December US Consumer Sentiment Index, which jumped to 74 from the previous 71.8 while beating the expected 73.

Odds for an interest rate cut from the Federal Reserve (Fed) jumped after US data, pushing stocks and the Greenback higher.

GBP/USD Technical Outlook

The British Pound turned negative against the USD on a daily basis, with the pair hovering around 1.2700. The 200-day Simple Moving Average (SMA) attracted sellers, currently standing at around 1.2820. The 20-day SMA, on the other hand, maintains its bearish slope below the current level at 1.2690, the immediate support en route to the 1.2650 price zone. 

• EUR/USD gives up gains on Friday, settling near 1.0550 after reaching 1.0600.
• Pair remains above the 20-day SMA, keeping the short-term outlook slightly positive.
• RSI stays flat in negative territory, while MACD shows rising green bars, hinting at bullish momentum.

The EUR/USD pair retreated on Friday after briefly testing highs around 1.0600, ending the session near 1.0550 but still holding above the 20-day Simple Moving Average (SMA). This level continues to provide critical support, suggesting that the short-term outlook remains somewhat constructive despite Friday's pullback.

Technical indicators present mixed signals. The Relative Strength Index (RSI) remains points in negative territory, reflecting caution among traders. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator prints rising green bars, signaling gradual bullish momentum. However, the lack of a decisive move higher underscores lingering risks for the pair.

On the upside, the pair faces immediate resistance at 1.0580, with a clear break above the 1.0600 psychological level needed to confirm further gains. On the downside, a sustained move below 1.0550 could open the door to retest support at 1.0530 and potentially revisit the critical 1.0500 level.

EUR/USD daily chart

• USD/CAD jumps to near 1.4100 after the release of the US-Canada employment data for November.
• US NFP came in higher-than-expected and the wage growth remained steady.
• Canadian job growth remained robust and the jobless rate accelerated sharply.

The USD/CAD pair advances to near the round-level resistance of 1.4100 after the release of the labor market data for November from both economies: the United States (US) and Canada.

The US Nonfarm Payrolls (NFP) report showed that 227K fresh workers were added to the labor force, higher than estimates of 200K. The Unemployment Rate accelerated to 4.2%, as expected, higher than the former release of 4.1%.

Meanwhile, Average Hourly Earnings rose steadily by 0.4% and 4% on monthly and annual basis, respectively.

The probability for the Federal Reserve (Fed) to cut interest rates by 25 basis points (bps) has increased sharply to 90% from 71% recorded on Thursday after the release of the US NFP report, according to the CME FedWatch tool.

On the Loonie front, fresh labor addition remained robust in November, while the jobless rate jumped to a record high since September 2021. The economy added 50.5K workers, significantly higher than estimates of 25K and the former release of 14.5K. The Unemployment Rate rose to 6.8%, faster than estimates of 6.6% and the prior reading of 6.5%.

A higher jobless rate would prompt expectations of more outsize interest rate cuts by the Bank of Canada (BoC). The BoC has already reduced its key borrowing rates by 125 basis points (bps) to 3.75%.

• Unemployment Rate in Canada rose at a faster pace than expected in November.
• USD/CAD trades in positive territory near 1.4100 after the data.

The Unemployment Rate in Canada rose to 6.8% in November from 6.5% in October, Statistics Canada reported on Friday. This reading came in above the market expectation of 6.6%.

Other details of the data showed that Net Change in Employment was +50.5K in this period, compared to the market expectation of 25K. Additionally, the participation rate rose to 65.1% from 64.8%, while the Average Hourly Wages rose by 3.9% on a yearly basis.

Market reaction

USD/CAD gained traction following this data and was last seen rising 0.5% on the day at 1.4090.

• EUR/GBP ticks lower as Sterling gains on expectations that the BoE will leave interest rates unchanged in the policy meeting on December 19.
• EC officials see the impact of French political turmoil to be limited on the Eurozone.
• The ECB is expected to cut its Deposit Facility Rate by 25 bps to 3%.

The EUR/GBP pair ticks lower to near 0.8285 in Friday’s North American session after struggling to extend Thursday’s recovery above the key resistance of 0.8300. The cross drops as the Pound Sterling (GBP) performs strongly across the board on expectations that the Bank of England (BoE) will be among those central banks whose policy-easing cycle will be slowest.

Financial market participants expect the BoE to follow a gradual rate-cut approach on the assumption that price pressures in the United Kingdom (UK) economy are persistent. At the Global Boardroom event organized by the Financial Times (FT) on Thursday, BoE Monetary Policy Committee (MPC) external member Megan Greene said, “I suspect we'll hit our inflation target by the end of our forecast period, which is three years.”

While the UK economic calendar has nothing much to offer in a period of a week, the British currency is expected to be influenced by the market expectations for the BoE likely interest rate decision on December 19. Traders expect the BoE to leave interest rates unchanged by 4.75%.

Meanwhile, the Euro (EUR) rebounded after the European Commission spokesman Balazs Ujavri commented that the impact of French political turmoil would be limited and contained. "We follow very closely what is going on in France,” and "What we see for now is that the economic effect is rather contained and limited. The macroeconomic situation in France remains stable," Ujavri said, Reuters reported.

Michel Barnier’s government in the French economy collapsed after losing the no-confidence vote, which was proposed by the Far Right and the Left-wing.

However, the Euro’s upside remains limited as the European Central Bank (ECB) is widely anticipated to cut interest rates in its policy meeting on Thursday. Traders expect the ECB to cut is Deposit Facility Rate by 25 basis points (bps) to 3%.

• Silver rally loses momentum with bulls capped right below the last two weeks' range top, at $31,45.
• The Dollar has steadied with investors awaiting the release of the US employment report.
• XAG/USD: Above $31.40, the next target is the November 7 high, at $32.15.

Silver (XAG/USD) rally from last week’s lows near $30.00 has been capped at the top of the last two week’s horizontal channel, at 31.15, with investors awaiting the release of November’s US employment data.

The US economy is expected to have created 200,000 new jobs in the month, while the unemployment rate ticked up to 4.2%. This latter data and softer wage inflation are likely to keep hopes of December rate cuts alive.

On Thursday, the weekly jobless claims showed a larger-than-expected increase in the last week of November. This, coupled with below-consensus ADP employment figures seen on Wednesday, has cast some doubt about the NFP reading and increased pressure on the USD.

The technical picture shows the bullish momentum losing steam, with the 4-hour RSI turning down towards the 50 level and bulls capped below the mentioned $31.45. Above here, the next target is the November, 7 high, at 32.15. Supports are $30.90 and $30.45 (Dec 5 and 4 lows respectively)

XAG/USD 4-hour Chart

The CME Group intends to start trading a Gold futures contract worth one ounce from mid-January 2025, Commerzbank’s commodity analyst Carsten Fritsch notes.

Even smaller futures contracts to provide tailwind for the Gold price

“This is intended to address the growing interest of retail investors. These mainly invest in bars and coins in physical form as well as in Gold ETFs. Investments in futures contracts have so far been difficult due to the high costs of doing so. This is because a Gold future on the Comex has a lot size of 100 ounces. For this, $11,500 must currently be deposited as margin.”

“A micro Gold futures contract, which is one tenth the size of a conventional Gold future, has been launched by the CME in October 2010 and enjoyed strong demand when the Gold price rose in September.”

“It is quite conceivable that trading in cfurther increase demand from retail investors and provide a tailwind for the Gold price.”

The Canadian Dollar (CAD) is a little softer but still holding well within recent ranges, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Weak trend momentum supports more sideways trading

“The street’s consensus for the Canadian jobs report is the standard +25k gain for November (note Scotia at +20K), with a nudge up in the unemployment rate to 6.6%, from 6.5% in October. Under the hood of October’s 14.5k gain in jobs, the details showed a solid rise in full-time work plus still elevated wages (4.7% Y/Y).”

“The loosening in the labour market implied by the steady rise in the unemployment rate is what BoC policymakers are focused on, however, and the November data is expected to equal the recent cycle high of 6.6% seen in August. Soft data will raise market expectations that the BoC will opt for a more aggressive rate cut next week.”

“Swaps are pricing in around 40bps of easing risk now. Range trading persists. Weak trend momentum supports more sideways trading between support at 1.3890/00 and resistance at 1.4090/00 in the short run.”

On Thursday, the World Gold Council (WGC) published data on changes in gold ETFs in November. For the first time since April, there were net outflows again, amounting to 28.6 tons. The vast majority, namely 26 tons, occurred in ETFs listed in Europe, Commerzbank’s commodity analyst Carsten Fritsch notes.

ETF changes in November correspond with the price trend

“The strongest outflows were registered in Germany and the United Kingdom. The WGC attributes this to weaker economic data, concerns about trade tariffs imposed by the future Trump administration, uncertainty about the path of central banks, a greater risk appetite on the financial markets and the weakness of the euro and pound against the US Dollar (USD).”

“However, in our opinion, the first three factors mentioned above could just as easily have been in favour of ETF inflows. In the US, there were outflows in the first half of November, followed by inflows in the second half of the month, so that the monthly change was negligible. It is notable that the world's largest gold ETF recorded outflows. This was offset by almost identical inflows into another ETF.”

“The election victory of Donald Trump therefore had no serious negative impact on ETF demand in the US. There were smaller outflows in Asia, bringing a series of 20 months of net inflows to an end. The ETF changes in November corresponded with the price trend. Last month, the gold price recorded its sharpest monthly decline in more than a year, with the price weakness occurring mainly in the first half of the month.”

The BoE’s Decision Maker Panel boosted year ahead inflation expectations to 2.8% in November, from October’s 2.5%, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Short-term bull momentum on the intraday chart strengthens

“The MPC’s Dhingra, a dove, warned that tight policy is damaging the UK economy. But the uptick in inflation expectations will bolster the broader caution on the rate outlook reflected in comments from other BoE policymakers recently.”

“Cable also moved to test noted resistance at 1.2770 precisely yesterday, without showing signs of strengthening further. The pound remains close to break out resistance this morning and has the added support of strengthening, short-term bull momentum on the intraday chart.”

“Like the EUR, though, a move needs to come sooner rather than later now. Otherwise, spot risks dropping back to trend support at 1.2675/80.”

• The US Dollar trades flat ahead of Nonfarm Payrolls, the most important US data release this week. 
• Traders will be on edge over job creation numbers to gauge the chances of another interest-rate cut by the Fed this month. 
• The US Dollar Index (DXY) resides near a one-week low at 105.75.

The US Dollar (USD) trades broadly flat on Friday ahead of the important Nonfarm Payrolls (NFP) number for November, a key indicator to gauge the health of the US labor market. Expectations of job growth have been tuned down in recent days after several Purchasing Manager Index (PMI) readings came in at or below expectations. 

The employment component from the Institute for Supply Management (ISM) in both the Manufacturing and Services sectors did not portray a rosy picture ahead of the US Jobs Report. Still, market consensus points to an increase of 200,000 jobs, rebounding sharply from the meager 12,000 jobs created in October, when hurricanes and strikes distorted the figures.

Besides the Nonfarm Payrolls print, the Unemployment Rate and the Monthly Average Hourly Earnings number (all part of the same jobs report) also have the potential to move markets. Friday will end with the University of Michigan preliminary Consumer Sentiment Index reading and with four Federal Reserve officials making appearances. 

Daily digest market movers: Survey ranges too elevated

• At 13:30 GMT, the US Jobs Report for November will be released:
  • The Nonfarm Payrolls print is expected to come in at 200,000 against the previous 12,000 increase. The estimates vary from 135,000 on the downside to 252,000 on the upside. Any number smaller than the downside estimate will trigger a weaker US Dollar, while any number above the upside consensus will trigger substantial US Dollar strength. 
  • The Unemployment Rate is expected to tick up to 4.2% from 4.1%.
  • The Monthly Average Hourly Earnings number is expected to ease to 0.3% from 0.4%.
• At 15:00 GMT, the University of Michigan will deliver its preliminary reading for December:
  • Consumer Sentiment is expected to tick up to 73 from 71.8 previously. 
  • The 5-year inflation expectations rate has no consensus view and stood at 3.2% in November. 
• A slew of Fed speakers will take the stage:
  • Near 14:15 GMT, comments are expected from Federal Reserve Governor Michelle Bowman, who participates in a virtual conversation at the Missouri Bankers Association Executive Management Conference.
  • At 15:30 GMT, Federal Reserve Bank of Chicago President Austan Goolsbee participates in a fireside chat at the 38th Economic Outlook Symposium organized by the Chicago Fed.
  • Around 17:00 GMT, comments are expected from Federal Reserve Bank of Cleveland President Beth Hammack who delivers remarks about the US economic outlook at an event organized by the City Club of Cleveland.
  • Federal Reserve Bank of San Francisco President Mary Daly will be the last Fed speaker this Friday at 18:00 GMT, participating in a moderated conversation and Q&A session at an event hosted by Stanford University's Hoover Institution.
• Equities are struggling this Friday, looking for direction with very small gains or losses for most major European indices. US futures are trading flat. 
• The CME FedWatch Tool is pricing in another 25 basis points (bps) rate cut by the Fed at the December 18 meeting by 70.1%. A 29.9% chance is for rates to remain unchanged. The Fed Minutes and recent comments from several Fed officials have helped the rate cut odds for December to move higher. 
• The US 10-year benchmark rate trades at 4.18%, on the downside in this week’s range between 4.16% and 4.28%.

US Dollar Index Technical Analysis: It was never going to be a straight line

The US Dollar Index (DXY) is back to where it was roughly one month ago after retreating since it tried to topple the 108.00 level. The risk with the Nonfarm Payrolls print is that, if the number is far below estimates, the DXY could fall back all the way to pre-election levels at 104.25. 

On the upside, 106.52 (April 16 high) is apparently a hard nut to crack as a first resistance after failing to close above it this week after several attempts. Should the US Dollar bulls reclaim that level, 107.00 (round level) and 107.35 (October 3, 2023, high) are back on target for a retest. 

Looking down,  the pivotal level at 105.53 (April 11 high) comes into play before heading into the 104-region. Should the DXY fall all the way towards 104.00, the big figure and the 200-day Simple Moving Average at 104.03 should catch any falling knife formation. 

US Dollar Index: Daily Chart

A rebound in French markets following this week’s political turmoil has done little for the EUR, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Spot remains well-supported near the highs

“Markets note Eurozone wage growth eased in Q3, giving the ECB policy hawks a path to support a 25bps rate cut next Thursday. A 1/4-point rate ease is fully priced in (swaps reflect around 26bps of anticipated easing).”

“December seasonals for the EUR are strongly positive, however, and declining political risk should give the EUR an opportunity to stabilize or firm a little more in the short run. The EUR rose to challenge short-term resistance and potential bull break out trigger at 1.0590 yesterday but failed to push on.”

“Spot remains well-supported near the highs this morning and price signals continue to lean bullish on the short-term chart as bullish trend momentum strengthens a little. A push above 1.0590/00, which could drive a squeeze to the mid/ upper 1.06s, at least, needs to come soon though. Support is 1.0515/20.”

The US Dollar (USD) is tracking a little higher ahead of the US jobs report. After losing ground broadly on Thursday, markets baulked at pushing the USD more significantly lower (and through some key support points) ahead of the jobs data, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

USD broadly higher into the latest jobs report

“USD gains through the overnight session are concentrated in the AUD and NZD. Reports indicating that President-elect Trump had nominated David Perdue as his China ambassador may have weighed on sentiment for both. The CNY is down slightly on the session as well. But Perdue brings a lot of business experience in the region and a has taken a co-operative stance on China relations in the past. A solid rise in Japan’s base wage data in October boosted BoJ rate hike expectations but did nothing for the JPY which softened 0.3% on the session. Renewed volatility in the KRW overnight may be a factor in regional FX volatility.”

“In Europe, meanwhile, French assets continue to recover from this week’s chop; the CAC 40 is up 1.4% and OATs are outperforming Bunds by 3-4 bps. US Non-Farm Payrolls are expected to rebound from October’s soft 12k rise, with the street looking for a 220k gain, according to the Bloomberg consensus. The ‘whisper’ number is closely aligned with expectations (217k). There were significant downward revisions to the prior two months’ data with the October release (-111k), however, and an upward revision to the weather-affected October data will be expected today.”

“But another disappointing overall report will pose a challenge for Fed policymakers, some of whom have expressed concern about stalled progress on inflation in recent months. Swaps are pricing in 16-17bps of easing for this month’s policy decision currently. Beyond the data, the USD remains prone to some seasonal softness. A solid jobs report may lift the DXY back to the mid-106s. A disappointing outcome may drive the index towards support at 105.30.”

The Gold price stabilized at $2,650 per troy ounce after falling in November, Commerzbank’s commodity analyst Barbara Lambrecht notes.

Gold price stabilizes at $2,650

“Today's US labor market data could influence interest rate expectations for the Fed meeting on 18 December yet again. If a rate cut in the event of disappointing labour market data were fully priced in – currently the probability is only 75% based on Fed Funds Futures – the Gold price could rise.”

“After that, the so-called ‘blackout period’ for Fed members and their statements on interest rate expectations begins on Saturday. So, barring a further escalation of geopolitical risks, the Gold price is likely to tread water again. The ECB meeting next week is not likely to have much impact on the Gold price, as another interest rate cut is already priced in.”

• The Dollar ticks up with investors bracing for the US NFP report.
• US employment data is expected to confirm expectations that the Fed will cut rates by 25 basis points in December.
• Monetary divergence between the BoJ and the Fed has been buoying the yen over the last weeks.

The US Dollar is appreciating against its main peers on Friday, with investors closing Dollar lows ahead of the release of November’s Nonfarm Payrolls report.

The USD/JPY has bounced from the 149.75 area to retrace Thursday’s losses and return to the upper range of the 150.00s. The Broader trrend remains bearish, with the pair 3.5% below mid-November highs, amid the divergent monetary policy expectations of the Fed and the BoJ.

The focus today is on the US Nonfarm Payrolls report. The US economy is expected to have added 200,000 new jobs in November, with the unemployment rate ticking up to 4.2%.

Investors expect strong job creation, with higher unemployment and softer wage pressures, to cement hopes that the Fed will cut rates by a 25 bps cut in two weeks. Any deviation from these figures might boost volatility on US Dollar crosses.

In Japan, the market consensus anticipates a 25 bps hike later this month. That said, the dovish comments by board member Nakamura on Thursday have cast some doubts on the final decision, weighing on the Yen.
 

Oil prices reacted to yesterday's OPEC+ decisions with slight losses. The Brent oil price slipped below the USD 72 per barrel mark in the morning, Commerzbank’s commodity analyst Carsten Fritsch notes.

Thursday's OPEC+ decisions don’t shake oil markets

“The postponement of the planned production increase by a further three months had been expected. However, it came as something of a surprise that the reversal of the voluntary production cuts of 2.2 million barrels per day planned from April is set to take place over a longer period than previously thought. In addition, the voluntary cuts of 1.65 million barrels per day in place since April 2023 were extended by one year until the end of 2026.”

“This can be seen as an acknowledgement by OPEC+ that the room for increasing oil supply is very limited. Even with yesterday's decisions, the oil market is likely to be oversupplied next year because global oil demand is likely to rise less strongly than supply outside OPEC+. As a result, there is no additional need for oil from OPEC+ on the oil market.”

“However, this would change if the supply of oil from Iran and Venezuela were to fall significantly as a result of tighter US sanctions. In this case, the currently emerging supply surplus of around 1 million barrels per day could quickly evaporate. This risk does not seem to be sufficiently taken into account by the market at present, which is why we expect the oil price to rise next year.”

The head of Russia's largest oil company says that the production cuts by OPEC+ in 2016 and 2020 have strengthened the US shale oil industry and enabled the US to become a leading oil exporter, Commerzbank’s commodity analyst Carsten Fritsch notes.

OPEC+ cut policy strengthens US shale oil industry

“According to the head of Russia's largest oil company, the production cuts by OPEC+ in 2016 and 2020 have strengthened the US shale oil industry and enabled the US to become a leading oil exporter. This could be seen as a criticism of OPEC+'s current strategy of stabilising the oil market by restricting oil supply, because other producers would then step into the breach and take market share from OPEC+.”

“Exactly ten years ago, an attempt was made to adopt a different strategy, with limited success. At the time, OPEC decided to flood the market with oil from the beginning of 2015 at the initiative of Saudi Arabia in order to squeeze US shale oil producers out of the market with lower prices. However, the costs for the OPEC countries in the form of lost revenue were so high that they reverted to a policy of limiting supply at the end of 2016 and formed OPEC+.”

“As US shale oil producers have since succeeded in significantly reducing their costs and increasing productivity, they are now able to produce profitably at lower oil prices compared to ten years ago. This is also why OPEC+ is now facing the problem that the head of the Russian oil company indirectly referred to.”

• The Mexican Peso is trading moderately lower with investors bracing for the US employment reading.
• Weak US macroeconomic data and some hawkish comments by Banxico’s deputy Governor have buoyed the MXN this week.
• Technically, USD/MXN’s double top at 20.80 suggests the possibility of a deeper correction.
   

The Mexican Peso (MXN) is trading with moderate losses on Friday against the US Dollar. The USD/MXN pair ticks up after having declined for the last three days, with investors wary of betting against the US Dollar (USD) ahead of the release of November’s US Nonfarm Payrolls report at 13:30 GMT.

Data released on Thursday showed that claims for unemployment benefits in the US increased beyond expectations last week. This, coupled with the lower-than-expected increase in the ADP private-employment gauge, has been weighing on the US Dollar across the board.

In Mexico, Banxico Deputy Governor Irene Espinosa warned against too-aggressive interest-rate cuts considering that an increase in the minimum wage will exert upside pressure on inflation. This has provided some support to the MXN.

Daily digest market movers: Mexican Peso rally halts

• According to a survey from Citi Mexico, most of the economists polled see the Mexican central bank cutting interest rates by 25 basis points in December, with GDP growing by 1.5% in 2024 and by 1% in 2025.
   
• In the US, Nonfarm payrolls are expected to have increased by 200,000 in November, while the unemployment rate is also expected to tick up to 4.2%. These figures support the view of a 25 bps Fed rate cut in December and gradual easing in 2025.
   
• Earlier this week, Federal Reserve (Fed) chairman, Jerome Powell, highlighted the stress of the US economy and reiterated that the bank should be cautious about rate cuts. These comments suggest that the bank’s easing cycle might target a higher terminal rate than previously anticipated.
   
• The CME Group’s Fed Watch tool shows an almost 70% chance of a 25 bps rate cut in December and two more cuts in 2025.

Mexican Peso technical outlook: USD/MXN tests support at 20.15

The immediate bias for USD/MXN  is negative as it has retreated from the late November highs at around 20.80. However,  the pair is also facing a strong support area between 20.05 and 20.15.

The 4-hour Relative Strength Index (RSI) is in bearish territory at around 38, and the double top at 20.80 suggests the possibility of a deeper correction.

Below the 20.00 psychological level, which is also the neckline of the mentioned double top, the next target would be November´s low at 19.75. Resistances are the December 2 high, at 20.60 and November’s peak, at 20.80.

USD/MXN 4-Hour Chart

 

• Oil prices are on the back foot on Friday for a third consecutive day, flirting with a possible break lower. 
• OPEC+ decision to delay output normalization by three months failed to convince markets.
• The US Dollar Index dips to a near one-week low ahead of the US Nonfarm Payrolls release. 

Crude Oil dips below $68.00 on Friday as selling pressure persists once  OPEC+ has officially confirmed it will only delay its output normalization schedule by three months. That was the consensus view of markets, and investors took it as far too little in order to solve the current supply glut that is flooding the Oil market. 

The US Dollar Index (DXY) – which measures the performance of the US Dollar (USD) against a basket of currencies – is trading steady ahead of the US Jobs Report this Friday. Expectations of job growth have tempered a little bit after earlier this week several economic data points linked to employment were not sending a solid signal to markets. The Federal Reserve (Fed) will be present as well in today’s economic calendar with four Fed speakers scheduled throughout the day. 

At the time of writing, Crude Oil (WTI) trades at $67.77 and Brent Crude at $71.56.

Oil news and market movers: OPEC+ assumes too much

• The recent OPEC+ decision to delay a revival of supply to April will pare global Oil output next year, tightening balances somewhat, but a glut is still widely expected, according to banks and industry consultants, Bloomberg reports. 
• Oil flows from Russia via the Druzhba pipeline into the Czech Republic have restarted, according to Orlen SA, a refinery operator, Bloomberg reports. 
• OPEC+ pointed in its assessment to President-elect Donald Trump, who is expected to slap more sanctions on Venezuela and Iran over their Oil exports, which should resolve a portion of the oversupply. 
• The weekly Baker Hughes US Oil Rig Count is due at 18:00 GMT. The expectation is for a small uptick to 478 from 477 in last week’s count. 

Oil Technical Analysis: This will not resolve itself

Crude Oil price looks set for more downturn with OPEC+ unable to firmly address the issue of oversupply coming from non-OPEC+ countries. President-elect Donald Trump clearly is a key element in the OPEC+ assessment as he has vowed to drill more Oil than ever and promised to issue more Oil embargoes against Venezuela and Iran. OPEC+ seems to be forgetting that one will outweigh the other, and that the current sluggish economic global growth isn’t likely to absorb the persistent oversupply. 

The 55-day Simple Moving Average (SMA) at $70.11 triggered a firm rejection on Wednesday which is still playing out. Should tensions in the Middle East flare up, $71.46 with the 100-day SMA at $71.54 will act as thick resistance. In case Oil traders can plough through that level, $75.27 is up next as a pivotal level. 

On the other side, traders see $67.12 – a level that held the price in May and June 2023 – as the last man standing. In case that breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.

US WTI Crude Oil: Daily Chart

The Bank of Japan (BoJ) talks a lot about how it would like to continue raising interest rates, which are still at a very low level in Japan of currently 0.25%. Its hopes are pinned on inflation, which has recently remained above 2%, at least in terms of the overall rate. Accordingly, high wage increases from both the cost and demand side will fuel inflation, at least in the service sector, to such an extent that the 2% will be reached and the key interest rate can be raised further, Commerzbank’s FX analyst Volkmar Baur notes.

BoJ seems willing to raise interest rates again

“Data released this morning shows that this wage development is not yet playing along properly. In nominal terms, the 2.6% increase in wages looks quite reasonable. However, when adjusted for inflation, real wages and thus purchasing power did not increase year-on-year. In the longer term, we see that real wages in recent years have been on a downward trend similar to that seen in the years of zero inflation, so that, at least for the time being, there is little hope of a turnaround in this direction.”

“And looking ahead, there is little reason to believe that wages will soon start to develop a stronger, self-sustaining dynamic. With regard to the separation rate, it can be seen that in recent months significantly fewer Japanese have quit their jobs to look for a better-paid one (Figure 2). While this trend rose continuously from 2020 until the end of last year, it is already falling again this year and is even below 2019 levels.”

“All in all, I see little reason to expect sustained higher inflation in Japan based on these wage growth figures. However, since the Bank of Japan seems willing to raise interest rates again, it should probably do so this year (on December 19) or at its next meeting in January. After that, the window for a rate hike is likely to close. In the short term, the JPY should therefore remain supported, but a renewed weakness is to be expected in the coming year.”

• The EUR/USD pair’s recovery halts with investors growing cautious ahead of the release of the US Nonfarm Payrolls report.
• The uncertain political situation in France, with President Macron into question, is likely to weigh on the Euro.
• In the US, above-expectations Jobless Claims and weak services activity data added pressure to the US Dollar in previous sessions.

The EUR/USD pair trades broadly unchanged on Friday after the rebound from Wednesday’s lows has stalled below the 1.0600 resistance area. The ongoing political turmoil in France is keeping investors on edge while cautiousness ahead of the US Nonfarm Payrolls (NFP) report release is providing some support to the US Dollar (USD).

The Greenback went through some selling on Thursday amid a positive risk sentiment and a higher-than-expected increase in weekly Jobless Claims.

These figures come after a raft of disappointing figures related to the performance of the US services sector and below estimations ADP employment data, adding to the selling pressure on the US Dollar.

Daily digest market movers: Euro hesitates as France’ political uncertainty weighs

• An increasingly questioned French President, Emmanuel Macron, has taken the difficult task of finding a prime minister in the context of a strongly divided parliament and far-right candidate Marine Le Pen breathing on his neck. While markets have become increasingly relaxed about France’s debt risk, the scenario isn’t the best for a significant Euro (EUR) recovery. 
   
• In the US, Nonfarm Payrolls are expected to have increased by 200,000 in November, sharply up from the 12,000 reading in October when hurricanes and strikes impacted heavily on employment.
   
• The second reading of the Eurozone’s Q3 GDP has confirmed that the economy grew at a 0.4% pace compared with the previous quarter, and by 0.9% yearly, as previously estimated.
   
• The US Unemployment Rate is expected to have ticked up to 4.2% from the previous 4.1%, which will keep hopes of a Federal Reserve (Fed) 25 basis points (bps) interest-rate cut in December.
   
• Data released on Thursday showed that US Weekly Jobless Claims increased by 224K, accelerating from the upwardly revised 215K seen a week earlier. This, together with the weaker-than-expected ADP report on Wednesday, has cast some doubts about the strength of Friday’s Payrolls report.
   
• Fed Chairman Jerome Powell stated earlier this week that the US economy is stronger than what central bank policymakers had expected when they started cutting rates. The Fed chief reiterated the cautious approach to monetary easing and said that interest rate cuts will be gradual.
   

  US Dollar PRICE Today

  The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

  	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
  USD		0.05%	-0.05%	0.33%	0.10%	0.48%	0.66%	-0.08%
  EUR	-0.05%		-0.10%	0.29%	0.05%	0.42%	0.61%	-0.14%
  GBP	0.05%	0.10%		0.35%	0.15%	0.52%	0.70%	-0.04%
  JPY	-0.33%	-0.29%	-0.35%		-0.22%	0.15%	0.32%	-0.41%
  CAD	-0.10%	-0.05%	-0.15%	0.22%		0.37%	0.56%	-0.19%
  AUD	-0.48%	-0.42%	-0.52%	-0.15%	-0.37%		0.18%	-0.58%
  NZD	-0.66%	-0.61%	-0.70%	-0.32%	-0.56%	-0.18%		-0.75%
  CHF	0.08%	0.14%	0.04%	0.41%	0.19%	0.58%	0.75%

  The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

   

Technical analysis: EUR/USD faces resistance at 1.0600

The immediate EUR/USD bias is positive, with the pair bouncing up from week lows at 1.0475 lows. Still, the 1.0600 resistance area is likely to be a tough one after bulls have recently been capped when trying to overcome it.

The pair would need a downbeat NFP report to break the mentioned 1.0600 and shift the focus toward the mid-November highs at 1.0650-1.0660.

On the contrary, strong US employment data would give a fresh boost to the US Dollar, pushing the EUR/USD pair towards 1.0470 ahead of 1.0420.

EUR/USD 4-hour Chart

US Dollar (USD) is expected to trade in a 7.2550/7.2800 range. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD to probably trade between 7.2400 and 7.2900

24-HOUR VIEW: “Following USD sharp pullback two days ago, we noted yesterday that ‘the decline appears to be running ahead of itself, and USD is unlikely to weaken much further.’ We expected USD to ‘trade in a 7.2630/7.2930 range.’ USD subsequently traded in a narrower range than expected (7.2631/7.2859). There has been no increase in either downward or upward momentum, and we continue to expect range trading, most likely between 7.2550 and 7.2800.”

1-3 WEEKS VIEW: “We turned positive in USD on Tuesday (03 Dec, spot at 7.2880), indicating the ‘rapid increase in momentum could lead to USD rising to 7.3115.’ After USD rose to 7.3145 and then pulled back sharply, we indicated yesterday (Thursday) that ‘upward momentum has slowed with the sharp pullback.’ We added, ‘if USD breaks below 7.2630 (no change in ‘strong support’ level), it would mean that it is not rising further.’ USD eased to a low of 7.2631 in NY trading. While our ‘strong support’ level has not been clearly breached yet, upward momentum has largely faded. The current price movements are likely part of range trading, probably between 7.2400 and 7.2900.”

OPEC+ decides to extend its additional voluntary supply cuts of 2.2m b/d by a further three months, ING’s commodity analyst Warren Patterson notes.

The market seems somewhat disappointed

“OPEC+ members decided yesterday to extend their additional voluntary supply cuts of 2.2m b/d by a further three months. It means the group is now currently set to gradually increase supply from only April 2025.”

“In addition to a further delay in bringing supply back, members will also bring this supply back at a slower pace. Previously, the group were set to bring 2.2m b/d of supply back online over the course of 12 months. However, members will now bring this supply back over the course of 18 months. So, this full supply is scheduled to return by September 2026.”

“The market seemed somewhat disappointed or at least indifferent to the extension with ICE Brent settling 0.3% lower on the day, leaving it just above US$72/bbl. This suggests that the market was expecting a more aggressive move from OPEC+.”

• NZD/USD plunges below 0.5850 amid dismal risk tone and firm RBNZ dovish bets.
• The US Dollar edges higher ahead of the US NFP data for November.
• Economists estimate the US jobless rate to have accelerated to 4.2%.

The NZD/USD pair plummets below the key support of 0.5850 in European trading hours on Friday. The Kiwi pair plunges as the New Zealand Dollar (NZD) weakens across the board amid firm expectations that the Reserve Bank of New Zealand (RBNZ) will follow an aggressive policy-easing approach.

The RBNZ reduced its Official Cash Rate (OCR) by 50 basis points (bps) to 4.25% in its monetary policy meeting on November 27 and guided for similar rate cut pace if economic conditions continue to evolve as projected. Traders are also confident the RBNZ will cut its OCR again by 50 bps to 3.75% in the February policy meeting.

Meanwhile, cautious market mood ahead of the United States (US) Nonfarm Payrolls (NFP) data release has also weighed on the Kiwi dollar. S&P 500 futures exhibit a subdued performance in European session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher from the key support of 105.70.

The US NFP data will influence market expectations about whether the Federal Reserve (Fed) will cut interest rates again in the policy meeting on December 18. The Fed has already reduced its key borrowing rates by 75 bps in its meetings in September and November.

Economists expect the US economy added 200K fresh workers, significantly higher than 12K in October. Payrolls were significantly lower last month as some industries were affected by the hurricanes and there were labor strikes at Boeing plants. The Unemployment Rate is estimated to have accelerated to 4.2% from the former release of 4.1%.

The US Dollar (USD) is expected to consolidate in 149.65/150.65 range. In the longer run, USD weakness appears to have stabilised; it is likely to trade in a range of 148.65/152.00 for now, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD weakness appears to have stabilised

24-HOUR VIEW: “On Wednesday, USD rose to 151.22, and then pulled back. Yesterday (Thursday), when USD was at 150.35, we highlighted that ‘the pullback from the high could extend below 149.65 before stabilisation can be expected.’ Our view was not wrong, as USD dropped to 149.64, recovering to close at 150.08 (-0.35%). USD appears to have entered a consolidation phase. Today, we expect USD to trade in a 149.65/150.65 range.”

1-3 WEEKS VIEW: “After holding a negative view in USD for two weeks, we revised our outlook to neutral yesterday (05 Dec, spot at 150.35). We indicated that ‘USD weakness appears to have stabilised.’ We also indicated that ‘the current price movements are likely the early stages of a range trading phase, probably between 148.65 and 152.00.’ Our expectations remain unchanged.

• USD/CAD moves higher to near 1.4040 as the US Dollar gains ahead of the US Nonfarm Payrolls data.
• Investors expect the Fed to cut interest rates by 25 bps in the monetary policy meeting on December 18
• The Canadian economy is estimated to have added fresh 25K workers in November.

The USD/CAD pair gains to near 1.4040 in European trading hours on Friday. The Loonie pair rises as the US Dollar (USD) moves higher ahead of the United States (US) Nonfarm Payrolls (NFP) data for November, which will be published at 13:30 GMT. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, steadies above the immediate support of 105.70.

The labor market data will significantly influence market expectations for the Federal Reserve (Fed) interest rate action in the policy meeting on December 18. Economists expect the US economy to have added fresh 200K workers in November. The Unemployment Rate is seen higher at 4.2% from the former reading of 4.1%.

Higher-than-expected payrolls data would point to improving labor market conditions, which could dampen Federal Reserve (Fed) rate cut bets for the upcoming meeting, given that traders see a 67% chance favoring an interest rate reduction by 25 basis points (bps) to 4.25%-4.50%, according to the CME FedWatch tool. On the contrary, weak employment numbers would boost the same.

Investors will also focus on the US Average Hourly Earnings data, a key measure of wage growth. The wage growth measure is estimated to have grown by 3.9%, slower than 4% in October on a year-on-year basis.

Meanwhile, the Canadian Dollar (CAD) will also be influenced by the official employment data that will release alongwith the US NFP report. The Canadian employment report is expected to show that that the labor market saw fresh addition of 25K workers, higher than the former release of 14.5K. The Unemployment Rate rose to 6.6% from 6.5%.

National Bank of Poland Governor Adam Glapiński once again managed to surprise the markets big time. Pricing of the first cut has moved to mid-year with 100bp overall next year, which may come under pressure today again, ING’s FX analyst Frantisek Taborsky notes.

Pricing of the first cut moves to mid-year

“The main conclusion from the press conference is that, according to the Monetary Policy Council, extending the energy price freeze next year would result in an unfreezing in the fourth quarter of 2025, introducing a later inflation risk. This postpones the return of inflation to the central bank's target by six months compared to the baseline scenario in the NBP's November projection, delaying the start of its easing cycle.”

“Our economists were expecting the first rate cut in May and 100bp in 2025, significantly less than market pricing ahead of the press conference – but even this scenario now seems optimistic. At the same time, the global story is moving in a dovish direction, which will make it difficult for the NBP to resist rate cuts for very long amid easing from other central banks.”

“For now, however, the market reaction to this hawkish shift is more important – and although we expected some tactical gains in the zloty yesterday, this NBP message may make them more permanent. Pricing of the first cut has moved to mid-year with 100bp overall next year, which may come under pressure today again. The jump in the rate differential suggests levels at 4.260 EUR/PLN, a key level this year. We are likely to see it tested today.”

The New Zealand Dollar (NZD) is likely to trade in a higher range of 0.5860/0.5900. In the longer run, NZD is expected to trade in a 0.5830/0.5930 range, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD can test the 0.5830 support near term

24-HOUR VIEW: “Yesterday, we expected NZD to ‘trade in a 0.5830/0.5890 range.’ NZD then traded between 0.5849 and 0.5887, closing at 0.5885. Although the underlying tone appears to have firmed slightly, this is likely to lead to a higher trading range of 0.5860/0.5900 instead of a sustained rise.”

1-3 WEEKS VIEW: “Our update from yesterday (05 Dec, spot at 0.5860) is still valid. As highlighted, although NZD dropped to a low of 0.5830 two days ago, there does not appear to have enough momentum to break clearly below 0.5830.” We continue to hold the view that NZD “is expected to trade in a 05830/0.5930 range.”

• Gold price bounces back and moves higher ahead of the US NFP data for November, which will influence market expectations for the Fed’s interest-rate path.
• Traders lean toward the Fed reducing interest rates by 25 basis points on December 18.
• The violation of truce terms between Israel and Hezbollah has reignited tensions in the Middle East, providing further support to Gold.

Gold price (XAU/USD) recovers intraday losses and edges higher to around$2,640 in European trading hours on Friday ahead of the United States (US) Nonfarm Payrolls (NFP) data for November, a key release to get more cues about which direction US interest rates could be heading to.

The impact of the US labor market data on the Federal Reserve’s (Fed) likely interest rate action in the policy meeting on December 18 will be significant as officials became more focused on preserving labor demand when the central bank started reducing its key borrowing rates in September. The data will be released at 13:30 GMT.

According to the CME FedWatch tool, there is a 72% chance that the Fed will reduce interest rates by 25 basis points (bps) to 4.25%-4.50% this month, while the rest supports leaving interest rates unchanged.

Lower interest rates are positive for Gold because they reduce the opportunity cost of holding the non-interest-paying asset. 

Economists expect the US economy to have added 200K fresh workers, significantly higher than 12K in October. The prior month’s NFP report stated that payroll employment estimates in some industries were affected by the hurricanes. The Unemployment Rate is estimated to have increased to 4.2% from 4.1%. 

Investors will also pay close attention to the US Average Hourly Earnings data to get cues about the current status of wage growth. The measure is estimated to have increased by 3.9%, slower than 4% in October, on a year-on-year basis. 

Ahead of the US NFP data, the US Dollar Index (DXY) – which tracks the Greenback’s value against six major currencies – holds the key support of 105.70. Meanwhile, 10-year US Treasury yields rise to nearly 4.19%.

Gold price remains well-supported by renewed tensions in Middle East

• Gold price is expected to face increased volatility as traders brace for the US official labor market data. However, heightened geopolitical tensions would continue to support the Gold price downside.
• The ceasefire agreement in the Middle East region between Israel and Hezbollah appears to be shaking as tensions have reignited, with each party blaming the other for violating the truce terms. The Israeli army carried out an array of airstrikes late Monday on Hezbollah in retaliation to their attack by two projectiles on the Israeli military post near Lebanon.
• Meanwhile, the war between Russia and Ukraine also keeps the broader risk appetite on its toes. Russian foreign minister Sergey Lavrov warned that Russia is ready to use any means to prevent the West from achieving its goal of inflicting a “strategic defeat” on the country, in an interview with US journalist Tucker Carlson, ThePrint reported.
• Heightened geopolitical tensions and global uncertainty improve the appeal of safe-haven assets such as Gold.

Technical Analysis: Gold price remains broadly sideways near $2,650

Gold price trades back and forth near the upward-sloping trendline around $2,650, which is plotted from the February low of $1,984.00 on the daily time frame. The precious metal wobbles near the 20-day Exponential Moving Average (EMA), which also trades around $2,650.

The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, very close to the neutral level of 50, suggesting a sideways trend.

Looking down, the November low of around $2,537 will be the key support for Gold price bulls. On the upside, the October and all-time high of $2,790 will act as key resistance.

The current price movements are likely part of a consolidation phase, mostly likely between 0.6435 and 0.6475. In the longer run, risk for AUD has shifted to the downside; the 0.6380 level is expected to provide significant support, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The 0.6380 level is expected to provide significant support

24-HOUR VIEW: “After AUD plummeted to a low of 0.6399 two days ago, we highlighted yesterday that ‘the weakness in AUD could retest the 0.6400 level before stabilisation is likely.’ We added, ‘to keep the oversold momentum going, AUD must remain below 0.6460, with minor resistance at 0.6445.’ Our view did not turn out, as AUD traded in a 0.6422/.6455 range, closing at 0.6452. The current price movements are likely part of a consolidation phase, most likely between 0.6435 and 0.6475.”

1-3 WEEKS VIEW: “We revised our view for AUD to negative yesterday (05 Dec, spot at 0.6430), indicating that ‘the risk for AUD has shifted to the downside.’ However, we pointed out, ‘any decline is expected to face significant support at 0.6380.’ We also pointed out that ‘to sustain the increase in momentum, AUD must not break above the ‘strong resistance’ level, currently at 0.6490.’ There is no change in our view.”

The market is long on the US Dollar (USD) after two months of a Trump-powered rally. Investors like the USD story into 2025, but the question is whether they have to suffer a position-led shake-out first. Today represents a risk to those positions in the form of the November jobs report, ING’s FX analyst Chris Turner notes.

Bounce in the euro has sent DXY back below 106

“The feeling is that weather and Boeing strikes knocked about 110k off last month's number (which saw nonfarm payrolls rise just +12k), which leads consensus to around 220k today. That suggests a number below 200k today will be read as weak, and it will probably take a number over 300k to seriously question whether the Federal Reserve will not cut rates on 18 December.”

“We think the Fed currently is minded to cut. Focus will also be on the unemployment rate, where a rise back to 4.2% slightly favours a Fed cut, while no change at 4.1% would support the dollar on the view that the central bank may well skip a cut in December after all.”

“The bounce in the euro yesterday has sent DXY back below 106. We have a strong preference that the dollar rallies into next year and suspect that DXY does not sustain a break below 105.60/70 even if NFP comes in on the soft side. Indeed, investors often use post-NFP liquidity to take strategic positions and we would have any weakness today present an opportunity to buy dollars.”

The Pound Sterling (GBP) is expected to continue to rise, potentially breaking above 1.2805; major resistance at 1.2850 is likely out of reach for now. In the longer run, there has been a strong surge in momentum; GBP may rise to 1.2850, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP may rise to 1.2850

24-HOUR VIEW: “When GBP was at 1.2695 yesterday, we held view that it ‘could test the 1.2725 level before a pullback is likely.’ We were also of the view that ‘the major resistance at 1.2750 is unlikely to come under threat.’ However, GBP strengthened more than expected, breaking above 1.2750 (high has been 1.2771). We continue to expect GBP to rise, potentially breaking above 1.2805. The major resistance at 1.2850 is likely out of reach for now. Support levels are at 1.2740 and 1.2720.”

1-3 WEEKS VIEW: “Three days ago (03 Dec), when GBP was at 1.2660, we revised our outlook from positive to neutral. We indicated that GBP ‘is likely to trade in a range, probably between 1.2580 and 1.2750.’ After a couple of days of range trading, GBP soared yesterday, breaking clearly above 1.2750. Not surprisingly, there has been a surge in momentum. From here, provided that GBP does not breach the ‘strong support’ level, currently at 1.2685, it may rise to 1.2850.”

Silver prices (XAG/USD) broadly unchanged on Friday, according to FXStreet data. Silver trades at $31.34 per troy ounce, broadly unchanged 0.01% from the $31.34 it cost on Thursday.

Silver prices have increased by 31.70% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 84.35 on Friday, up from 83.97 on Thursday.

(An automation tool was used in creating this post.)

EUR/USD enjoyed a modest bounce yesterday after bond markets concluded that they had priced enough of a risk premium into French markets. The OAT-BUND sovereign spread narrowed back into levels seen a couple of weeks ago. Today's NFP will determine how far EUR/USD needs to rally, ING’s FX analyst Chris Turner notes.

Short-dated rate spreads have turned a little more EUR/USD supportive

“In reality, French risk had not hit the euro too much, and equally we do not see the need for EUR/USD to rally too far on news that Marine Le Pen is not seeking the ousting of President Emmanuel Macron. However, political uncertainty will be unwelcome and French growth will still disappoint.” 

“On the eurozone calendar today is the final release of third quarter GDP, which surprised at 0.4% quarter-on-quarter. Market pricing has very much now shifted towards just a 25bp rate cut from the European Central Bank next Thursday and short-dated rate spreads have turned a little more EUR/USD supportive.” 

“Today's NFP will determine how far EUR/USD needs to rally. Undoubtedly there will be quite a few protective EUR/USD buy stops above 1.06 now for those running short positions. Yet, we suspect any corrective spike may fizzle in the 1.0630/0660 area and continue to see downside risks to our year-end target at 1.05.”

Strong momentum points to further Euro (EUR) strength; it remains to be seen if it can break clearly above 1.0610. In the longer run, EUR has to break and remain above 1.0610 before further advance to 1.0650 is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Strong momentum points to further EUR strength

24-HOUR VIEW: “Our view of range trading yesterday was incorrect. Instead of trading in a range, EUR soared to 1.0589, closing on a strong note at 1.0586, higher by 0.72%. Strong momentum points to further EUR strength. However, it remains to be seen if it can break clearly above the major resistance at 1.0610. The next resistance at 1.0650 is unlikely to come under threat. To keep the momentum going, EUR must remain above 1.0540, with minor support at 1.0560.”

1-3 WEEKS VIEW: “We highlighted on Tuesday (03 Dec, spot at 1.0500) that ‘instead of a rebound, EUR is expected to trade in a range for now, most likely between 1.0430 and 1.0580.’ Yesterday, EUR soared above 1.0580, reaching a high of 1.0589. While the increase in momentum suggests EUR strength, it has to break and remain above 1.0610 before further advance is likely. The probability of EUR breaking clearly above 1.0610 appears to be high, provided that it stays above 1.0500 in the next few days. Looking ahead, the next level to watch above 1.0610 is 1.0650.”

• AUD/USD attracts fresh sellers and is pressured by a combination of factors.
• A softer risk tone and bets for an early RBA rate cut undermine the Aussie.
• Subdued USD demand fails to lend any support ahead of the US NFP report.

The AUD/USD pair maintains its offered tone through the first half of the European session on Friday and currently trades near the 0.6425 region, down around 0.40% for the day. 

Spot prices remain close to the lowest level since August touched on Wednesday and seem vulnerable, though bearish traders opt to wait for more cues about the Federal Reserve's (Fed) rate-cut path before placing fresh bets. Hence, the focus will remain glued to the US Nonfarm Payrolls (NFP) report. The crucial jobs data will guide the Fed policymakers' decision at the December meeting and drive the US Dollar (USD) demand, which, in turn, should provide a fresh impetus to the AUD/USD pair. 

Heading into the key data risk, expectations for a less dovish Fed, along with a slight deterioration in the global risk sentiment, help limit the recent USD decline to a three-week low and act as a headwind for the perceived riskier Australian Dollar (AUD). Apart from this, rising bets for an early interest rate cut by the Reserve Bank of Australia (RBA), bolstered by this week's softer domestic GDP growth figures released earlier this week, contribute to the offered tone surrounding the AUD/USD pair. 

Apart from this, persistent geopolitical tensions, China's economic woes and concerns about US President-elect Donald Trump's lingering trade tariffs suggest that the path of least resistance or the risk-sensitive Aussie is to the downside. Hence, any attempted recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Nevertheless, the AUD/USD pair seems poised to register weekly losses and could possibly post its lowest 2024 weekly close.

• The Pound Sterling holds onto recent gains near 1.2770 against the USD ahead of the US labor market data for November, which will be published at 13:30 GMT.
• Investors expect the Fed to cut interest rates by 25 bps in the policy meeting on December 18.
• BoE hawk Megan Greene warned on Thursday that UK inflation may remain above the 2% target in the medium term.

The Pound Sterling (GBP) holds onto gains near 1.2770 against the US Dollar (USD) in European trading hours on Friday. The GBP/USD pair gained sharply on Thursday after the release of the United States (US) Initial Jobless Claims data for the week ending November 29, which showed that individuals claiming jobless benefits for the first time increased to 224K against the estimates and the previous week’s reading of 215K.

The Cable is expected to trade muted ahead of the release of the US Nonfarm Payrolls (NFP) data for November at 13:30 GMT. Investors will pay close attention to the US official labor market data to get fresh cues about whether the Federal Reserve (Fed) will cut interest rates in its policy meeting on December 18. The Fed started its policy-easing cycle in September as officials were worried about deteriorating labor demand and were confident about inflation returning to the bank’s target of 2%.

Economists expect the US economy added 200K fresh workers, significantly higher than the 12K increase seen in October. Payroll growth was significantly lower last month as some industries were affected by the hurricanes and there were labor strikes at Boeing plants. The Unemployment Rate is estimated to have increased to 4.2% from 4.1%.

Investors will also focus on the Average Hourly Earnings data, a key measure for wage growth,, which is expected to have grown by 3.9%, slower than 4% in October on a year-on-year basis. On a monthly basis, wage growth measure is estimated to have risen at a slower pace of 0.3% from the former reading of 0.4%.

Signs of a slowdown in labor demand and moderate wage growth would boost Federal Reserve (Fed) dovish bets for the policy meeting on December 18. On the contrary, strong job data would weaken them. Currently, there is a 72% chance that the Fed will reduce interest rates by 25 basis points (bps) to 4.25%-4.50% this month, while the rest supports leaving interest rates unchanged, according to the CME FedWatch tool.

Daily digest market movers: Pound Sterling outperforms its major peers

• The Pound Sterling performs strongly against its major peers on Friday as Bank of England (BoE) officials showed concerns over price pressures remaining persistent. BoE Monetary Policy Committee (MPC) external member Megan Greene said on Thursday that UK inflation could remain above the 2% target in the medium term as it is becoming “fundamentally more persistent,” Bloomberg reports.
• Mega Green’s doubts over the central bank bringing inflation within the desired range were backed by the assumption that wage growth remains persistent. “Wage growth is not falling as quickly as I would like,” Greene said.
• On Wednesday, BoE Governor Andrew Bailey also emphasized that the central bank has still some work to do to bring inflation down below the bank’s target of 2% but was confident that the disinflation process is well embedded.
• Due to the absence of critical United Kingdom (UK) economic indicators in the near term, market speculation for the likely interest rate decision by the BoE in the monetary policy meeting on December 19 will drive the Pound Sterling’s valuation. Traders expect that the BoE will leave interest rates unchanged at 4.75%.

Technical Analysis: Pound Sterling stays above 20-day EMA

The Pound Sterling holds onto Thursday’s upside move near 1.2770 against the US Dollar (USD) in Friday’s London session. The GBP/USD pair steadies above the 20-day Exponential Moving Average (EMA) around 1.2715 and aims to sustain above it. However, the broader outlook remains bearish as the pair stays below the 200-day Exponential Moving Average, which trades around 1.2825.

The 14-day Relative Strength Index (RSI) has rebounded to neutral levels after turning oversold on November 22. However, the downside bias is still intact.

Looking down, the pair is expected to find a cushion near the upward-sloping trendline around 1.2500, which is plotted from the March 2023 low near 1.1800. On the upside, the 200-day EMA will act as key resistance.

Germany’s industrial sector extended its downtrend in October, according to the latest data published by Destatis on Friday.

In the Eurozone’s economic powerhouse, industrial output dropped by 1.0% MoM, the federal statistics authority Destatis said in figures adjusted for seasonal and calendar effects, compared to the expected 1.2% rebound and a revised 2.0% decline in September.

German Industrial Production tumbled by 4.5% year-on-year (YoY) in October versus September’s -4.3% revision.

EUR/USD reaction to the German Industrial Production data

The downbeat German data have little to no impact on the Euro, as EUR/USD holds near 1.0570, down 0.15% on the day, at the press time.

Here is what you need to know on Friday, December 6:

The US Dollar (USD) holds its ground early Friday after weakening against its major rivals on Thursday. Investors await November jobs report, which will include Nonfarm Payrolls (NFP), Unemployment Rate and wage inflation figures. The US economic calendar will also feature the University of Michigan's Consumer Sentiment Index. Finally, several Federal Reserve (Fed) policymakers will deliver speeches on the last day before the blackout period starts.

The USD Index came under bearish pressure and lost more than 0.5% on Thursday. In the European morning, the index stays in a consolidation phase below 106.00. Meanwhile, the benchmark 10-year US Treasury bond yield fluctuates below 4.2% and US stock index futures trade mixed. Following the 12,000 increase recorded in October, NFP is forecast to rise by 200,000 in November.

After climbing to a new record high above $100,000 on Thursday, Bitcoin reversed its direction and close the day in negative territory. Early Friday, BTC/USD trades at around $98,000.

EUR/USD benefited from the broad-based USD weakness on Thursday and came within a touching distance of 1.0600. The pair edges slightly lower in the European morning on Friday but holds comfortably above 1.0550. Eurostat will publish revisions to third quarter Gross Domestic Product data.

GBP/USD gathered bullish momentum and climbed to its highest level in three weeks above 1.2770 on Thursday. The pair trades marginally lower on the day slightly below 1.2750 to begin the European session.

After rising for three consecutive days, USD/CAD reversed its direction and fell more than 0.3% on Thursday. The pair holds steady above 1.4000 early Friday. Statistics Canada will publish labor market data for November later in the day.

USD/JPY edges lower and trades below 150.00 after posting small losses on Thursday. The data from Japan showed on Friday that Overall Household Spending declined by 1.3% on a yearly basis in October. This reading came in better than the market expectation for a decrease of 2.6%.

Gold failed to capitalize on the selling pressure surrounding the USD and ended the day in the red on Thursday. After falling to its weakest level in over a week below $2,620 in the Asian session, XAU/USD gained traction and was last seen trading near $2,640.

• EUR/USD edges lower to 1.0575 in Friday’s early European session, down 0.10% on the day. 
• Trump tariff threats and rising bets on ECB rate cuts undermine the Euro. 
• Investors await the US Nonfarm Payrolls (NFP) for November, which is due later on Friday. 

The EUR/USD pair weakens to near 1.0575 during the early European session on Friday. Fears mount about US tariffs on European goods, and rising bets of interest rate cuts by the European Central Bank (ECB) weigh on the Euro (EUR) against the Greenback. Later on Friday, the US Nonfarm Payrolls (NFP) will take center stage. 

The shared currency remains on the defensive as traders are worried about the potential tariff policies on all goods coming into the US, which could undermine the Eurozone economy. Furthermore, the ECB is widely expected to cut the interest rate in the final monetary policy meeting of the year. The ECB is anticipated to trim its deposit rate by 25 basis points (bps) on December 12, according to all but two of 75 economists polled by Reuters.

Elsewhere, French President Emmanuel Macron said on Thursday that he will appoint a new Prime Minister in the coming days whose top priority will be getting a 2025 budget adopted by parliament, per Reuters. Any signs of political uncertainty in France could contribute to the EUR's downside.

Across the pond, the expectation that the Federal Reserve (Fed) will lower borrowing costs at its December policy meeting might drag the Greenback and cap the downside for EUR/USD. The markets are now pricing in a 70.1% chance that the central bank will cut rates by a quarter point at its December 17-18 meeting, according to the CME FedWatch tool.

• GBP/USD struggles to capitalize on its gains registered over the past three days.
• BoE Governor predicted four rate cuts in 2025 and weigh on the British Pound.
• Subdued USD price action could support the pair ahead of the US NFP report.

The GBP/USD pair oscillates in a range below mid-1.2700s during the Asian session on Friday and consolidates its recent gains registered over the past three days, to over a three-week high touched the previous day. Traders now seem reluctant to place aggressive bets and opt to wait for the release of the crucial US monthly employment details later today. 

The popularly known Nonfarm Payrolls (NFP) report will be looked upon for the interest rate outlook in the US and guide the Federal Reserve (Fed) policymakers on their next policy decision at the December meeting. This, in turn, will help determine the near-term trajectory for the US Dollar (USD) and provide some meaningful impetus to the GBP/USD pair. In the meantime, the recent decline in the US Treasury bond yields fails to assist the USD attract any meaningful buyers or recover from a multi-week low. 

That said, expectations that the US central bank will adopt a cautious stance on cutting rates, amid hopes that US President-elect Donald Trump's policies will boost inflation, act as a tailwind for the buck. Apart from this, a softer risk tone and persistent geopolitical tensions benefit the safe-haven USD. This, along with Bank of England (BoE) Governor Andrew Bailey's signal for four interest rate cuts in 2025, holds back traders from placing bullish bets around the British Pound (GBP) and caps the GBP/USD pair. 

Nevertheless, spot prices seem poised to register modest gains for the second straight week, though any further move up is more likely to confront stiff barrier near a technically significant 200-day Simple Moving Average S(AM), around the 1.2820 area. This further makes it prudent to wait for strong follow-through buying before confirming that the GBP/USD pair has formed a near-term bottom and positioning for an extension of the recent goodish recovery from sub-1.2500 levels, or a multi-month low touched in November.

FX option expiries for Dec 6 NY cut at 10:00 Eastern Time via DTCC can be found below.

EUR/USD: EUR amounts

• 1.0400 957m
• 1.0450 1.3b
• 10500 2.9b
• 1.0550 946m
• 1.0600 1.2b
• 1.0650 1b

GBP/USD: GBP amounts     

• 1.2600 444m

USD/JPY: USD amounts                     

• 150.00 515m
• 151.00 681m
• 152.00 839m

AUD/USD: AUD amounts

• 0.6300 842m
• 0.6700 945m

USD/CAD: USD amounts       

• 1.4000 782m
• 1.4200 1.1b

• US Nonfarm Payrolls are set to jump by 200K in November after rising by just 12K in October.
• The United States Bureau of Labor Statistics will publish the labor data on Friday at 13:30 GMT.
• US jobs data is critical to gauging future Fed rate cuts and the US Dollar price direction.

The United States (US) Bureau of Labor Statistics (BLS) will release the high-impact Nonfarm Payrolls (NFP) data for November on Friday at 13:30 GMT. The Federal Reserve’s (Fed) future interest-rate cuts and the next direction in the US Dollar (USD) depend highly on the November jobs report.

What to expect in the next Nonfarm Payrolls report?

Economists expect the Employment Report to show that the US economy created 200,000 jobs in November, following a meagre gain of 12K in October due to distortions caused by two hurricanes and the strike at Boeing.

The Unemployment Rate (UE) is likely to edge higher to 4.2% in the same period, compared to the 4.1% reported in October.

Meanwhile, Average Hourly Earnings (AHE), a closely-watched measure of wage inflation, are seen rising by 3.9% in the year through November after a 4.0% growth in October.

The November jobs report is critical to gauging the state of the US labor market and the Fed’s easing trajectory in the coming months, especially after Fed Chairman Jerome Powell’s recent cautious stance on rate cuts.

Last month at an event in Dallas, Powell said there was no need to rush rate cuts with the economy still growing, the job market solid and inflation still above the 2% target. Meanwhile, the Fed Chief sounded optimistic about the state of the US economy at the New York Times' DealBook Summit on Wednesday.

Previewing the November employment situation report, TD Securities analysts said: “We now look for mean reversion in Nov with ~75k jobs added back to the series as the twin impacts from hurricanes/strike fade away.”

“We also expect the UE rate to rise by a tenth to 4.2%, while wage growth likely cooled to 0.2% m/m following October's outsized 0.4% increase.,” they added.

How will US November Nonfarm Payrolls affect EUR/USD?

The recent series of US economic data releases and speeches by several Fed policymakers did little to alter the market’s pricing of a 75% probability of a 25 basis points (bps) rate reduction later this month, according to CME Group's FedWatch tool.

Earlier in the week, the BLS reported that the JOLTS Job Openings rose to 7.744 million in October, surpassing the expected 7.48 million increase. 

The Automatic Data Processing (ADP) announced on Wednesday that employment in the US private sector employment grew by 146,000 jobs last month, slightly lower than the 150,000 figure that markets expected.

The disappointing ADP jobs report fuels concerns about the health of the US labor market, preparing markets for a downside surprise to Friday’s payrolls data. However, the US ADP data is generally not correlated with the official NFP data.

If the headline NFP reading shows a payroll growth below 200,000, the US Dollar could come under intense selling pressure in an immediate reaction to the data release because the figures could bolster expectations of further easing by the Fed. In such a scenario, EUR/USD could edge up toward the 1.0700 level.

Conversely, a stronger-than-expected NFP print and elevated wage inflation data could raise concerns about the prospects of future rate cuts by the Fed, providing extra legs to the USD uptrend while dragging EUR/USD back to 1.0400.

Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for EUR/USD: 

“EUR/USD needs a decisive break above the 21-day Simple Moving Average (SMA) at 1.0560 to extend the recovery toward the 1.0700 round level. If that level is scaled, buyers will then target the 50-day SMA at 1.0761 en route to the 200-day SMA at 1.0845.”

“However, the 14-day Relative Strength Index (RSI) is still below the 50 level, maintaining risks to the downside for the main currency pair. Technical sellers could emerge if EUR/USD fails to defend the 1.0400 level. Additional declines will challenge the November 22 low of 1.0333.”

Gold prices rose in India on Friday, according to data compiled by FXStreet.

The price for Gold stood at 7,192.59 Indian Rupees (INR) per gram, up compared with the INR 7,163.30 it cost on Thursday.

The price for Gold increased to INR 83,897.07 per tola from INR 83,551.29 per tola a day earlier.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)

• NZD/USD meets with a fresh supply amid a slight deterioration in the global risk sentiment.
• The USD languishes near a multi-week low, though it does little to lend any support to the pair.
• Traders look to the US NFP report for cues about the Fed’s rate-cut path and a fresh impetus. 

The NZD/USD pair attracts fresh sellers during the Asian session on Friday and erodes a part of the previous day's modest gains. Spot prices  drop to a daily low, around the 0.5860 region in the last hour, as traders keenly await the release of the US Nonfarm Payrolls (NFP) report for some meaningful impetus heading into the weekend. 

The closely watched US monthly jobs data could provide some cues about the Federal Reserve's (Fed) rate cut path, which, in turn, will play a key role in influencing the US Dollar (USD) price dynamics and drive the NZD/USD pair. In the meantime, the recent decline in the US Treasury bond yields keeps the USD bulls on the defensive near a multi-week low. That said, bets for a less dovish Fed, along with a softer tone across the global equity markets, act as a tailwind for the buck and weigh on perceived riskier currencies, including the Kiwi. 

Investors seem convinced that US President-elect Donald Trump's policies will boost inflation and force the Fed to stop cutting rates. Moreover, the recent hawkish remarks from several FOMC members, including Fed Chair Jerome Powell, suggest that the US central bank will adopt a more cautious stance. This, along with persistent geopolitical risk, weighs on investors' sentiment. Apart from this, bets for aggressive policy easing by the Reserve Bank of New Zealand (RBNZ) support prospects for further weakness in the NZD/USD pair.

From a technical perspective, the recent range-bound price action over the past three weeks or so might still be categorized as a bearish consolidation phase. Furthermore, the lack of any meaningful buying and negative oscillators on the daily chart validates the near-term bearish outlook for the NZD/USD pair. Hence, any attempted recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly. 

• Gold price witnessed an intraday turnaround from over a one-week low touched on Friday.
• A softer risk tone, geopolitical risks, and trade war fears benefit the safe-haven commodity.
• Bets for a less dovish Fed might cap gains for the XAU/USD ahead of the US NFP report.

Gold price (XAU/USD) rebounds after touching a one-and-half-week low during the Asian session on Friday and climbs to a daily high, above the $2,640 level in the last hour. Any meaningful appreciating move, however, seems elusive ahead of the US Nonfarm Payrolls (NFP) report, which will be looked upon for the interest rate outlook in the US and provide a fresh impetus to the non-yielding bullion. Nevertheless, the commodity remains on track for a second consecutive week of decline. 

The closely watched US jobs data will guide the Federal Reserve (Fed) policymakers on their next monetary policy decision later this month, which, in turn, will drive the US Dollar (USD) and provide some meaningful impetus to the non-yielding Gold price. In the meantime, hopes that the US central bank will adopt a cautious stance on cutting rates, amid expectations that US President-elect Donald Trump's policies could reignite inflation, turn out to be a key factor undermining the XAU/USD. 

Meanwhile, bets that the Fed will lower borrowing costs at its December policy meeting keep the USD bulls on the defensive near a multi-week low. This, along with persistent geopolitical risks stemming from the protracted Russia-Ukraine war and the ongoing conflicts in the Middle East, along with concerns about Trump's tariff plans and a softer risk tone, offer some support to the safe-haven Gold price. This, in turn, warrants caution for bearish traders heading into the key US data risk. 

Gold price benefits from safe-haven demand, suppressed US bond yields, subdued USD demand

• The recent remarks from several influential FOMC members, including Federal Reserve Chair Jerome Powell on Wednesday, suggested that the US central bank could pause its rate-cutting cycle.
• This, in turn, drags the non-yielding Gold price to over a one-week low on Friday, though a combination of factors offers some support to the bullion and helps limit any further depreciating move. 
• Russia has shown no sign of fatigue in a nearly two-year-old conflict with Ukraine and pounded the country’s east during the past week with long-range weapons and sustained ground assaults. 
• Concerns about US President-elect Donald Trump's trade tariffs and their effect on the global economic outlook temper investors' appetite for riskier assets and lend support to the safe-haven XAU/USD. 
• According to the CME Group's FedWatch Tool, traders are pricing in a 70% chance that the Fed will lower borrowing costs by 25 basis points at the December meeting and a 30% probability of a pause. 
• Rate cuts bets held broadly steady after the US Department of Labor (DoL) reported on Thursday that Initial Jobless Claims rose to 224K for the week ended November 29, from 215K in the previous week. 
• The benchmark 10-year US Treasury yield languishes near its lowest level since October 22 and keeps the US Dollar depressed near a multi-week low, offering additional support to the precious metal.
• Investors keenly await the release of the US Nonfarm Payrolls (NFP) report, which might offer cues about the Fed's rate-cut path and determine the near-term trajectory for the USD and the commodity. 

Gold price needs to surpass the $2,655 horizontal barrier for bulls to seize near-term control

From a technical perspective, an intraday breakdown below the 100-period Simple Moving Average (SMA) on the 4-hour chart and a short-term trading range support near the $2,633-2,632 area was seen as a key trigger for bearish traders. The subsequent swift recovery, however, warrants some caution before positioning for any further losses. Meanwhile, any further move up is likely to confront some resistance near the $2,649 region ahead of the $2,655 supply zone. Some follow-through buying beyond last Friday's swing high, around the $2,666 area will shift the bias in favor of bulls and allow the Gold price to reclaim the $2,700 mark.

On the flip side, the Asian session low, around the $2,614-2,613 region, now seems to act as immediate strong support ahead of the $2,605-2,600 area. This is followed by the 100-day SMA, currently around the $2,583 zone, below which the Gold price could slide to the November monthly swing low, around the $2,537-2,536 area. The downward trajectory could extend further and eventually drag the XAU/USD to the $2,500 psychological mark.

• The Indian Rupee trades on a flat note in Friday’s Asian session. 
• Recovery in domestic markets and lower crude oil prices may lift the INR, but renewed USD demand could limit gains. 
• The RBI interest rate decision will be in the spotlight on Friday ahead of the US NFP data. 

The Indian Rupee (INR) holds steady on Friday after bouncing off from its all-time low level in the previous session. The strength in the domestic markets and the decline in crude oil prices could provide some support to the local currency. Nonetheless, broad-based US Dollar (USD) strength amid the cautious mood could undermine the INR against the Greenback. 

The Reserve Bank of India (RBI) Governor Shaktikanta Das will unveil the fifth monetary policy of the current financial year 2024-25 (FY25) on Friday. On the US docket, the US Nonfarm Payrolls (NFP) will be in the spotlight. The Federal Reserve’s (Fed) Michelle Bowman and Austan Goolsbee are scheduled to speak later in the day. 

Indian Rupee remains weak ahead of RBI interest rate decision

• “We expect the rupee to trade with a negative bias on the strong dollar and worries over an economic slowdown. However, weakness in crude oil prices and fresh FII outflows may support the rupee at lower levels,” noted Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.
• "We maintain our out-of-consensus call for a 25 bps repo rate cut to 6.25 per cent, due to weaker growth and a benign one-year forward inflation outlook," said Nomura economists.
• According to a Union Bank study, the RBI has been using its foreign reserves, resulting in a significant decline from USD 705 billion to USD 656.58 billion as of November 22, 2024.
• The US weekly Initial Jobless Claims climbed to 224K for the week ending November 29, compared to the previous week of 215K, according to the US Department of Labor (DoL) on Thursday. This reading came in above the market consensus of 215K.
• Continuing Jobless Claims declined by 23K to 1.871M for the week ending November 22. 

USD/INR’s long-term bias tilts bullish, but Bearish Divergence on RSI might cap its gains

The Indian Rupee trades flat on the day. The  USD/INR pair retains its bullish bias as the price is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. However, the 14-day Relative Strength Index (RSI) makes lower highs, indicating a bearish divergence. This suggests that the trend is weakening and further consolidation looks favorable in the near term. 

The all-time high of 84.77 appears to be a tough nut to crack for the bulls. A decisive break above this level could still take the pair up to the 85.00 psychological level. Further north, the next hurdle emerges at 85.50.

On the other hand, a breach of the resistance-turned-support of 84.60 could see a drop to 84.22, the low of November 25. The key support level to watch is the 84.05-84.00 region, representing the 100-day EMA and psychological mark. 

 

• WTI drifts lower for the third straight day despite OPEC+ decision to delay production rise. 
• Concerns about a slowing demand in China overshadow geopolitical risks and exert pressure.
• Traders now look to the US NFP report, which will drive the USD and provide a fresh impetus.

West Texas Intermediate (WTI) US Crude Oil prices remain under some selling pressure for the third consecutive day on Friday and trade near the lower end of the weekly range, around the $67.80 region during the Asian session.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, on Thursday, postponed planned supply increases by three months until April and extended the full unwinding of cuts by a year until the end of 2026. The announcement suggested that the cartel is worried about a potential supply glut and a slowdown in global demand, especially in China – the world's top oil importer. This, in turn, is seen as a key factor weighing on the black liquid. 

Meanwhile, the worsening Russia-Ukraine conflict and increasing tensions in the Middle East keep geopolitical risks premium in play. Furthermore, signs of US economic resilience, along with hopes that US President-elect Donald Trump's expansionary policies will boost fuel demand, could act as a tailwind for Crude Oil prices. Traders might also refrain from placing aggressive directional bets and opt to wait for the release of the key US Nonfarm Payrolls (NFP) report.

The closely watched US jobs data will play a key role in influencing the interest rate outlook in the US, which, in turn, will drive the US Dollar (USD) demand and provide some meaningful impetus to the commodity. Meanwhile, the lack of buying and the aforementioned fundamental backdrop favors bearish traders. This, in turn, suggests that any attempted recovery in Crude Oil prices could be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

• The Japanese Yen extends its consolidative price move amid wavering BoJ rate hike expectations.
• A softer risk tone, trade war fears, and geopolitical risks could offer support to the safe-haven JPY. 
• A modest USD uptick is seen acting as a tailwind for the USD/JPY pair ahead of the US NFP report.

The Japanese Yen (JPY) struggles to capitalize on the previous day's modest gains and oscillates in a narrow range against its American counterpart during the Asian session on Friday. The near-term bias, meanwhile, seems tilted in favor of the JPY bulls in the wake of the Bank of Japan's (BoJ) more hawkish stance. In fact, the BoJ remains on track for more interest rate hikes, while other major central banks, including the US Federal Reserve (Fed), are seen lowering borrowing costs further. 

Apart from this, a slight deterioration in the global risk sentiment, persistent geopolitical tensions and trade war fears continue to underpin the safe-haven JPY. Meanwhile, the recent decline in the US Treasury bond yield keeps the US Dollar (USD) depressed near a multi-week low and further benefits the lower-yielding JPY. Traders, however, opt to wait for the US Nonfarm Payrolls (NFP) report for cues about the Fed's rate-cut path before placing fresh directional bets around the USD/JPY pair. 

Japanese Yen might continue to draw support from a combination of factors

• The Japanese Yen struggles to gain any meaningful traction as traders look to find out whether the Bank of Japan will deliver another interest rate hike at its upcoming monetary policy meeting later this month. 
• BoJ Governor Kazuo Ueda said last week that rate hikes are nearing in the sense that economic data are on track. BoJ's Toyoaki Nakamura said on Thursday that the central bank must move cautiously in raising rates. 
• Russia has pounded Ukraine with long-range weapons and sustained ground assaults in the country’s east during the past week and has shown little sign of fatigue in the conflict, which has been raging for nearly two years.
• Adding to this, concerns that US President Donald Trump's trade tariff could trigger the second wave of global trade wars temper investors' appetite for riskier assets and offer some support to the safe-haven JPY.
• According to the CME Group's FedWatch Tool, the markets are pricing in a 70% chance that the Federal Reserve will lower borrowing costs by 25 basis points at the December meeting and a 30% probability of a pause. 
• Rate cut bets held broadly steady after the US Department of Labor (DoL) reported on Thursday that Initial Jobless Claims rose to 224K for the week ended November 29, from the previous week's upwardly revised 215K print. 
• The yield on the benchmark 10-year US government bond languishes near its lowest level since October 22 and further benefits the lower-yielding JPY, though a modest US Dollar uptick lends support to the USD/JPY pair. 
• The market attention remains glued to the US Nonfarm Payrolls (NFP) report, which will guide Fed policymakers on their next policy decision. This, in turn, will influence the USD and provide a fresh impetus to the currency pair.

USD/JPY traders seem non-committed; 100-day SMA pivotal support holds the key for bulls

From a technical perspective, the overnight swing low, around the 148.65 region, now seems to protect the immediate downside ahead of the 149.00 mark and the 100-day SMA, currently around the 148.80 region. The latter should act as a key pivotal point, which if broken decisively will be seen as a fresh trigger for bearish traders. Given that oscillators on the daily chart are holding in negative territory, the USD/JPY pair might then slide to the 148.10-148.00 region en route to the 147.35-147.30 zone and the 147.00 round figure.

On the flip side, attempted recovery might now confront some resistance near the 150.55 region. This is followed by the 150.70 hurdle, the 151.00 round figure and the weekly high, around the 151.20-151.25 zone touched on Wednesday. A sustained move beyond the latter could lift the USD/JPY pair to the 152.00 mark, or the very important 200-day SMA. Some follow-through buying will suggest that the recent corrective decline from a multi-month high touched in November has run its course and shift the bias in favor of bullish traders.

• The Australian Dollar attracts some sellers in Friday’s Asian session. 
• Discouraging GDP number sparks the RBA rate cut bets, weighing on the Aussie. 
• The US Nonfarm Payrolls report will take center stage on Friday. 

The Australian Dollar (AUD) edges lower on Friday. Disappointing economic growth could prompt the Reserve Bank of Australia (RBA) to adopt a more dovish tone at next week’s monetary policy meeting, potentially setting up a February rate cut. This, in turn, exerts some selling pressure on the Aussie. 

Traders will closely monitor the US November employment report, including Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings. The US economy is expected to see 200,000 jobs added in November after rising by 12,000 in October. In case of weaker than estimated outcome, this could drag the Greenback lower and create a tailwind for AUD/USD.  

Australian Dollar loses traction amid uncertainties

• A Reuters poll of 44 economists showed the RBA is expected to keep the cash rate unchanged at 4.35% in the next meeting and see the RBA cut rate by 25 bps to 4.10% in Q2 2025 (vs Q1 in the November poll).
• Australia’s GDP expanded 0.3% QoQ in the three months through September, compared with the 0.2% growth in the second quarter. This reading was below the market consensus of 0.4%.
• The US weekly Initial Jobless Claims rose 9,000 to 224,000 for the week ending November 29, according to the US Department of Labor (DoL) on Thursday. This reading came in above initial estimates and higher than the previous week's 215,000.  
• Continuing Jobless Claims went down by 23K to 1.871M for the week ending November 22.
• The Fed Chair Jerome Powell stated on Wednesday that the US economy is stronger now than the US central bank had expected in September when it began reducing interest rates, which means the US central bank can show some restraint in cutting interest rates. 

AUD/USD’s bearish bias remains unchanged in the longer term

The Australian Dollar trades weaker on the day. The AUD/USD pair keeps the bearish vibe on the daily chart as the price is below the key 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is located below the 50-midline near 38.85, indicating bearish momentum. This suggests that the path of least resistance is to the downside.

The potential support level emerges at 0.6300, representing the lower limit of the descending trend channel and psychological level. Bearish candlesticks below this level could draw in more sellers to 0.6285, the low of October 3, 2023.

Sustained bullish momentum above the upper boundary of the trend channel of 0.6500 could see a rally to 0.6615, the 100-day EMA. A decisive break above the mentioned level could expose 0.6687, the high of November 7. 

The main opposition Democratic Party of Korea announced Thursday that an impeachment motion against President Yoon Suk Yeol will be put to a vote on Saturday, per Asia News. It needs at least eight members of Yoon's party to vote for his impeachment for the motion to pass with a two-thirds majority in the 300-seat parliament.

This action came after South Korea's President declared martial law in the country for the first time in nearly 50 years, mentioning "anti-state forces" and the threat from North Korea.

Market reaction

At the time of writing, the USD/KRW pair is trading 0.05% higher on the day to trade at 1416.25. 

The People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Friday at 7.1848, as compared to the previous day's fix of 7.1879.