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Investors and dealers live for market volatility, it creates trading opportunity, and today's North American jobs reports should not disappoint even the neutral observer. The release of last month's December reports for the US and Canada came in well below expectations, with the weather being blamed for the bulk of setbacks. Canada actually lost jobs while the US created so few, both well off market expectations (74k and -46k respectively). Today, particularly for the US, another sub-par performance and future Fed taper actions will surely be called into question. Even for the good health of the typical global investor, this market requires a healthy non-farm payrolls report or one that is close to consensus (+185k and an unemployment rate +6.7%) to keep that investment "ship afloat." Anything deviating from expectations and we will have a market space second guessing not just the Fed's monetary position but their own country's as well.

What to watch? Gold – the jobs number could have a significant impact on the precious metal. A decisive number will be capable of pushing the commodity beyond this years frustrating range. For the metal to go higher it needs a horrid headline print (something close to last month release 75k and worse). A "below" consensus print (185k) will have many questioning the Feds tapering requirements and have the metal push on towards that $1,300 handle. If the headline print comes in around consensus then the metal will be sold – the depth of the pullback will depend on equities reaction. Even if NFP comes in well "above" expectations then gold should be sold – the safe-haven trade becomes redundant (risk is strapped back on) and the mighty dollar gets bought, along with equities. A strong number has the potential for the metal to trade below that psychological $1,200 handle. What if the payrolls report truly bums out? Then the market should be expecting a seismic shift in thought. Investors are not that long gold – a disappointing print should find a second wind and have the ability for a lengthy rally. The length depends on how market expectations for Fed tapering alter. Finally, if investors are capable of dismissing the weather element and Fed tapering thinking shifts, then gold should stay a lucky winner.

On the whole, the USD majors have remained relatively well range-bound ahead of this morning's jobs reports. Traders are particularly cautious, as another weak figure will certainly dismiss the claim that the soft December print was a weather-related one-off, while a strong number would suggest the US recovery story is still intact. Guarded investors have been willing to book some profit ahead of the data, with many taking the advantage of the EUR's lofty position after the ECB's non-action and lack of enthusiasm for lower rates anytime soon.

The 18-member single currency has steadied, but is still a fair bit lower than when headlines hit the wires during the European session, suggesting that Germany's constitutional court is calling into question the legality of the ECB's Outright Monetary Operation (OMT). The ECB's decision on OMT does not seem to be covered by the ECB's mandate since "it could be qualified as an independent act of economic policy rather than monetary policy, and effect a fiscal redistribution not foreseen by European treaties." The Court has stayed proceedings pending answers from the European court of justice – judgment is expected on March 18th.

What of the EUR? The ECB has only delayed policy action at best until next months meeting. The key is that euro policy makers want to acquire more information – certainly a stalling tactic, but a prudent move nevertheless. Their wish list would include:

1.The 2016 inflation and growth forecast, which coincidentally are available next month.

2.The need to gauge credit flows from data impacted by the end of 2013 AQR/stress test deadline.

3.Euro policy makers want to work on whether the Emerging Market developments are permanent or temporary, and how broad based is the weakness.

4.It would also be prudent to take a look at eurozone Q4 GDP data.

This entire gathering should be enough to provide the ammunition needed for a rate cut. The EUR's post-meeting rebound has been seen by many as a new selling opportunity, especially with the currency failing to penetrate 1.3650 – this keeps the current bearish trend intact. Through the downsides 1.3540 opens the door to 1.33 and change.

Even the pound's position could not be stirred too much so far this morning. The majority of investors require the US jobs print to give them conviction before doing anything hasty. Even the UK's industrial production (+0.4%) and manufacturing output (+0.3) for December coming in below forecast and the November numbers being revised a tad lower this morning has not been able to muster much reaction. If anything, sterling has been pushed a tad higher outright, dragged mostly by the selling of the EUR.

Now all we have to do is wait.

Forex heatmap

Source: Watch Gold's Reaction To NFP For Dollar Direction