USD Strengthens On November Payrolls

Dec. 11, 2017 2:06 PM ET
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  • EURUSD extended declines on Friday as price fell to a fresh one month low on an intraday basis.
  • USDJPY continued to extend its gains.
  • Gold prices continue to extend their declines.

Daily Forex Market Preview, 11/12/2017

The U.S. dollar index firmed on Friday following a broadly positive jobs report for November. Data from the U.S. Labor department showed that the economy added 228,000 jobs during the month which was higher than forecasts. The U.S. unemployment rate was steady at 4.1% while job wages grew slightly but below forecasts.

The payrolls report comes ahead of this Wednesday's FOMC meeting where interest rates are set to rise by 25 basis points. Last week, the U.S. government shutdown was also averted as President Trump signed the legislation to fund the government for two more weeks. The Congress is expected to negotiate a long term budget deal during the period.

The economic calendar is quiet today, ahead of a busy week that will see the FOMC, ECB, BoE and the SNB holding their respective monetary policy meetings.

EURUSD intra-day analysis

EURUSD (1.1776): The EURUSD extended declines on Friday as price fell to a fresh one month low on an intraday basis. However, price action managed to pullback before the close. Price action on EURUSD suggests near term upside as we expect a retest of the resistance level near 1.1822 level. Establishing resistance here could potentially pave way for the euro to resume its declines down to the 1.1710 level of support. However, a short term higher low needs to be formed for this bias to be validated. In the event that the declines continue, EURUSD could be seen pushing lower to the support level without any retracement.

USDJPY intra-day analysis

USDJPY (113.61): USDJPY continued to extend its gains, which come after the strong bullish engulfing pattern that was formed. The upside momentum is expected to see USDJPY pushing towards the previous resistance level near 114.00. In the short term, any pullback is likely to be limited to the 113.00 region. The upside bias will shift on a bearish close below the 113.00 region. In this case, we can expect USDJPY to push lower to test the previous support level formed at 112.00.

XAUUSD intra-day analysis

XAUUSD (1248.79): Gold prices continue to extend their declines following last Thursday's close below the 1262 handle. Price action fell to a 5-month low. The Stochastics oscillator on the daily chart is however, in the oversold level including the 4-hour time frame. This suggests a near term retracement. The gains in gold prices could be limited to the price level of 1262 where resistance could be established. Any upside gains can be expected only on a strong close above this level. To the upside, 1285 resistance will be back in focus. A reversal near the 1262 area could however spell more declines for gold prices in the near term.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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