Market sources report that volume on the currency market is returning to normal. There is a lot going on the yen market, where speculative capital reverses positions on the JPY cross. USD / JPY is clearly pushed above 108 (high at 108.44). Demand is also observed on EUR / JPY and AUD / JPY, which translates into an increase in EUR / USD at 1.14 and an AUD / USD return of over 0.70.
The stock market is predominantly green. The market does not support the bleak climate of closing Wall Street on Thursday (SP500 close at -2.48%) and is trying to raise with the help of reports that Beijing has resumed trade negotiations with Washington. The parties are expected to return to talks next week. Prime Minister of China Li Keqiang also signaled further loosening of policy and support for small businesses.Shanghai Composite is growing 1.9% today, and Hang Seng is gaining 1.5%. The exception is the Japanese Nikkei225, which must discount the holiday break from the previous two sessions and today falls 2.2%.
On Friday, the 4th of January, the key event of the day is the NFP-Payrolls data release at 01:30 pm GMT together with Unemployment Rate and Average Hourly Earnings data release. The other important news today include PMI Services and PMI Composite data releases from across the Eurozone, CPI data from France, Unemployment Change and Unemployment Rate data from Germany, Composite PMI and PMI Services data from the UK, Consumer Price Index data from the Eurozone, Employment Change and Unemployment Rate data from Canada together with Ivey Purchasing Managers Index data and last, but not least: ISM Non-Manufacturing data from the US. There is a speech from Fed Chairperson Jerome Powell scheduled at 03:15 pm GMT today as well.
EUR/USD analysis for 04/01/2019:
The Non-Farm Payrolls data are expected at the level of 181k after the 155k figure last month. Unemployment Rate should remain at the record low level of 3.7% and the Average Hourly Earnings should increase a little from 0.2% to 0.3% on a monthly basis.
It is worth to notice that, the ADP report yesterday indicated an increase in the number of full-time jobs in the amount of 271 thousand. It is definitely more than expected (180,000), nevertheless a downside is the downward revision of the previous reading.
Let's now take a look at the EUR/USD technical picture at the H4 time frame chart before the NFP-Payrolls data are released. The market has bounced from the level of 1.1284 up to the level of 1.1411, but is still trading below the local technical resistance at the level of 1.1421. Any better data than expected might trigger a spike up towards the level of 1.1442 - 1.1471 or even a test of the swing high at 1.1499. The nearest technical support is seen at the level of 1.1354 and might be easily violated if the NFP data will disappoint the global investors.
