As the new week begins, not much will happen in the major currency arena. US jobs data released here on Friday served as a reaffirmation that the Fed will cut interest rates by 25 basis points this month. And that's basically the signal that market players have to deal with right now. The probability of such a rate cut is currently about 86%.
While the key nonfarm payrolls figure may be “strong,” it is still likely skewed by October's weak results. The main causes were bad weather caused by Hurricane Milton and a Boeing strike. Meanwhile, the unemployment rate rose to its highest level since July, 0.8% above the cycle low. This confirms once again that the labor market is weakening.
All in all, this reaffirms the possibility that the Fed will cut rates again before potentially pausing next year to reassess the situation under President Trump. This week's U.S. consumer price index is the next big risk event to watch, but it won't offer much unless there's a big surprise.
But for now, market players may have to wait until next week's Fed to solidify their belief further.
USD/JPY remains more rangebound around 150.00, while EUR/USD briefly rose above 1.0600 after Friday's employment report, but has now fallen to around 1.0550. The previous low moved to test the confluence with the major hourly moving average, currently at 1.0536.
On top of that, AUD/USD remains anchored near August lows as it aims to break below 0.6400. And USD/CAD appears to be hoping to secure a major technical breakout above 1.4100. So this is one of the charts to watch for December trading and could be very interesting heading into next year.
