The US dollar index rose slightly ahead of important NFP data. The numbers are expected to show that the economy added 185k jobs in May. This will be lower than the 263K created in April. The private nonfarm payrolls are expected to be 175K, lower than April’s 236k. The unemployment rate is expected to remain unchanged at 3.6% while the participation rate is expected to increase to 62.9%. The average hourly earnings are expected to remain unchanged at 3.2%. On Wednesday, data from ADP showed that the economy created just 27k jobs.
The Japanese yen weakened slightly after the country released weak household spending data. In April, the housing spending is expected to have declined by -1.4%, which was lower than the 0.1% gain in March. Investors were expecting the spending to decline by -0.3%. In April, the household spending increased by 1.3%, which was lower than the expected 2.6%. While the country’s unemployment rate is at historic lows, it has failed to increase inflation, which means that the BOJ could hold rates at the current levels for a longer period.
Later today, investors will receive the unemployment rate from Switzerland. The unemployment rate is expected to remain unchanged at 2.4%. In Germany for April exports are expected to decline by -0.9% while imports are expected to decline by -0.2%. The trade surplus is expected to decline to 18.6 billion euros. In France, the trade deficit is expected to decline to 4.9 billion euros for May. In Canada, the unemployment rate is expected to remain unchanged at 5.7% while the participation rate is expected to drop slightly to 65.8%. The economy is expected to have created 8K jobs in May.
EUR/USD
The EUR/USD pair declined to a low of 1.1266 ahead of the US NFP data. The price is along the lower line of the Envelopes indicator. The RSI is slightly below the overbought level of 70. The price is also between the 100% and 61.8% Fibonacci Retracement level. Today, the pair could remain within range as traders wait for NFP data.
USD/CAD
The USD/CAD pair has been falling this week. The pair has declined from a high of 1.3565 to a low of 1.3345. On the hourly chart below, the pair is currently along the lower line of the Envelopes indicator while the RSI remains below the oversold level of 30. The Bears Power indicator remains below the neutral level, but the selling momentum is declining. While the downward momentum may continue, the pair could move in either direction after the jobs data.
USD/JPY
The USD/JPY pair has been range-bound this week. The pair is now trading at 108.45, which is slightly higher than the weekly low of 107.80. On the 30-minute chart, this price is slightly above the 25-day and 50-day moving averages. The accumulation/distribution indicator has been moving higher. Today, the pair looks likely to remain within this range before the US NFP data and then move sharply in either direction afterwards.
