Non-farm payrolls report from US will be the most important even today, which could determine whether Dollar could extend the current rebound. Markets are expecting 160k jobs added in December. Unemployment rate is expected to be unchanged at 3.50%. Average hourly earnings are expected to grow 0.3% mom.
Looking at other employment data, ISM manufacturing employment dropped from 46.6 to 45.1, staying in deep contraction. But ISM services employment remained firm in expansion, down slightly from 55.5 to 55.2. The relative strength was clearly reflected in private sector jobs too. ADP jobs grew 202k, with 173k in services jobs and 29k in goods-producing jobs. Four-week moving average of initial claims rose slightly to 224k, up from 218k. Overall, services sector is the key to whether NFP would shine.
Gold should have topped out in near term at 1611.37, ahead of 61.8% projection of 1266.26 to 1557.04 from 1445.59 at 1625.29. We’re also seeing the five wave sequence from 1160.17 as being completed. Thus, it should now be in a medium term corrective pattern. Downside target of the correction is 1145.59, which is close to 38.2% retracement of 1160.17 to 1611.37 at 1439.01. But that would very much depends on today’s NFP as well as Dollar’s reaction.
