US non-farm payroll employment is again a major focus. Markets are expecting 425k job growth in October. Unemployment rate is expected to tick down by 0.1% to 4.7%. Average hourly earnings are expected to grow 0.4% mom.
Looking at related data, ISM manufacturing employment rose from 50.2 to 52.0. But ISM services employment dropped from 53.0 to 51.6. ADP private jobs grew 571k, rose slightly from prior month’s 523k. Four-week moving average of initial jobless claims continued to trend down, notably, from 344k to 285k.
All in all, today’s NFP will likely be a solid one, affirming Fed’s tapering plan. The main question ahead is whether wage growth would continue in a strong trend, the pushes up inflation, and force Fed for an earlier hike. Strong wage growth could push Dollar index out of the near term range.
Dollar index is now sitting in range below 94.56 short term top. The support from 55 day EMA is a bullish sign. Yet, it will have to break through key long term fibonacci resistance at 94.46 (38.2% retracement of 102.99 to 89.20) decisively to confirm medium term bullishness. In the case, we’d probably seen upside acceleration ahead to 61.8% retracement at 97.72. However, break of 93.27 support will suggest rejection by 94.46, and turn near term outlook bearish for deeper pull back.
