Sample Category Title

Canada's employment grew 51k in November, above expectation of 25k. Employment gains were concentrated in full-time work (+54k).

Employment rate was unchanged at 60.6%. Unemployment rate jumped from 6.5% to 6.8%, as more people are looking for work. Labor force participation rate rose 0.3% to 65.1%.

Total hours worked was down slightly by -0.2% mom but up 1.9% yoy. Average hourly wages grew 4.1% yoy, slowed from 4.9% yoy in October.

Full Canada employment release here.

US non-farm payroll employment grew 227k in November, close to expectation of 218k. That's notably higher than the average of 186k monthly growth over the prior 12 months.

Unemployment rate rose from 4.1% to 4.2%, above expectation of 4.1%. Labor force participation rate was at 62.5%, ticked down from 62.6%.

Average hourly earnings rose 0.4% mom, above expectation of 0.3% mom. Over then past 12 months, average hourly earnings rose 4.0% yoy.

Full US NFP release here.

BoE MPC member Swati Dhingra, often viewed as the most dovish voice within the committee, reinforced her call for policy easing during an interview with Bloomberg TV today.

Dhingra highlighted the "very restrictive stance" of current monetary policy, arguing that high interest rates are dampening consumption, investment, and supply capacity. She stressed, “We should be easing policy more” to alleviate the strain on living standards and pave the way for economic normalization.

Dhingra pointed to easing wage pressures and declining service inflation as key indicators supporting a shift towards lower rates.

She advocated for a "gradual" approach to rate cuts, suggesting the Bank Rate should eventually settle between 2.5% and 3.5%, her updated estimate of the “neutral rate.” Notably, she acknowledged that this estimate has risen since BoE’s 2018 estimate of 2%-3%.

Turning to the potential fallout from a global trade war, Dhingra noted its indirect effects could significantly harm productivity and business adaptability. While she believes the direct impact on UK growth and inflation might be "limited," she cautioned that secondary effects, such as supply chain disruptions and reallocation challenges, would be far more damaging.

The Canadian dollar is showing small gains on Friday. In the European session, USD/CAD is trading at 1.4041, up 0.12% at the time of writing.

Canada’s job growth expected to climb

Canada releases job growth for November later today. The market estimate stands at 25 thousand, compared to 14.5 thousand in October.

The modest growth in job creation has not kept pace with the labor force, which has rapidly expanded as a result of high immigration to Canada. This has resulted in a high unemployment rate, which is expected to creep up to 6.6% in November from 6.5% a month earlier.

With inflation running at 2%, the Bank of Canada’s target, employment data has become a key factor for the central bank with regard to rate policy. The BoC has cut interest rates four times this year, including a jumbo 50-basis point rate cut in October.

What will the Bank of Canada do at the Dec. 11 meeting? The market is split on whether the BoC will cut rates by 25 or 50 bp at the meeting. BoC policymakers can point to low inflation and a cool labor market to support the case for an oversized 50-bp cut. However, an argument can be made for a modest 25 bp cut. The government has announced stimulus in the form of a temporary sales tax holiday, which could cause some growth and in turn inflation. As well, the battle with inflation is not yet won, as core inflation remains around 2.5%, above the BoC’s target of 2%. The bottom line? Next week’s rate decision is shaping up as a close call between a 25 bp and 50 bp rate cut.

The US wraps up the week with the nonfarm payroll report. With inflation largely tamed, job growth is once again a key release that should be considered a market-mover. The November report is expected to rise to a respectable 200 thousand, after a weak gain of 12 thousand in October, which was driven downwards by hurricanes and work stoppages at Boeing.

USD/CAD Technical

• USD/CAD is testing resistance at 1.4039, followed by resistance at 1.4068
• 1.3996 and 1.3967 are the next support levels

The euro is steady on Friday after jumping 0.7% a day earlier. In the European session, EUR/USD is trading at 1.0581, down 0.06% at the time of writing.

The eurozone wraps up the week with the GDP and job growth reports and the market is expecting an improvement. Third-quarter GDP is expected to improve to 0.4% q/q from o.2% in the second quarter. Job growth if forecast to tick upwards to 0.2% q/q, up from 0.1% in Q2.

In France, the political chaos continues. A no-confidence vote passed this week and has left the country without a functioning government. Prime Minister Michel Barnier resigned on Thursday after just three months in office. President Emmanuel Macron said he will name a new prime minister shortly but the political crisis could push up French interest rates and the country’s large debt.

Germany, once the powerful locomotive of the eurozone, has faltered badly and has hampered growth in the eurozone. This week’s German manufacturing data was dismal. The Manufacturing PMI remains mired in contraction and was unchanged at 43.0 in November. Factory orders for October declined by 1.5% after a 7.2% gain a month earlier. On Friday, industrial production fell 1% in October, after a 2% decline in September and shy of the market estimate of 1.2%.

The German Services PMI slipped into contraction in November and there is political instability, as the coalition German government collapsed in November. A snap election has been scheduled for Feb. 23, 2025.

The US wraps up the week with the nonfarm payroll report. With inflation largely contained, the employment growth is once again a key release can move the US dollar. The November report is expected to rise to a respectable 200 thousand, after a weak gain of 12 thousand in October, which was driven downwards by hurricanes and work stoppages at Boeing.

EUR/USD Technical

• EUR/USD faces resistance at 1.0615 and 1.0644
• 1.0562 and 1.0533 are providing support

The dollar index is holding within a narrow range, in a quieted pre-NFP mode on Friday morning, but remains at the back foot following 0.5% drop previous day, which generated initial negative signal on close below bull-channel support line (106.08) also near Fibo 23.6% retracement of 99.87/108.04 uptrend.

Fresh bears found footstep just above next pivotal supports at 105.65/57 (daily Kijun-sen / Nov 27 higher low) and expected to remain in play while holding above these levels.

Technical studies on daily chart are mixed, as MA’s hold in a mixed mode (10/20 DMA bear cross vs 55/200 DMA golden cross, while 14-d momentum is heading north but still in the negative territory.

Bearish scenario would require firm break of 105.65/57 pivots to complete a failure swing pattern on daily chart and open way for deeper fall (150 zone marks next strong supports), while stronger bounce and possible weekly close within the bull channel, would signal another downside rejection and possible formation of a double bottom.

The dollar is looking for fresh direction signal from release of US Nov labor report today, with NFP expected to increase by 200K, following Oct slump to 12K (which is seen as temporary phenomenon, sparked by hurricane and strike of Boeing employees).

Average earnings are forecasted for 0.3% rise vs 0.4% rise previous month, while inflation in November is expected to tick higher to 4.2% from 4.1% in October.

Overall, the data suggest a healthy easing in the US labor sector that adds support to Fed’s signals for 25 basis point rate cut in the next policy meeting.

On the other hand, any significant NFP divergence from forecasted levels would generate stronger direction signals, with dollar to receive fresh boost on upside surprise and come under more pressure in November NFP disappoints.

Res: 106.10; 106.24; 106.71; 107.00.
Sup: 105.57; 105.00; 104.50; 104.08.

EURUSD is consolidating under new one-week high, posted after Thursday’s 0.8% jump.

Fresh advance broke again above Fibo resistance at 1.0563 (38.2% of 1.0936/1.0332), after last week’s recovery stalled at this zone, despite registering a weekly close above 1.0563.

Signals on daily chart are mixed, with 14-d momentum entering negative territory and conflicting MA’s, but countered by developing positive signal on weekly chart, following a bear trap under 1.0405 Fibo level (50% retracement of 0.9535/1.1275) and subsequent bounce.

However, confirmation of bullish signal will require not only repeated weekly close above 1.0563, but extension above former recovery top (1.0593) and violation of next key barrier at 1.0634 (50% retracement / daily Kijun-sen).

Otherwise, repeated upside failure would keep the downside vulnerable, with close below 1.0563 to weaken near-term structure and risk test of lower pivot at 1.0511 (daily Tenkan-sen) loss of which will be bearish.

From the fundamental side, unexpected drop in German Industrial production in October and Eurozone Q3 GDP in line with forecasts, did not have significant impact on the single currency, with focus shifting on US NFP data for possible stronger direction signal..

Res: 1.0597; 1.0609; 1.0634; 1.0682.
Sup: 1.0563; 1.0511; 1.0475; 1.0424.

• EURUSD fights for a bullish reversal above 1.0600
• Upward moves may face choppy conditions

EURUSD has started to show some signs of life. The pair seems to have formed an inverse head and shoulders pattern around a two-year low of 1.0330 in the four-hour chart, sparking speculation that a positive turnaround could be around the corner.  

The soft upturn in the 20- and 50-period simple moving averages (SMAs) are endorsing the encouraging trend signals. However, for the latest rebound to gain real traction, a sustainable close above the neckline at 1.0590-1.0600 is needed.

That said, the way higher may not be entirely smooth, with new obstacles likely emerging around the 200-period SMA at 1.0655 and then near the tentative resistance line at 1.0700. Even higher, the pair could face another wall somewhere between the 50% Fibonacci of the September-November downleg and the 1.0800 number.

On the flip side, if the pair slides below the 23.6% Fibonacci retracement at 1.0540—where the 20- and 50-period SMAs are converging—immediate support could be found around the 1.0500 level. A failure to hold at this point could open the door to further losses, potentially targeting the 1.0460 area or even the 1.0380-1.0400 zone.

In brief, EURUSD is poised for an upside reversal, with the 1.0600 level acting as a crucial confirmation point. However, a potential bullish trend may not take shape unless the pair breaks decisively above 1.0700.

AUDUSD remains near its lowest levels since August touched on Wednesday and looks vulnerable to further declines. However, traders are holding back from making big moves and are waiting for the US Nonfarm Payrolls (NFP) report, which will provide clues on the Federal Reserve's (Fed) next steps regarding interest rate cuts. This key jobs data will likely impact the US Dollar (USD) and influence the AUDUSD pair's movement.

Expectations that the Fed might not ease its policies as much as previously thought, along with growing caution in global markets, are keeping the USD supported. Meanwhile, the Australian Dollar (AUD) faces pressure due to increasing bets that the Reserve Bank of Australia (RBA) could cut interest rates soon, following weaker-than-expected GDP data earlier this week.

Adding to the challenges for the Aussie Dollar are ongoing geopolitical tensions, economic concerns in China, and uncertainty about US President-elect Donald Trump's trade tariffs. These factors suggest that the Australian Dollar could face further downside risks. Even if AUDUSD manages a slight recovery, it may not last long and could be seen as an opportunity for sellers. As a result, the pair is on track to close the week lower, potentially marking its weakest weekly close of 2024.

AUDUSD – W1 Timeframe

The AUDUSD price chart on the weekly timeframe shows prices ranging within a wedge pattern, with the current price resting on the trendline support of the wedge pattern. There is also a critical pivot zone right around the current price, as highlighted by the two horizontal red lines. Although the demand zone could be more precise in the weekly timeframe, we will look to the daily timeframe for clarity.

D1 Timeframe

We see that the wick hides the demand zone on the daily timeframe. In such a situation, the Fibonacci retracement tool can be trusted to clarify the matter. Hence, the price is around the 88% Fibonacci retracement level, and a reversal may soon be underway.

Analyst's Expectations:

• Direction: Bullish
• Target: 0.67650
• Invalidation: 0.62608

Market Picture

The crypto market cap has shrunk to $3.6 trillion, down around 2% in the last 24 hours. The main volatility has been in Bitcoin, with Ethereum affected to a lesser extent and a barely noticeable ripple at the altcoin level. This is a strong signal of a short-term shakeout but not a change in sentiment.

Thursday’s US session saw a strong wave of profit-taking, which quickly turned into a liquidation of marginal long positions. Both bullish and bearish liquidation created a swing range of almost 13% in less than 24 hours. At its lowest point, the price of Bitcoin was down to $91,000. By early European trading, it had stabilised just below $98,000, back to where it started the day on Thursday.

Other stars of recent flights are also cooling off. Tron has stabilised around $0.32, roughly in the middle of this week’s range. XRP is cooling off, pulling back to $2.30, which is near the 76.4% level from the early November lows.

News Background

There is a strong correlation between Bitcoin’s rise above $100,000 and Tether’s increased supply of USDT stablecoin, said CEO Paolo Ardoino. Over the past 20 days, the stablecoin’s capitalisation has increased by approximately $16 billion.

CryptoQuant identified significant institutional demand from US investors based on Coinbase’s premium dynamics.

Mining company Hut 8 will sell $500 million worth of shares. The funds will be used to expand the company’s data centre infrastructure and to purchase Bitcoin as a strategic reserve.

Venture capital firm Andreessen Horowitz (a16z) sees the integration of AI with blockchain, tokenisation and stablecoins as key areas of development for the crypto industry in 2025.

Justin Drake, one of Ethereum’s core developers, said the Solana network, touted as a “killer” of Ethereum, is not really a threat or even a direct competitor.

Arkham Intelligence noted that the bankrupt Mt. Gox exchange moved 24,052 BTC ($2.47 billion) to an unknown address. This is the first major move of the exchange’s assets since 12 November, when the platform sent 2,500 BTC to two unknown addresses.