As we head into Friday, January 10, 2025, global markets are preparing for a pivotal session, driven by the release of key U.S. labor market data, including Nonfarm Payrolls and Average Hourly Earnings. The U.S. dollar remains the focal point as these releases could shape expectations for Federal Reserve policy in the coming months.
In the currency markets, the EUR/USD pair traded within a narrow range, reflecting market caution ahead of the labor data. The USD/CAD pair showed a strong reaction to oil price fluctuations and Canadian labor figures, while the USD/JPY continued to trend higher amid risk-on sentiment, with traders awaiting clarity from the U.S. labor data.
EUR/USD
Technicals in Focus
The EUR/USD pair remained range-bound, closing near the 1.0295 level as traders held positions ahead of the critical U.S. Nonfarm Payrolls data. The MACD is slightly bearish, reflecting mild downward momentum, while the Stochastic Oscillator remains in oversold territory, indicating potential for a corrective bounce. The 14-day RSI remains neutral, suggesting consolidation in the near term.
Trading Strategy: Neutral to Sell
- Sell Zone: Below 1.0300 with targets at 1.0270-1.0250 and 1.0220-1.0200.
- Stop Loss: Above 1.0330.
- Buy Zone: Above 1.0330 with targets at 1.0360-1.0380 and 1.0410-1.0430.
USD/CAD
Technicals in Focus
The USD/CAD pair experienced significant volatility, closing near the 1.4395 level after Canadian labor data showed weaker-than-expected employment growth. The pair also reacted to crude oil prices, which have seen increased fluctuations in recent sessions. On the technical side, the MACD remains neutral, indicating indecision, while the Stochastic Oscillator is slightly overbought, signaling potential for a short-term pullback.
Trading Strategy: Neutral to Buy
- Buy Zone: Above 1.4400 with targets at 1.4430-1.4450 and 1.4480-1.4500.
- Stop Loss: Below 1.4370.
- Sell Zone: Below 1.4370 with targets at 1.4340-1.4320 and 1.4290-1.4270.
USD/JPY
Technicals in Focus
The USD/JPY pair extended its gains, closing near the 158.03 level, as the yen weakened amid risk-on sentiment and higher U.S. Treasury yields. The MACD is bullish, reflecting strong upward momentum, while the Stochastic Oscillator is approaching overbought territory, suggesting potential for a near-term correction. The 14-day RSI remains elevated, indicating strong buying pressure.
Trading Strategy: Neutral to Buy
- Buy Zone: Above 158.10 with targets at 158.40-158.60 and 158.90-159.10.
- Stop Loss: Below 157.80.
- Sell Zone: Below 157.80 with targets at 157.50-157.30 and 157.00-156.80.
Market Outlook
Looking ahead, the U.S. labor market data, including Nonfarm Payrolls (forecast: 164K), Average Hourly Earnings (forecast: 0.3%), and the Unemployment Rate (forecast: 4.2%), will be critical in shaping market sentiment. These figures will provide insights into the health of the U.S. economy and could influence expectations for Federal Reserve policy in 2025.
In Canada, the weaker-than-expected employment change and higher unemployment rate (6.9%) have placed additional pressure on the CAD, with USD/CAD likely to remain sensitive to both U.S. data and oil price movements.
For the yen, the USD/JPY pair will continue to track U.S. Treasury yields and risk sentiment, with key resistance levels in focus as traders monitor upcoming U.S. data releases.
Overall, markets are expected to remain highly volatile as traders digest these critical data releases and position themselves for the next phase of global monetary policy developments.