Forex Today: Markets optimistic ahead of the US Nonfarm Payroll report

Valeria Bednarik FXStreet

What you need to know on Friday, October 10:

Markets were in a better mood on Thursday, amid news that US Senate majority leader Chuck Schumer announced an agreement on extending the debt ceiling by $408 billion until early December.

Also, gas prices declined in Europe, taking off some of the pressure seen these days. Gas prices soared to records this week amid supply concerns, easing today after US President Vladimir Putin said it would consider increasing gas supplies. Putin said to be thinking about a “carefully” possible increase in gas supplies, as the current hike in prices is not beneficial for Russia. “The high prices do not meet Russia's interests and the market needs to be stabilized as soon as possible,” Deputy Prime Minister Alexander Novak added.

Crude oil prices initially fell, but finished the day with substantial gains, with WTI trading at around $78.80 a barrel at the end of the day.

Gold traded with a softer tone amid dominant risk appetite, although given the decreased dollar’s demand, the bright metal held within familiar levels. Spot gold settled at around $1,756 a troy ounce.

The EUR/USD pair held around 1.1550, unable to take advantage of the broad dollar’s weakness, as dismal EU data keeps undermining demand for the shared currency. GBP/USD posted a modest advance and settled around 1.3620. Commodity-linked currencies were the best performers, reaching fresh weekly highs. AUD/USD trades around 0.7310 while USD/CAD hovers around 1.2540.

Safe-haven currencies edged lower against the greenback, as US government bond yields recovered toward the upper end of their weekly range. Also, global equities posted substantial gains.

Market attention now shifts to the US Nonfarm Payroll report. US Federal Reserve chief Jerome Powell has said that a good employment report could be enough to convince him on tapering, hence the relevance of the figures.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.