Majors still fluctuating awaiting a nonfarm bombshell!

By @ibtimes on

Very thin trading is what we can see today, where the market is focused on the US jobs report. The dollar index traded within a very tight range between the low of 77.68 and the high of 77.82. The tight range trading engulfed the euro, sterling, and the Japanese yen amid the prevailing calm before the storm!

The US jobs report is very influential on financial markets and with the expectations for improvement in January the market is further tensed, awaiting the confirmation of a stronger start for 2011. Expectations are that the nonfarm payrolls will rise by 140-146 thousand jobs in January, and improvement from the 103,000 added in December.

Nevertheless, the tension is on its peak, especially with the expected rise in unemployment to rise to 9.5%.

For the euro, the common currency fell sharply versus the dollar and its major counterparts as well yesterday, after Trichet disappointed markets by not adopting a hawkish stance as expected.

Today, the euro versus the dollar traded in a tight range so far among 1.3615 and 1.3642 consolidating among the 1.3605 support and the nearest resistance at 1.3675 without reaching any of those levels on the low volume in the market.

For the second consecutive day, sterling decline versus the dollar after a clear profit taking wave in the market. The pair today was relatively calm as well between the high of 1.6170 and the low of 1.6104. The pair is trading around 1.6125 and stability again above this level supports the return to the upside move, while failure to stay above it will drive the pair towards 1.6090 and maybe 1.6040.

The dollar traded positively versus the yen for the third day, though still within the range set last Tuesday when the dollar strongly decelerated versus the yen. Trading today settled between 81.48 and 81.70 and the upside trend is seen for the USDJPY.

Trading below 81.85 keeps the strength for the yen and the dollar will remain relatively weak, while breaching 81.05 and stability below it will keep the yen biased for gains and only stability above 82.55 will drive the pair higher again.

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