A strong US labor market fueled demand for safety by the end of the week. The US Federal Reserve and the European Central Bank take centre stage. EUR/USD is poised to extend its slump in the upcoming days towards 1.0640. The US Dollar turned north this past week, partially losing its pace on Thursday, as speculative interest took a break ahead of the United States (US) employment figures scheduled for Friday. On the contrary, the Euro remained on the back foot as the economic future remains uncertain. As a result, EUR/USD retreated below the 1.0800 mark, edging sharply lower for a second consecutive week. The market mood was mostly sour throughout the week, further driving EUR/USD lower. Moody's credit agency downgraded China's A1 debt rating from stable to negative, citing the increasing risks to growth and the property sector crisis on Tuesday, pushing stock markets down and backing demand for the safe-haven USD. Data shows that the EU is not out of the woods In the last few months, European macroeconomic figures indicated that the Eurozone could suffer a steep recession in the near future, with growth-related gauges reflecting continued economic contraction. And indeed, there were no fresh good news to change such a picture. The EU reported  Retail Sales were down 1.2% YoY in October, while the annualized Gross Domestic Product (GDP) was downwardly revised to 0.0% in Q3. Meanwhile, German Industrial Production contracted by 3.5% YoY in October,  while Factory Orders were down by 7.3% in the same period.  On a positive note, the country confirmed November inflation by the Harmonized Index of Consumer Prices  (HICP) at 2.3% YoY, not far from the European Central Bank (ECB) target, but it is becoming evident the high cost the central bank is paying for taming inflation. The aggressive monetary tightening, now on pause, has taken its toll on economic progress. The final effects are yet to be seen, and despite policymakers pledging to maintain rates higher for longer, a soon-to-come rate cut does not sound that crazy as the risk of a downturn increases month after month. Speculative interest continues to bet against the central bank, looking for the first rate cut in the EU in the second quarter of 2024. United States resilience Across the Atlantic, US data was more encouraging. The November ISM Service PMI resulted in 52.7, up from 51.8 in the previous month and indicating expansion in the sector for the eleventh consecutive month. Meanwhile, employment-related figures fell short of showing a loosening labour market, something the US Federal Reserve (Fed) would welcome to help balance inflation and growth. The Job Openings and Labor Turnover Survey (JOLTS) showed the number of job openings on the last business day of October stood at 8.73 million,  down from 9.35 million in the previous month. Additionally, the ADP Survey on job creation showed the private sector added 103,000 new positions in November, missing expectations of 130,000. The Nonfarm Payrolls (NFP) report released on Friday overshadowed the positive figures. Markets turned risk-averse with a strong outcome, as the country added 199,000 new job positions in November, while the Unemployment Rate declined to 3.7%, both numbers beating expectations. The strong figures cooled rate-cut speculation ahead of the Fed's meeting. A tight labor market increases people's spending power and, hence, pushes inflation up. The contrary happens with a loosening sector, which would maintain the Fed in the on-hold path. It is worth noting at this point that the Fed is also on the higher-for-longer path, as officials have dismissed a potential rate cut multiple times in the first semester of 2024. Still, the tone has become more dovish in the latest appearances, fueling speculation the central bank is paving the way towards a monetary policy shift. Central banks' definitions coming up next The Fed and the ECB will announce their last monetary policy decisions of the year next week and could provide investors with clues on whatever central banks are planning for the upcoming months. The Federal Open Market Committee (FOMC) is expected to keep interest rates on hold in the upcoming December 12-13 meeting as the central bank juggles to take down inflation to its 2% goal while avoiding an economic recession. Ahead of the announcement, financial markets are looking for the first rate cut as soon as March 2024. How the decision affects such a date will set the tone for the USD in the next few months. The ECB faces quite a different scenario ahead of its decision. On the one hand, it seems there is no clear consensus among the Governing Council. Hawks and doves are giving mixed hints on what's next for the central bank, with some officials hinting at rate cuts and others indicating rate hikes are still on the table for 2024. On the other...

Pound Sterling gave up control against the US Dollar, as GBP/USD corrected to a two-week low. A blockbuster week, with central banks' 2023 finale set to rock the Pound Sterling. Downside appears limited for GBP/USD, as strong support aligns near 1.2450. The Pound Sterling snapped a three-week uptrend against the United States Dollar (USD), fuelling a GBP/USD correction to two-week lows below 1.2600. Traders gear up for a central bank bonanza week, which could lead to a spike in volatility for the pair. Pound Sterling gives into the US Dollar comeback GBP/USD reversed the previous week's gains and lost almost 150 pips, as the US Dollar staged a solid comeback against its major counterparts. Weak US JOLTS Job Openings and ADP Employment Change data suggested loosening labor market conditions and affirmed increased expectations of the Federal Reserve (Fed) interest rate cut in March weighing heavily on the US Treasury bond yields. However, this failed to deter US Dollar bulls, as Australian, UK and the euro area peripheral bond yields fell relatively rapidly after traders ramped up rate-cut bets for other central banks. Markets priced in around an 85% chance that the European Central Bank (ECB) will cut interest rates at the March meeting while the odds of the Reserve Bank of Australia (RBA) being done with its hiking cycle also rose after this week's dovish pause. Meanwhile, a quarter-point Bank of England (BoE) rate cut in June next year and a second reduction in September was fully baked in. For the Fed, the probability of a March rate cut stood at roughly 60%. On the data front,  the Institute for Supply Management  (ISM) showed on Tuesday that the Services PMI registered 52.7 in November, firming up from October's reading of 51.8. However, US JOLTS Job Openings slid to more than a 2-1/2-year low of  8.733 million in October. The US  Private payrolls rose by 103,000 jobs last month, the ADP Employment Change data showed on Wednesday, with the previous figure revised lower to show 106,000 jobs added instead of 113,000. The market consensus was for a 130K increase. Meanwhile, there was nothing of note from the UK economic docket, except for the S&P Global final Services PMI, which showed an upward revision to 50.9 from the 50.5 preliminary readout. The UK service providers moved back into expansion mode during November but failed to inspire the Pound Sterling. In the second half of the week, however, British Pound found some support amid a pause in the US Dollar upswing, as traders weighed the prospects of Fed rate cuts ahead of next week's Federal Open Market Committee (FOMC) policy decision. The US Dollar accelerated north on Friday following a stronger-than-anticipated Nonfarm Payrolls (NFP) report. Not only the country added 199K new jobs in November, but the unemployment rate declined to 3.7%. The figures spurred concerns, as they still indicate a tight labor market, which means the Federal Reserve has more to do to maintain inflation under control. Odds for rate cuts in 2024 decreased ahead of the central banks' meetings next week and the US CPI release. Key events to watch out for Pound Sterling traders Pound Sterling traders will be bracing themselves for one of the most eventful weeks of this year, studded with major global central bank final monetary policy announcements. The Fed is set to announce a rate on-hold decision on Wednesday, followed by the BoE's steady policy announcement on Thursday. This time around, it's not just the interest rate decision, the former will publish the Statement of Economic Projections (SEP) – the so-called Dot Plot chart, which will be key to gauging the central bank's interest rates outlook next year. Meanwhile, the BoE's communication in the policy statement will be closely scrutinized, as both, the Fed and the BoE, are expected to embark on the rate cuts trajectory in 2024. The next direction of the GBP/USD pair hinges on the Fed-BoE policy outlooks but volatility is set to remain intense. Ahead of these events, the top-tier Consumer Price Index (CPI) inflation data from the US and the employment report from the UK are likely to provide some trading impetus on Tuesday, as Monday offers a quiet docket on both sides of the Atlantic. On Wednesday, the UK monthly Gross Domestic Product (GDP) data could entertain Pound Sterling markets in the lead-up to the Fed showdown. Meanwhile, the Retail Sales and weekly Jobless Claims will fill up the US docket on Thursday, following the BoE policy outcome. The European Central Bank (ECB) is also due to announce its interest rate decision that day, and hence, could have the EUR/GBP cross-driven 'rub-off' effect on the Pound Sterling on any surprises. Friday will feature the S&P Global preliminary Manufacturing and Services PMI data from the US and the UK. Also, the...

Gold reversed its direction after setting a record-top this week. The near-term technical outlook points to a loss of bullish momentum. Inflation data from the US and the Fed's policy announcements could drive XAU/USD's action. Following an impressive rally at the beginning of the week, Gold turned south and snapped a three-week winning streak. As market focus shifts to next week's key data releases and central bank events, XAU/USD's technical outlook points to a loss of bullish momentum. Gold price retreated sharply after setting a record-high Gold opened with a huge bullish gap and reached a new all-time-high near $2,150 in the early Asian session on Monday as markets reacted to escalating geopolitical tensions. After Yemen's Houthi rebels hit three commercial ships in the Red Sea on Sunday, a US warship responded by shooting down three drones. Yemen's Houthi movement acknowledged that they had targeted two Israeli ships, stating that they were responding to calls from Islamic nations to stand with the Palestinian people. This development revived fears over the Israel-Hamas conflict turning into a widespread crisis in the Middle East. Following the record-setting upsurge, profit-taking triggered a deep correction in XAU/USD and the pair closed in negative territory near $2,030. On Tuesday, the data from China showed that Caixin Services PMI improved to 51.5 in November from 50.4. Later in the day, the US Bureau of Labor Statistics (BLS) reported that the number of job openings on the last business day of October declined to 8.7 million from 9.3 million in September. On a positive note, the ISM Services PMI edged higher to 52.7 in November from 51.8 in October, pointing to an acceleration in the business activity's growth in the service sector. The benchmark 10-year US Treasury bond yield fell more than 2% after mixed US data and helped XAU/USD find a foothold. Employment in the US private sector increased by 103,000 in November, the Automatic Data Processing (ADP) announced on Wednesday. This print fell short of the market consensus of 130,000. Although the risk-averse market atmosphere allowed the US Dollar (USD) to stay resilient against its rivals despite the uninspiring employment data, Gold's downside remained limited as US yields continued to stretch lower. China's trade surplus widened to $68.39 billion in November from $56.53 billion, the General Administration of Customs of the People's Republic of China reported early Thursday. On a yearly basis, imports declined by 0.6% in the same period. Gold managed to hold its ground and closed near $2,030 but the action in financial markets remained choppy ahead of Friday's highly-anticipated US November jobs report. The BLS' monthly publication revealed that Nonfarm Payrolls increased by 199,000 in November. This reading followed October's increase of 150,000 and came in better than the market expectation of 180,000. Moreover, the Unemployment Rate edged lower to 3.7% from 3.9% in October. The benchmark 10-year US Treasury bond yield turned north and advanced beyond 4.2% following the labor market data and forced XAU/USD to retreat below $2,010. Gold price could react significantly to US data and the Fed's dot plot Markets have plenty of data releases and macroeconomic events to keep an eye on next week before holiday trading takes over.  The Consumer Price Index (CPI) data for November will be released on Tuesday. In October, the monthly CPI was unchanged. A negative print in this data could weigh on the USD with the initial reaction and provide a boost to XAU/USD. Investors will also pay close attention to the Core CPI reading, which is expected to increase 0.2% for the second consecutive month. A reading of 0.4% or higher could help the USD find demand. On Wednesday, the US Federal Reserve (Fed) will announce its interest rate decision and release the revised Summary of Projections (SEP), the so-called dot plot. September's SEP showed that policymakers' projections implied one more 25-basis-point rate hike this year and 50 bps of rate cuts in 2024. At this point, it would be a significant bullish surprise if the Fed opted not to leave the policy rate unchanged at 5.25%-5.5%. Market participants will scrutinize the dot plot to try to figure out the timing of the policy shift. According to the CME Group FedWatch Tool, markets are currently pricing in a nearly 60% probability that the Fed will lower the policy by 25 bps as early as March. In case the revised SEP points to a total of 100 bps or more rate cuts next year, US yields could push lower and XAU/USD could gather bullish momentum. On the other hand, a no-change in 2024 rate expectations could have the opposite impact and trigger a USD rally. Fed Chairman Jerome Powell's last press conference of the year could also impact XAU/USD's action following the immediate reaction to the SEP. Powell is likely to push...

EUR/USD went into a consolidation phase below 1.0800 after posting gains on Thursday. Nonfarm Payrolls in the US are forecast to rise by 180K in November. A disappointing jobs report could weigh on the USD ahead of the weekend. EUR/USD benefited from broad-based US Dollar (USD) weakness on Thursday and registered daily gains for the first time since November 28. Early Friday, the pair holds steady slightly below 1.0800 as market participants refrain from taking large positions ahead of the US November jobs report. The positive shift seen in risk mood made it difficult for the USD to find demand in the second half of the day on Thursday and allowed EUR/USD to inch higher. 

Gold price is extending its range-play near $2,030 early  Friday. US Dollar is licking its wounds, as US Treasury bond yields cling to recovery gains. Gold price looks north on a weak US Nonfarm Payrolls report, as the daily chart leans bullish. Gold price is extending its range-play into the fourth straight trading day early Friday, as investors prefer to stay on the sidelines before the release of the all-important Nonfarm Payrolls data later in the day. US Nonfarm Payrolls could offer a fresh boost to Gold price Gold price is treading water, lacking any impetus, as traders refrain from placing any fresh directional bets on the United States Dollar (USD) in the lead-up to the critical US jobs data. The US Dollar is licking its wounds after falling hard in tandem with the USD/JPY pair. The Japanese Yen rallied over 500 pips against the US Dollar on Thursday, smashing USD/JPY to a new four-month low of 141.63 on hopes of a Bank of Japan's (BoJ) policy pivot earlier than expected. Despite the US Dollar sell-off, Gold price failed to benefit, as the US Treasury bond yields rebounded firmly from multi-month lows, diminishing the appeal of the non-interest-bearing Gold price.  Markets resort to repositioning in the US government bonds and the US Dollar, as they seek to lock in profits heading toward next week's Federal Reserve (Fed) interest rate decision. In the meantime, the highly anticipated US labor market data will be closely scrutinized for fresh hints on the Fed's interest rate outlook, with markets pricing roughly 60% odds of a rate cut in March. The NFP data is expected to show that the US economy added 180K jobs in November, as against the previous job growth of 150K while wage inflation, as measured by Average Hourly Earnings, is seen rising 4.0% YoY in November. The latest US ADP and JOLTS Job Openings data pointed to loosening labor market conditions. If a weak US NFP print confirms that, the Fed rate cuts are likely to shoot up, smashing the US Dollar alongside the US Treasury bond yields. In such a case, Gold price is likely to reclaim the $2,050 barrier on a sustained basis. Contrarily, should the data outpace expectations, markets could use that as an excuse for profit-taking ahead of the Fed verdict. The Gold price correction could then resume toward the $2,000 mark. Gold price technical analysis: Daily chart As observed on the daily chart, Gold price has been making higher lows following Monday's volatile trading, suggesting that there is more scope for a fresh upside. The 14-day Relative Strength Index (RSI) indicator edges higher above the midline, backing the bullish potential in Gold price. Gold buyers need to find acceptance above the $2,050 region to unleash additional advances toward the $2,100 threshold. Fresh buying opportunities will pop up above the latter, targeting the all-time highs of $2,144. On the other hand, the immediate support is seen at Tuesday's low of $2,009, below which the $2,000 threshold will be a critical test for bullish traders. At that level, the 21-day Simple Moving Average (SMA) aligns. The next downside cushion is then seen at the $1,980 round figure.

AUD/USD Current Price: 0.6606 Improvement in risk appetite helped the rebound of AUD/USD.  US Dollar loses momentum and retreats amid lower Treasury yields ahead of NFP.  The pair stays above the key 20-day SMA, with further gains likely while above 0essential90. The AUD/USD rebounded from the 20-day Simple Moving Average (SMA) and two-week lows at 0.6525, reaching levels above 0.6600. The sharp rebound took place amid an improvement in market sentiment and on the back of a weaker US Dollar. Trade data from Australia showed a 0.4% increase in exports in October, with the annual rate improving from -11.9% to -14.3%; imports declined by 1.9%, with the annual rate at 2.4%. Chinese exports turned positive from a year ago for the first time since April, but imports were lower than a year ago, suggesting that weak domestic demand persists. The US Dollar weakened on Thursday and drove the AUD/USD pair to the upside. A decline in US Treasury Yields weighed on the Greenback. The momentum for the Greenback also faded, affected by an improvement in risk sentiment. Data from the US showed that Initial Jobless Claims rose to 220,000 in the week ending December 2, slightly below the expected 222,000, while Continuing Claims fell to 1.816 million. Despite the recovery, overall claims point to a softer labor market, like the ADP report indicated and is what market participants are expecting from Friday's Nonfarm Payroll report. However, the impact from labor market data could be limited if it does not show major surprises. Markets see the Federal Reserve (Fed) not raising rates further and speculate about when it will start cutting. The numbers are unlikely to alter current expectations. AUD/USD short-term technical outlook The AUD/USD has remained above the 20-day Simple Moving Average (SMA) and is also above the 200-day SMA. It is still in negative for the week but has trimmed its losses. The Australian Dollar isn't ready to resume its upside move, but the correction has weakened. The technical indicators on the daily chart are now more balanced. On the 4-hour chart, the price is above the 20-SMA and above 0.6600. While it stays above this level, further gains seem likely. However, it would need to break above 0.6630 for a clearer outlook, opening the door for 0.6660. On the downside, a break below 0.6575 could lead to a test of 0.6545. Support levels: 0.6595 0.6565 0.6525  Resistance levels: 0.6630 0.6660 0.6690 View Live Chart for the AUD/USD