What is moving the market? What are the technicals saying for the major currency pairs?

A new week begins with the US and Canadian jobs report the highlight.For today, stocks are higher, US yields are lower and the USD is falling vs all the major currencies with the greenback moving the most vs the AUD (down -1.11%) and the NZD (-1.09%). It is also lower by about -0.85% vs the EUR, CAD and GBP as the markets react to Trump tariff news.

The video above outlines the technicals driving the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD to start the new trading day.

The key jobs reports will be released on Friday. US nonfarm payrolls is expected to show a gain of 154K versus 227K last month. The unemployment rate is expected to remain steady at 4.2%. Canada unemployment rate is also expected to remain unchanged on the month (at 6.8%), with the employment change of +24.5 K versus 50.5 K last month.

Other key data for the week includes the

• ISM services PMI on Tuesday. Expectations are 53.2 versus 52.1
• Swiss CPI on Tuesday with expectations of -0.1% vs -0.1% last month.
• JOLTS job openings will also be released on Tuesday and are expected to rise modestly to 7.77M from 7.74 million
• Australia’s CPI YoY will be released at 7:30 PM ET on Tuesday (Wednesday in Australia) wth the expectations of 2.2% vs 2.1% last month
• ADP Non farm employee change will be released on Wednesday and is expected at 131K versus 146K last month.
• FOMC meeting minutes will be released at 2 PM on Wednesday. The Fed at the last meeting decreased rates by 25 basis points but also forecast 2 rate cuts in 2025 versus 4 rate cuts in its previous estimate from September.

Moving the market.

• Trump Proposed Tariff Plan: The Washington Post reported that Trump aides are considering tariffs on critical imports tied to national or economic security, applied to all countries but limited to specific sectors.
• Market Impact: The dollar fell on this news, with USD/JPY dropping from 157.80 to 156.83 and EUR/USD rising from 1.0342 to a high of 1.0432

The plan is thought to be an easier shock and spread out.

In the economic data released in Europe today:

• German Prelim CPI m/m: Actual 0.4%, Forecast 0.3%, Previous -0.2% →HIGHER
• Retail Sales y/y (CHF): Actual 0.8%, Forecast 1.3%, Previous 1.5% → LOWER
• Spanish Services PMI: Actual 57.3, Forecast 54.1, Previous 53.1 → HIGHER
• Italian Services PMI: Actual 50.7, Forecast 50.0, Previous 49.2 → HIGHER
• French Final Services PMI: Actual 49.3, Forecast 48.2, Previous 48.2 → HIGHER
• German Final Services PMI: Actual 51.2, Forecast 51.0, Previous 51.0 → HIGHER
• Eurozone Final Services PMI: Actual 51.6, Forecast 51.4, Previous 51.4 → HIGHER
• Sentix Investor Confidence (EUR): Actual -17.7, Forecast -17.7, Previous -17.5 → MET
• UK Final Services PMI: Actual 51.1, Forecast 51.4, Previous 51.4 → LOWER

China’s services sector expanded faster in December 2024, with the Services PMI rising to 52.2 (expected: 51.7, prior: 51.5), driven by strong domestic demand and promotional efforts, marking the quickest new business growth in five months. However, export business declined, employment fell due to cost concerns, and backlogs increased amid rising input and wage costs. Selling prices rose for the first time in six months, reflecting heightened cost pressures. While government policies bolstered sentiment, business confidence dipped near its lowest level since March 2020 due to competition and weak international trade.

The China Composite PMI declined to 51.4 (prior: 52.3) as weak manufacturing output offset services growth, with slowed new orders and declining employment reflecting reduced private sector optimism. Overall, the sector shows steady growth but faces challenges from global trade and cost pressures.

The US stocks rose sharply on Friday and are trading higher today. The major indices started the new year with a modestly lower close for the first week. The futures are implying:

• Dow +172 points (rose 339.86 points or 0.80% on Friday)
• S&P +47 points (rose 73.92 or 1.26% on Friday)
• Nasdaq +231 points (rose 340.88 points or 1.77% on Friday)

IN the US debt market, the yield are lower:

• 2 year 4.247%, -3.1 basis points
• 5-year 4.383%, -2.6 basis points
• 10 year 4.579%, -1.6 basis points
• 30 year 4.798%, -1.5 basis points

In other markets:

• Crude oil rose last week on China hopes and freezing temps and are rising today with the price up $0.53% or 0.71% at $74.53
• Gold is trading unchanged at $2646
• SIlver is up $0.71 or 2.40% at $30.31
• Bitcoin is trading at $99,315. The high today reached just short of $100K at $99,857

In the three major curencies, technically speaking:

EURUSD. The EURUSD moved higher on the Trump tarriff news and that took the price toward the 50% midpoint of the move down from the December high at 1.0426. Get and stay above would target a key swing area which should be a tough area to break on the first look. That area comes between 1.0448 and 1.0461

USDJPY: The USDJPY has moved below the 100/200 hour MA on the Trump tariff news leaving those MAs at 157.17 to 157.318 as topside resistance. Staying below those levels tilts the bias more to the downside.

On the downside, the pair is still above the swing area on the downside that is between 155.88 and 156.06 (see red numbered circles on the chart below). With the price between those levels, there is room for ups and downs (the price is at 156.40 currently). HOwever, those levels will define the top and bottom levels for the pair as the week gets started. Stay below the 100/200 hour MA is more bearish, but the low extreme of the Red Box, still needs to be broken to increase the bearish bias further.

GBPUSD:The GBPUSD moved higher off of the Trump tariff news and in the process extended above the 100 hour MA and swing area between 1.2475 and 1.2487, followed by the 200 hour MA at 1.25085. The 200 hour MA needs to stay broken to keep the buyers in control. Also on the topside, are the 38.2% of the move down from the December high at 1.25269 (close support today).

On the topside, the 50% and the falling 100 bar MA on the 4-hour chart comes in at 1.2581. Those levels will need to be broken to increase the bullish bias today and going forward.

This article was written by Greg Michalowski at www.forexlive.com.