• USD Outlook: November’s NFP report (expected ~220k) will guide the dollar’s direction, with sub-200k seen as weak and over 300k challenging expectations of a Fed rate cut on December 18.
• Fed Focus: A rise in unemployment to 4.2% supports a rate cut, while stability at 4.1% could bolster the dollar by hinting at a Fed pause.
• DXY Support: Despite the euro’s rebound pushing DXY below 106, dollar bulls see any NFP-driven weakness as a buying opportunity, expecting DXY to hold above 105.60/70.
• EUR/USD: A modest recovery in EUR/USD faces resistance near 1.0630/0660, with downside risks persisting and a year-end target of 1.05 intact.
• GBP/USD: Holding near 1.2770, GBP awaits NFP data for cues. A strong report could weigh on the pair by reinforcing dollar strength.

USD: Jobs Data to Steer Dollar Direction

The dollar has been riding high on a two-month Trump-fueled rally, with investors optimistic about its prospects into 2025. However, today’s November jobs report could challenge this momentum.

Analysts believe weather and Boeing strikes slashed about 110k from last month’s figures, leaving consensus at 220k for today. A sub-200k number might signal weakness, while a surprise above 300k could delay the Fed’s expected December 18 rate cut. Currently, a Fed cut seems likely, particularly if unemployment edges up to 4.2%. However, a steady 4.1% rate might give the Fed reason to pause and keep the dollar firm.

Despite the euro’s recent rebound pushing DXY below 106, dollar bulls remain confident. Even if NFP disappoints, they view any weakness as a buying opportunity, expecting the DXY to hold above 105.60/70.

EUR: Short-Lived Bounce

EUR/USD saw a slight recovery yesterday as bond markets eased concerns over French political risks, narrowing the OAT-BUND spread. However, broader eurozone challenges, including disappointing French growth, keep EUR/USD’s upside limited.

Today’s eurozone Q3 GDP figures and the US NFP report will shape EUR/USD’s next move. While protective buy stops above 1.06 could trigger a brief spike, resistance around 1.0630/0660 may cap gains. Downside risks persist, with a year-end target still at 1.05.

GBP: Cautiously Holding Ground

GBP/USD is steady near 1.2770 after benefiting from weaker-than-expected US Initial Jobless Claims. Investors await today’s NFP release for further direction.

Expectations are for 200k new jobs in November, up from October’s modest 12k gain, which was dampened by hurricanes and Boeing strikes. Unemployment is projected to rise to 4.2%. If NFP surprises to the upside, it could pressure the Fed to reconsider a December rate cut, potentially weighing on GBP/USD.

For now, muted trading is likely, with the pair tracking broader dollar dynamics.