US November NonFarm Payrolls brings an end to a very volatile week in the markets highlighted by waves of USD strength and OPEC Meeting Oil Production Deal that sent OIL/USD above $50 a barrel for the first time in months.
A strong US NFP number (forecast is 177k vs. 161k previously) will do little to change the December FOMC meeting rate hike decision as this is priced in at nearly 100% already. It would take a serious miss to the downside to even open the possibility that the FED does not raise rates in 2 weeks time.
Traders attention will switch to Sunday’s Italian Referendum which is being portrayed as a major test how pro or anti EU Italy currently is. A ‘no’ vote win will open the door for a fresh election next year and this could add to expected European political uncertainty.
EUR/USD downside has to contend with the major 1.0465 low from March 2015 that has support so far and there is a chance the market has gotten too short too quickly and the chances of a short squeeze has been increasing.
