Without a doubt, the focus today will be on the employment situation in the United States. With Nonfarm Payrolls coming out later in the day, we could expect a relatively calm trading session between now and then. However, the ECB did throw out a surprise rate cut, so we do like the idea of buying the DAX on pullbacks. Perhaps short-term binaries to the upside might be the way to go, and certainly the EUR/USD pair continues to offer selling opportunities every time it bounces.
There is the German Industrial Production numbers coming out early, which is anticipated to be at 0.3%, but we think that this will be a minor localized event. This could have a direct effect on the DAX itself, but really not too much in the way of the overall picture. With that, we believe that the DAX will continue to be positive overall as the €9600 level should offer a floor, and the €9800 level a target.
The EUR/USD pair did break below the 1.30 level during the session on Thursday, which means that we should then head to the 1.28 handle. We will sell rallies as they occur, recognizing that any strength in the Euro should be temporary at best. We would be especially interested in shorting this market if we do bounce all the way to the 1.30 handle and show signs of resistance.
The Canadian employment numbers come out as well, so this could make it an interesting day for the USD/CAD pair. We broke down towards the 1.08 handle during the day on Thursday, testing and uptrend line. That being said, there should be plenty of support for the US dollar underneath there, so we get a relatively strong jobs number out of the United States, something above the 225,000 added level, we could see the USD/CAD make another move towards the 1.10 level, an area that has been massively resistive lately.
Pay attention to the oil markets as well, they tend to be sensitive to employment numbers also. That being said, inventory numbers were reduced less than anticipated on Thursday, which of course does nothing to help support oil prices.