Forex Today: US Payrolls take centre stage

The FX universe witnessed a resumption of the appetite for the risk-linked assets ahead of the imminent release of the US labour market report at the end of the week. In line with the Federal Reserve and the ECB, the BoE left its policy rate unchanged at its event on Thursday, although following a divided vote.

Here is what you need to know on Friday, February 2:

The USD Index (DXY) dropped markedly and put the 103.00 support to the test, slipping back to the area below the key 200-day SMA. On Friday, all the attention is expected to be on the publication of Nonfarm Payrolls for the month of January, the Unemployment Rate, Factory Orders and the final print of the Michigan Consumer Sentiment.

EUR/USD regained balance and bounced off multi-week lows near 1.0780, an area also reinforced by the provisional 100-day SMA, on the back of the dollar’s lacklustre performance. Looking at Friday’s docket, the only release of note will be the ECB’s Survey of Professional Forecasters (SPF).

GBP/USD printed a robust advance and regained the 1.2700 mark and well beyond after the BoE left its policy rate unchanged, while investors expect the central bank to start reducing rates around Q3 2024.

Renewed selling pressure in the greenback in combination with further weakness in US yields sponsored the second consecutive daily decline in USD/JPY, this time challenging the 146.00 support.

AUD/USD shrugged off part of the weekly bearishness and approached the 0.6580 zone after meeting initial contention near 0.6500 during early trade. In Oz, Home Loans and Investment Lending for Homes are due on Friday.  

Crude oil prices extended their decline and broke below the $74.00 mark per barrel, testing at the same time the transitory 55-day SMA.

Gold prices extended their uptrend to new highs past the $2060 yardstick, while Silver left behind two consecutive sessions of losses after rebounding from the $22.50 zone.