Gold in Record Zone as Dow Breaks Out; EUR/USD, USD/JPY Eye NFP

Most read: USD flow, EUR/USD, USD/JPY, GBP/USD settings linked to US employment report

Volatility has spiked in many assets over the last week, with notable breakouts and busts along the way. First, U.S. Treasury yields plummeted across the board, with the two-year Treasury yield falling below its 200-day simple moving average to 4.54%, its lowest level since early June.

Lower U.S. Treasury yields and a bullish mood on Wall Street pushed stocks higher, pushing the Dow Jones Industrial Average past its July high and nearing an all-time high. The Nasdaq 100 also rose, but could not eliminate overhead resistance near 16,100.

Market trends also benefited precious metals, sparking strong gains among many precious metals. For example, the spot price of gold rose 3.5% and is on the verge of hitting a new all-time high near $2,075. Meanwhile, silver rose 4.7% to close at its highest level since May.

In the currency area, USD/JPY plunged 1.77% this week, falling below the 100-day simple moving average. This is a bearish technical signal that could lead to further losses for USD/JPY. Meanwhile, the EUR/USD pair was almost flat as lower-than-expected inflation in the euro area made the single currency less attractive.

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If US interest rate expectations continue to decline, US yields are likely to come under further downward pressure, potentially setting the stage for a weaker dollar. Against this backdrop, risk assets and precious metals may continue to be supported well into 2024.

Upcoming US data, including ISM services PMI and nonfarm payrolls (NFP), will provide an opportunity to better assess the Fed’s monetary policy outlook. Weak economic data could strengthen dovish expectations, while strong economic data could unwind bets on interest rate cuts. The latter scenario could trigger a reversal of recent trends across major assets.

To learn more about the catalysts guiding financial markets and potentially increasing volatility in the upcoming trading sessions, check out DailyFX’s carefully curated weekly forecasts.

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Fundamental and technical forecasts

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USD trend depends on US employment data, EUR/USD, USD/JPY, GBP/USD settings

This article focuses on the technical outlook for major US dollar pairs such as EUR/USD, USD/JPY, and GBP/USD. The article also considers key price levels that could impact the November US jobs report.

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