USD/JPY, EUR/USD, USD/CAD

NFP report --> USD/JPY

The labor market has predominantly exhibited a positive trend, albeit with a steady decline that has caused the Federal Reserve to be concerned about potential overheating. However, a deceleration became more evident in February as the jobless rate increased to 3.9% and pay growth fell to 4.3% y/y. The expansion in employment has been strong, as seen by a 275,000 increase in nonfarm payrolls. In March, it is projected that the economy experienced an increase of 198,000 new jobs, resulting in an unemployment rate of 3.9%. Additionally, the growth rate of average hourly earnings is likely to have decreased to 4.1% y/y

In FX markets, USD/JPY has been stubbornly pushing for more advances without success lately. Despite the new 34-year high of 151.95 that was posted in the preceding week, the pair is still developing within a tight range of 150.87-151.95. More increases could drive the market towards the next psychological marks such as 153.00 and 154.00 until the 161.8% Fibonacci extension level of the down leg from 151.90 to 140.20 at 159.15. On the flip side, a decline below 150.87 could find some support near the short-term simple moving averages (SMAs) at 150.05 and 149.60 respectively.

European Flash CPI data --> EUR/USD

While the Federal Reserve expresses concern about inflation remaining beyond the 2% objective, the European Central Bank has made better progress. The Consumer Price Index (CPI) decreased to 2.6% in February and is projected to decrease even lower to 2.5% in March. A multitude of ECB policymakers have recently expressed unanimous support for a reduction in interest rates at the upcoming June meeting. An unexpected negative outcome would support such a decision, putting pressure on the euro. However, if the readings turn out to be stronger than expected, it might reduce the likelihood of a cut in June.

The tumble beneath the 200-day SMA and the medium-term uptrend line could make EUR/USD sensitive to a steeper downside retracement with first support coming from the 1.0695 barricade. In this case, the pair could revisit the 1.0655 level, a break of which could clear the way towards the 1.0515 floor, registered on November 1.  

Canadian employment report --> USD/CAD 

Highlights in Canada will include the release of employment statistics for March and the Ivey PMI on Friday. Another major central bank that will begin its easing cycle in June is the Bank of Canada. Inflation decreased more than predicted in February, falling below 3.0%, making a cut more likely. The unemployment rate has risen to 5.8% in recent months and is expected to tick up to 5.9%.

In charts, USD/CAD is facing discouraging technical signals, but the latest bounce off the 20-day SMA is still looking promising. The pair has been still trading within an ascending channel since January 9 and any movements above the 1.3630 resistance level would brighten the outlook. However, a drop below the 200-day SMA could take the market until the lower boundary of the range near 1.3455.