Key Jobs Data & Bearish EURUSD Signals: Market Volatility Ahead!

This Friday, markets will focus on two high-impact economic events—Canada’s Employment Change and the US Nonfarm Employment Change, both scheduled for 17:30 (GMT+2). These key data releases are likely to drive significant volatility in CAD and USD pairs. Traders will closely monitor employment figures for insights into labor market strength and potential monetary policy adjustments by the Bank of Canada and the Federal Reserve. Additionally, EURUSD remains under bearish pressure, with key technical levels and upcoming fundamentals offering potential trading opportunities.

Friday 17:30 (GMT+2) – Canada: Employment Change (CAD)
Friday 17:30 (GMT+2) – USA: Nonfarm Employment Change (USD)

Since reaching a peak of 1.12130 on September 25, EURUSD has been on a steady decline, driven by a series of bearish technical signals. The downtrend began with the formation of a Shooting Star candlestick pattern, a classic Japanese candlestick reversal signal indicating weakening buyer momentum. This was soon followed by a non-failure swing reversal, where the peak at 1.12130 exceeded the prior high but was quickly followed by a break below the key support level at 1.0007, amplifying downside momentum.
The bearish sentiment was further reinforced by the emergence of a “Death Cross,” as the 20-period Exponential Moving Average (EMA) crossed beneath the 50-period EMA, adding weight to the negative bias.
Momentum indicators continue to reflect a bearish environment. The Momentum Oscillator remains below the critical 100 level, signaling persistent downward pressure, while the Relative Strength Index (RSI) stays below 50, highlighting ongoing selling interest. While these signals suggest continued weakness in the near term, the presence of negative divergence between the price and the Momentum Oscillator calls for caution, as it may indicate a potential pause or reversal in the current downtrend.

Should the buyers take market control, traders may direct their attention toward the four potential resistance levels below:
1.04359: The initial resistance level is established at 1.04359, which mirrors the peak from January 1.
1.05634: The second price target is set at 1.05634, representing the weekly resistance, R2, calculated using the standard Pivot Points methodology.
1.06814: The third price objective is observed at 1.06814, which corresponds with a daily low marked on November 6.
1.08357: An additional upside target is projected at 1.08357, mirroring the 61.8% Fibonacci Retracement drawn from the high point, 1.12130, to the low point, 1.02228.

Should the sellers maintain market control, traders may consider the four potential support levels listed below:
1.02228: The initial support level is estimated at 1.02228, corresponding to the daily low formed on January 2.
1.00911: The second support level is identified at 1.00911, representing the 161.8% Fibonacci Extension drawn from the low point, 1.02228, to the high point, 1.04359.
0.99652: The third support level is seen at 0.99652, reflecting the weekly support, S3, estimated using the standard Pivot Points methodology.
0.98780: An additional downside target is 0.98780, mirroring the 261.8% Fibonacci Extension drawn from the low point, 1.02228, to the high point, 1.04359.

US weekly jobless claims fell by 10,000 to 201,000, the lowest level since February 2024, signaling ongoing labor market stability despite slowing hiring. Continuing claims increased by 33,000 to 1.867 million, indicating that some laid-off workers are facing longer periods of unemployment.
With inflation still elevated, the steady labor market may prompt the Federal Reserve to keep interest rates unchanged in January as policymakers monitor labor conditions closely. Meanwhile, private payrolls rose by 122,000 in December, below expectations, suggesting a slowdown in job creation.

Friday’s key employment data from Canada and the US will be crucial in shaping short-term market sentiment and potential monetary policy expectations. These releases are likely to cause notable volatility in CAD and USD pairs, offering traders actionable opportunities. Meanwhile, EURUSD remains under bearish pressure, with technical indicators signaling continued downside risk, though caution is advised due to potential divergence. As markets digest both employment data and broader economic fundamentals, monitoring key resistance and support levels will be essential for effective trading strategies.