USD is in bullish mode since yesterday’s ECB and BOE rate decisions when both banks decided to leave the policy unchanged but made very dovish statements. USD is up against the EUR, GBP and CHF, but slightly down against the JPY and commodity currencies. So, the picture is quite mixed across the market, especially if we also consider lower metals and a higher stock market.
We will soon get the NFP numbers from the US which will definitely shake the markets pretty hard. The reason is a speculation regarding the QE; if employment situation in the US will improve then this will suggest that FED may lower QE earlier than expected (expected reaction=lower bonds, lower stocks, higher USD, lower Gold).
On the other-hand bad figures will suggest that QE will not end anytime soon which will be supportive for risk-on trade and bad for the USD. We will have to keep a very close eye on the 10 or 30 year US bonds because this will be the main driver for the markets later today.
On 30year US bonds we can see a three wave rise from the low which can be wave (4) is weakness may resume in wave (5).