• Dollar: What Should We Expect from NFPs, G20 and Europe for Volatility?
• Euro Finds Enough Relief in Greek Referendum Reversal to Offset Surprise ECB Cut
• Canadian Dollar May be the Biggest Mover with Its Own Job Data on Tap
• Australian DollarShows Limited Reaction to RBA Growth, Inflation Downgrade
• Swiss Franc Drifting Back to 1.20 Against Euro as SNB Member Warns More May be Ahead
• Japanese Yen may See a Natural Jump in Volatility Following Extremely Quiet Day
• Gold Advances Despite Supposed Stability for Greece Situation

Dollar: What Should We Expect from NFPs, G20 and Europe for Volatility?

Despite the threatening European headlines that met anxious traders heading into the beginning of Thursday’s session; the wholesale move away from high return / high risk assets never truly materialized. For the dollar, that meant that the necessary threshold for liquidity demand was never breeched. Consequently, the Dow Jones FXCM Dollar Index (ticker =USDollar) would slip for a second consecutive session, reversing initial gains against all of its most liquid counterparts. Testing the will for a strong showing from the greenback through the final 24 hours of this trading week, it is worth noting that equities posted a remarkable rally through London / New York session. That naturally contributes an implicit level of bullishness behind risk trends that in turn works against the dollar.

There are few things outside of the fear-and-greed balance that can meaningful alter the dollar’s course. That said, the impressive showing from stocks, speculative commodities and yields worked against the greenback. That said, there was still a fundamental highly for the day in the ISM service sector (Non-Manufacturing Composite) survey for October. Accounting for the bulk of US output, service sector activity is an important, lending indicator for growth. That said, the 52.9 reading was a modest disappointment compared to forecasts and the previous reading (53.5, 53.0); but it wouldn’t proffer any immediate threats of a return to recession (a growing concern lately).

In the upcoming US session, we can notch our expectations for volatility a little higher; but views for new trend generation should be kept in check. Themonthly non-farm payrolls (NFP) report has a reputation as a historical market mover and even trend instigator; but it has certainly lost much of this renown over the past few years. To understand the employment report’s influence over the bearings of the dollar, equities, bonds and other assets; we need to consider its economic fundamental position. Most long-term capital investments are made on growth and yield expectations. That said, labor market health represents one node of the Fed’s dual mandate on monetary policy and it is a leading catalyst for total economic output. Yet, we know this particular trend to be exceptionally depressed and posting an extremely slow recovery.

This is not to mean thatNFPs will be completely impotent; but its ability to generate a strong surge in volatility is greatly reduced. The same is likely true of the ongoing European financial troubles and expectations for the G20 statement. With Greece’s troubles eased in the near-term, the next drive will be an unexpected headline. And, the G20 is not known for agreeing to coordinated action without the threat of immediate crisis.

Related:Discuss the Dollar in the DailyFX Forum,John’sVideo:Euro Holds, Stocks Rally on Cancelled Greek Vote and ECB Cut, Now NFPs

Euro Finds Enough Relief in Greek Referendum Reversal to Offset Surprise ECB Cut

There was a dramatic swing in the Euro’s fundamental fortunes this past trading session. The primary concern heading into Thursday was the Greek Prime Minister Papandreou’s vow to bring the October 27th austerity/bailout pact to referendum in early December. This concern never incited the level of fear commensurate with what it implied. Ultimately, this reservation proved well founded as the threat of a vote over the bailout program (or EU membership) seems to have been intended to frighten a greater consensus in parliament to support austerity. This is a move that could lead to a forced resignation for Papandreou; but it does relieve the immediate (though not long-term) threat to EU stability. In fact, it offered enough relief that it completely reversed the 175 pip EURUSD drop followingthe surprise ECB rate cut by new President Draghi.

Canadian Dollar May be the Biggest Mover with Its Own Job Data on Tap

Though the US employment report is the more globally respected catalysts, it is likely the Canadian labor data that carries the greater market-moving potential. Where the general trend of US jobs is well engrained; there is greater ambiguity as to how long Canada can avoid the global slowdown in economic activity. The positive reaction to the significant surprise to September’s report was remarkable; and that same potential remains with this particular release. However, as is also clear from last month, follow through beyond the initial reaction will likely be limited.

Australian DollarShows Limited Reaction to RBA Growth, Inflation Downgrade

The Australian dollar was saddled by the RBA’s recent rate cut; and yet the currency really hasn’t suffered much for it. Perhaps a forecast where the currency’s still-sizable yield advantage quickly declines could exact greater influence on the carry currency. Well, the central bank’sQuarterly Monetary Policy Statement lowered its GDP forecast (2011-2013) to 4 percent and CPI outlook (2.5 percent) and the currency didn’t budge.

Swiss Franc Drifting Back to 1.20 Against Euro as SNB Member Warns More May be Ahead

EURCHF is conspicuously trending back toward the 1.2000 floor that the Swiss National Bank vowed to protect two months ago. Though we are still 125 points above this critical level, policy officials recognize the tides are rising against them. As a warning SNB member Danthine said that further measures if economic or deflation concerns justify it. Add that to threats of just a retracement in the exchange rate.

Japanese Yen may See a Natural Jump in Volatility Following Extremely Quiet Day

After running a few quick statistics on USDJPY price action, we find that the pair carved out its third smallest daily range in eight months Thursday. Further, in the instances where the pair moved less than 28 pips, the trading day that followed generated an average range of 72 pips. This is a natural correction as markets trend away from extremes quickly. We should be on the lookout for another short-term breakout.

Gold Advances Despite Supposed Stability for Greece Situation

The uncertainty that the Greek referendum generated for the Euro was one of those fundamental concerns that diverts capital away from the volatility and manipulation of financial assets and to the alternative asset appeal of gold. However, the metal performed better after it was reported that the vote was dead in the water. Futures volume doesn’t offer much confirmation here; so we should remain cautious of trend.

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**For a full list of upcoming event risk and past releases, gotowww.dailyfx.com/calendar

ECONOMIC DATA

Next 24 Hours

GMT	Currency	Release	Survey	Previous	Comments
7:55	EUR	German PMI Services (OCT F)	52.1	52.1	Stability supports ECB price stability
8:00	CHF	Foreign Currency Reserves (OCT)		282.4B	Expected to rise again as peg continues
8:45	EUR	Italian PMI Services (OCT)	45.5	45.8	Largely stable PMIs for the entire Eurozone and other nations will relieves pressure on additional ECB rate hikes
8:50	EUR	French PMI Services (OCT F)	46	46
9:00	EUR	Euro-Zone PMI Composite (OCT F)	47.2	47.2
9:00	EUR	Euro-Zone PMI Services (OCT F)	47.2	47.2
10:00	EUR	Euro-Zone Producer Price Index (MoM) (SEP)	0.2%	-0.1%	Expected decline in long term PPI could lead to more dovish ECB views in the new administration
10:00	EUR	Euro-Zone Producer Price Index (YoY) (SEP)	5.8%	5.9%
10:00	EUR	German Factory Orders n.s.a. (YoY) (SEP)	7.5%	3.9%	Orders expected to rise following better export data
10:00	EUR	German Factory Orders s.a. (MoM) (SEP)	0.1%	-1.4%
11:00	CAD	Unemployment Rate (OCT)	7.1%	7.1%	Canadian labor market may grow at a slower pace as domestic, US trade weakens
11:00	CAD	Net Change in Employment (OCT)	15.0K	60.9K
11:00	CAD	Full Time Employment Change (OCT)		63.8
11:00	CAD	Part Time Employment Change (OCT)		-2.9
11:00	CAD	Participation Rate (OCT)	66.8	66.8
12:30	CAD	Building Permits (MoM) (SEP)	2.0%	-10.4%	Construction may be bid higher
12:30	USD	Change in Non-farm Payrolls (OCT)	95K	103K	Major data of the day: US employment data expected to weaken moderately, led by a slower private sector
12:30	USD	Change in Private Payrolls (OCT)	125K	137K
12:30	USD	Change in Manufacturing Payrolls (OCT)	4K	-13K
12:30	USD	Unemployment Rate (OCT)	9.1%	9.1%
12:30	USD	Underemployment Rate (U6) (OCT)		16.5%
12:30	USD	Average Hourly Earnings (MoM) (OCT)	0.2%	0.2%	Breakdown in labor sector looking at wages showing no significant change
12:30	USD	Average Hourly Earnings (YoY) (OCT)	1.9%	1.9%
12:30	USD	Average Weekly Hours All Employees (OCT)	34.3	34.3
12:30	USD	Change in Household Survey Employment (OCT)		398
14:00	CAD	Ivey Purchasing Managers Index s.a. (OCT)	55.4	55.7	Lower PMI points to continued easing
	GBP	New Car Registrations (YoY) (OCT)		-0.8%	Large purchases may continue falling

SUPPORT AND RESISTANCE LEVELS

CLASSIC SUPPORT AND RESISTANCE - 18:00 GMT

Currency	EUR/USD	GBP/USD	USD/JPY	USD/CHF	USD/CAD	AUD/USD	NZD/USD	EUR/JPY	GBP/JPY
Resist 2	1.4250	1.6445	81.50	0.9300	1.0675	1.1080	0.9020	112.00	131.00
Resist 1	1.4000	1.6100	79.50	0.9150	1.0675	1.0770	0.8750	109.35	128.30
Spot	1.3841	1.6045	78.03	0.8766	1.0076	1.0421	0.7951	108.01	125.21
Support 1	1.3600	1.5900	77.50	0.8500	0.9950	1.0150	0.7500	105.00	122.35
Support 2	1.3350	1.5700	75.50	0.7800	0.9750	1.0000	0.6850	102.00	116.00

CLASSIC SUPPORT AND RESISTANCE

EMERGING MARKETS & SCANDIES CURRENCIES 18:00 GMT

Currency	USD/MXN	USD/TRY	USD/ZAR	USD/HKD	USD/SGD		Currency	USD/SEK	USD/DKK	USD/NOK
Resist 2	16.5000	2.0000	8.5800	7.8165	1.3650		Resist 2	7.5800	5.6625	6.1150
Resist 1	14.3200	1.9000	8.1025	7.8075	1.3250		Resist 1	6.5175	5.3100	5.7075
Spot	13.3895	1.7514	7.8663	7.7677	1.2650		Spot	6.5646	5.3767	5.5830
Support 1	12.6000	1.6500	6.5575	7.7490	1.2000		Support 1	6.0800	5.1050	5.3040
Support 2	11.5200	1.5725	6.4295	7.7450	1.1800		Support 2	5.8085	4.9115	4.9410

INTRA-DAY PIVOT POINTS 18:00 GMT

Currency	EUR/USD	GBP/USD	USD/JPY	USD/CHF	USD/CAD	AUD/USD	NZD/USD	EUR/JPY	GBP/JPY
Resist 2	1.3982	1.6180	78.30	0.8939	1.0278	1.0601	0.8072	109.04	126.21
Resist 1	1.3912	1.6112	78.16	0.8853	1.0177	1.0511	0.8011	108.53	125.71
Pivot	1.3784	1.5995	78.03	0.8807	1.0116	1.0357	0.7909	107.55	124.81
Support 1	1.3714	1.5927	77.89	0.8721	1.0015	1.0267	0.7848	107.04	124.31
Support 2	1.3586	1.5810	77.76	0.8675	0.9954	1.0113	0.7746	106.06	123.42

INTRA-DAY PROBABILITY BANDS 18:00 GMT

\Currency	EUR/USD	GBP/USD	USD/JPY	USD/CHF	USD/CAD	AUD/USD	NZD/USD	EUR/JPY	GBP/JPY
Resist. 3	1.4061	1.6218	78.86	0.8913	1.0210	1.0615	0.8102	109.95	127.11
Resist. 2	1.4006	1.6175	78.65	0.8876	1.0176	1.0567	0.8065	109.47	126.63
Resist. 1	1.3951	1.6131	78.44	0.8840	1.0143	1.0518	0.8027	108.98	126.16
Spot	1.3841	1.6045	78.03	0.8766	1.0076	1.0421	0.7951	108.01	125.21
Support 1	1.3731	1.5959	77.62	0.8692	1.0009	1.0324	0.7875	107.04	124.25
Support 2	1.3676	1.5915	77.41	0.8656	0.9976	1.0275	0.7837	106.55	123.78
Support 3	1.3621	1.5872	77.20	0.8619	0.9942	1.0227	0.7800	106.07	123.30

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---Written by: John Kicklighter, Senior Currency Strategist for DailyFX.com

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