The upcoming nonfarm payrolls (NFP) report is highly anticipated, reflecting on the labor market’s robust yet slowing growth, raising Federal Reserve concerns about potential overheating. February’s data revealed a slight uptick in unemployment to 3.9% and a dip in wage growth to 4.3% year-over-year, despite a significant addition of 275,000 jobs. March is expected to show a continuation of this trend with an estimated 198,000 new jobs, maintaining the unemployment rate at 3.9% and a possible decrease in average hourly earnings growth to 4.1% year-over-year.

In the currency market, the USD/JPY pair has struggled to push beyond recent highs, remaining in a narrow range despite hitting a 34-year peak of 151.95 last week. A breakout above this range could target higher levels, including psychological thresholds at 153.00 and 154.00, and potentially the 159.15 Fibonacci extension. Conversely, a drop below 150.87 might find support near the 150.05 and 149.60 short-term SMAs.

EUR/USD Dynamics Influenced by Upcoming European Flash CPI Data

The European Central Bank (ECB) has been more successful in controlling inflation compared to the Federal Reserve, with the CPI expected to drop to 2.5% in March from 2.6% in February. A consensus among ECB policymakers favors an interest rate cut at the June meeting, pending the March CPI outcome. A lower-than-expected CPI could bolster the case for a rate cut, pressuring the euro, while stronger figures might decrease the likelihood of a June rate reduction.

The EUR/USD pair could face further declines if it stays below the 200-day SMA and the medium-term uptrend line, with initial support at 1.0695. A break below this level could lead to a test of the 1.0655 level and potentially the 1.0515 threshold.

USD/CAD Seeks Rebound Amid Canadian Employment Data

Canada’s employment report and the Ivey PMI are the highlights, with the Bank of Canada poised to start its easing cycle in June following a sharper-than-expected drop in February’s inflation. The unemployment rate, currently at 5.8%, is anticipated to increase slightly to 5.9%.

The USD/CAD pair has shown resilience with a recent bounce off the 20-day SMA, remaining within an ascending channel since early January. A move above the 1.3630 resistance could enhance the bullish outlook, while a fall below the 200-day SMA might lead to a retreat to the channel’s lower edge around 1.3455.