Volatility Continues Ahead of NFP Data

Later in the day, the US labor market data for January are due. The non-farm payrolls number is seen dropping to 150,000 from 199,000 in December. As a result, the unemployment rate is expected to stay unchanged at 3.9%.

However, according to the official forecast, wage growth will likely continue rising, printing 5.2% year-over-year.

At the same time, Canadian jobs data will be released, but the net change in employment is expected to crash to -117,000, down from 54,700 previously. If that is the case, we could see a decline in the Canadian dollar, pushing the USDCAD pair higher.

Yesterday's surprisingly hawkish ECB decision sent the EURUSD pair sharply higher, along with bond yields in Europe. The market now anticipates two rate hikes this year in the eurozone.

Additionally, the Bank of England also hiked rates, and it will likely deliver another rate increase at its next month's meeting. However, the GBPUSD pair has failed to react bullishly and stayed below the strong resistance of 1.36.

US equities dived yesterday, with all benchmarks falling sharply. However, Amazon's excellent results sent the company stocks some 15% higher in the aftermarket trading, erasing most of the losses in the Nasdaq index. 

Nevertheless, the bearish pressure returned today, and indices traded lower again, heading into the US session.