UK labour market report on the agenda today

<p>Even with the dollar drop and retreat in Treasury yields yesterday, traders are still convinced of a 25 bps rate hike by the Fed later this month. Fed funds futures are little changed, showing roughly 92% odds of a 25 bps move. And that comes despite markets getting a bit jumpy after <a href="https://www.forexlive.com/news/mannheim-june-used-car-price-index-fall-by-42-20230710/" target="_blank" rel="follow">this report</a> yesterday, which may indicate a softer set of CPI prints tomorrow.</p><p>The dollar remains slightly on the backfoot today as well, with USD/JPY in particular retreating further in a drop below 141.00 to 140.75 currently. I offered more thoughts on the technicals for the pair in this post <a href="https://www.forexlive.com/news/usdjpy-retraces-lower-as-14500-rejection-holds-20230711/" target="_blank" rel="follow">here</a>.</p><p>Well, with the dollar starting to meet some key levels on the charts, it sets up for a potential break lower in the greenback ahead of the main event tomorrow. We will need vindication from that to keep the latest run going, with EUR/USD setting its sights back on the April and May highs potentially and GBP/USD quietly eyeing the 1.3000 handle.</p><p>Stocks remain a bit of a wildcard after last week's decline, so yesterday's advance is still not convincing enough of a major upturn just yet. Again, it would need confirmation from tomorrow's main event.</p><p>Looking ahead to Europe today, sterling will be in focus again as we do get the latest UK labour market report. Keep an eye out on wages data, if anything else. However, markets are already heavily bullish on BOE pricing so this shouldn't change it all too much.</p><p>0600 GMT – Germany June final CPI figures0600 GMT – UK June payrolls change0600 GMT – UK May ILO unemployment rate, employment change0600 GMT – UK May average weekly earnings0900 GMT – Germany July ZEW survey current conditions, outlook1000 GMT – US June NFIB small business optimism index</p><p>That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.</p>

This article was written by Justin Low at www.forexlive.com.