As expected, we saw some bigger movements on Thursday with market participants positioning for a stronger payrolls report after ADP employment change surprised on the upside. Short traders in both EUR/USD and GBP/USD were able to profit yesterday and everyone is eager to see whether today’s US jobs report will shift the Federal Reserve taper talk. If the report beats expectations, the US dollar will soar as there is more pressure on the Fed to make a hawkish move, sooner rather than later.
However, expectations are very high today and traders should be cautious amid potential exaggerated market reactions around the release time of the jobs report at 12:30 UTC. Extreme volatility can quickly erase previous gains and lead to steep losses. Payrolls estimates range from 335,00 to 1 million job gain in May, so anything is possible which is why it is extremely dangerous to take a position ahead of the release. What should also be monitored closely is the wage inflation number. The greenback will benefit from a higher reading with taper speculation gaining traction.
While everything will depend on the NFP outcome, let’s take a brief look at the technical picture for better orientation.
EUR/USD
The overall trend is still upwards with crucial support zones seen at 1.20, 1.19 and 1.16. In short-term time frames, if the euro falls below 1.2070, we expect further losses towards 1.19. On the upside, bulls will need a significant break above 1.23 and further 1.2350 in order to shift the focus towards 1.25. 
GBP/USD
As long as the cable trades above 1.4050, the recent upward trend channel remains intact. A crucial support-zone comes in between 1.40 and 1.3950 and once that zone is breached to the downside, we anticipate steeper corrections towards 1.38 and 1.37. On the upside, bulls will need to overcome 1.4250 in order to push the pound towards 1.4350. 
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.