Dollar & yields tick higher ahead of US labor market data

The greenback was seen somewhat higher during the London session on Friday as traders are bracing for the US labor market update.
As usual, the first Friday of each month belongs to the US labor market. Market participants expect that 488,000 new jobs were created in September, more than double the 235,000 scored in August. As a result, the unemployment rate is forecast to improve slightly to 5.1%, while wage growth is seen rising further to 4.6% on the yearly basis. 

This week's ADP data showed a gain of 568,000 jobs in September, much more than analysts had expected, pointing to a possible upside surprise for NFP today.

More robust data could reinforce the hawkish movement in the Fed, most likely leading to the beginning of the tapering process in November. Alternatively, weaker data could prompt some repricing of the tapering process, and in that case, it could be postponed to December or January.

In the runup to today's news, the 10-year yield rose to 1.6%, the highest since June 4. As a result, the EURUSD pair trades at 1.1545, the lowest since July 2020. However, the bearish momentum is fading, and today's data (if taken positively) could start another leg lower in the EURUSD pair (and leg higher in the USD index). 

Stock markets managed to stage a solid recovery, rising above some essential supports. Therefore, the short-term outlook seems bullish for most indices, but today's data will indeed cause volatility, and consequently, technical levels are not that important. 

Elsewhere, precious metals have gone nowhere over the previous days, but volatility should also pick up today in these markets. 
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