FxWirePro: Forex Daily Update

The US dollar index trades flat after a minor pullback.  It hit a multi-month month low the previous week as the Fed prepares for rate cuts next year. San Francisco President Mary Daly said in a Wall Street Journal interview that it is appropriate for the Fed to consider rate cuts in 2024.

US retail sales and jobless claims beat market expectations. While US inflation came in line with expectations.  According to the CME Fed watch tool, the probability of a rate pause in Jan decreased to 91.7% from 97.8% a week ago.

 The US 10-year yield gained slightly ahead of US housing data. The US 10 and 2-year spread narrowed to --51.3% from -39%.

Major resistance- 102.65/103.20

Major support- 101.70/101.

EURUSD-

EURUSD showed a minor pullback despite weak German IFO data. It declined to 86.40 in Dec compared to a forecast of 87.80. Investors eye the Eurozone Harmonized Index of Consumer Prices (HICP) for further cues.

Major resistance- 1.0965,1.1020

Major support- 1.08600,1.0800

Yen-

USDJPY jumped sharply after the dovish BOJ monetary policy. The central bank kept its rates and forward guidance unchanged.

Major Resistance- 144,145

Major support- 143,142.20

Pound sterling

The pound sterling halted its two-day losing streak on minor US dollar selling and easing US treasury yield. The market awaits FOMC member Barkin and Bostic's speech for further direction.

Major Resistance- 1.2700,1.2760

Major support- 1.2650,1.2600

Economic calendar -

Dec 19th, 2023, US housing starts (1:30 am GMT)

                                Building permits  

                               Canada CPI