The US dollar index gained momentum after the FOMC meeting minutes. Minutes from FOMC's December meeting show that rates as likely at or near its peak and a further policy action depends on economic development. The meeting minutes did not give any clue about the timing of the rate cut. It hit a high of 102.71 and is currently trading around 102.472.
According to the CME Fed watch tool, the probability of a no-rate cut in Jan increased to 91.20% from 81.40% a week ago.
The US 10-year yield pared some of its gains after FOMC meeting minutes. The US 10 and 2-year spread narrowed to -40% from -53.6%.
Major resistance- 103/104
Major support- 102/101.60.
EURUSD-
EURUSD continues to trade weak for a second consecutive day on board-based US dollar buying. The US ISM manufacturing PMI showed a minor uptick at 47.4 in Dec, below the forecast of 47. Economic data to watch German CPI.
Major resistance-1.100,1.1075
Major support- 1.0880,1.0800
Yen-
The Yen lost its shine despite easing the US treasury yield. A strong earthquake and weak Japanese economic data put pressure on the yen at lower levels. Any close above 143.60 confirms further bullishness.
Major Resistance- 144,145
Major support- 143.20,142.50
Canadian Dollar
The pair showed a minor sell-off on improved oil prices.
Major Resistance- 1.3380,1.3435
Major support- 1.3300, 1.3220
Economic calendar -
Jan 4th, 2024, US ADP Employment (1:15 pm GMT)
US initial jobless claims FOMC meeting minutes (7:00 pm GMT)
