The US dollar index showed a minor pullback after a massive sell-off. The index was one of the worst performers the previous month on rate cut hopes. Markets eye US Nonfarm payroll data for further direction.
According to the CME Fed watch tool, the probability of a 25 bpbs rate cut in Jan increased to 15% from 14.5% a week ago.
The US 10-year yield trade lost more than 20% from an all-time high of 5.02%. The US 10 and 2-year spread narrowed to -38% from -53.6%.
Major resistance- 102/103
Major support- 100.70/100.
EURUSD-
EURUSD pared some of its gains due to profit booking. Markets are expecting a fresh momentum after the holiday mood. The policy divergence between the US Fed and ECB and any indicative close below 1.1500 confirms further bullishness. Markets await Eurozone PMI and German CPI for further momentum.
Major resistance-1.1070,1.1500
Major support- 1.100,1.1.0935
Yen-
The yen gaining momentum as BOJ will end the negative interest rate regime.
Major Resistance- 142,143
Major support- 140.70,140
Canadian Dollar
The pair showed a minor pullback on easing crude oil prices.
Major Resistance- 1.3270,1.3300
Major support- 1.3170, 1.3100
Economic calendar -
Jan 3rd, 2024, US IS Manufacturing PMI (3:00 pm GMT)
FOMC meeting minutes (7:00 pm GMT)
Jan 4th, 2024, German Prelim CPI m/m
US ADP employment data (1:30 pm GMT)
Jan 5th, 2024, US Nonfarm payroll (1:30 pm GMT)
US ISM services PMI (3 pm GMT)
