Talking Points: - USDOLLAR to Hold Steady Ahead of Non-Farm Payrolls (NFP) - Australian Dollar Correction Remains Limited- Range in Focus Index Last High Low Daily Change (%) Daily Range (% of ATR) DJ-FXCM Dollar Index 10706.41 10721.65 10697.98 -0.05 64.29% USDOLLAR Daily Carving String of Higher Lows- Ascending Triangle Taking Shape? Relative Strength Index Clears Bearish Trend- Watch for Confirmation Interim Resistance: 10,753 (23.6 expansion) to 10,759 (61.8 retracement) Interim Support: 10,657 (61.8 extension)- Closing Basis Release GMT Expected Actual Challenger Job Cuts YoY (DEC) 12:30 -- -5.9% Initial Jobless Claims ( JAN 4 ) 13:30 335K 330K Continuing Claims ( DEC 28 ) 13:30 2850K 2865K Fed's Esther George Speaks on U.S. Economy 18:30 Fed's Narayana Kocherlakota Speaks on U.S. Economy 0:00 The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar ) pared the advance to 10,721 even after the European Central Bank (ECB) strengthened its forward-guidance for monetary policy, and the dollar may continue to hold a tight range ahead of Non-Farm Payrolls (NFP) as the U.S. economy is expected to add another 197K jobs in December. In light of the ongoing improvement in the labor market, another better-than-expected NFP print should give the Fed greater scope to further normalize monetary policy over the coming months, and the data may prompt a topside break in the USDOLLAR as it continues to carve a series of higher lows. Indeed, the shift in the policy outlook should help to limit the downside for the greenback, but a slowdown in wage growth may become a growing concern for the central bank amid the risk for disinflation. AUDUSD Daily Limited Correction to Offer Range Trade- RSI Breaks Out of Bearish Trend Interim Resistance: 0.8980 (38.2 expansion) to 0.9000 (1.618 expansion) Interim Support: 0.8865 (61.8 expansion) to 0.8890 Pivot- Close Basis In contrast to Wednesday , three of the four components advanced against the greenback, led by a 0.18 percent rally in the Japanese Yen , while the Australian dollar bucked the trend, with the AUDUSD slipping 0.16 percent. Indeed, the commodity bloc is trading on a weaker tone as market sentiment falters, but the AUDUSD may continue to face range-bound prices over the near-term as the Reserve Bank of Australia (RBA) sticks to its wait-and-see approach. In turn, we will look to play the support & resistance zones over the near-term, but the bearish sentiment surrounding the higher-yielding currency may gather pace over the coming months as growth and inflation in the $1T economy remains subdued.
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