The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
Will the USD grow with the US labor market?
The US unemployment claims are out on Thursday at 15:30 MT time.
Instruments to trade: EUR/USD, GBP/USD, AUD/USD, USD/CAD
The labor market is what makes the American economy robust and gives it endurance and prosperity. Keeping the hand on the pulse of the employment dynamics in the US gives you the right direction in drawing correct fundamental perception of the American economy and make projections on the long-term horizons for the USD. The initial jobless claims announced weekly in the US affect the Forex market quite intensely, so watch this indicator: if there is any sign that the mild recovery curve is distorted, it will press on the greenback; otherwise, healthy figures above the forecast will make it rise.
- If the figures exceed expectations, that may push the USD.
- If the labor market underperforms, the USD may go down.
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
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This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.