The US dollar index surged on a third straight day to 93.7 area, its highest level in two weeks ahead of tonight’s US non-farm payroll data.

Markets expect some 200k new jobs to be added this month, slightly lower than the previous month’s actual reading of 261k, according to Thomson Reuters. This Wednesday’s ADP job data showed that the number of private employment increased by 190k in Nov, suggesting that job market remained stable and strong.

The likelihood of Dec Fed rate hike, according to CME’s FedWatch too, is now standing at 100%. This includes 90.2% probability of a 25bps hike, and 9.8% probability of a 50 bps hike.

US dollar is gaining upward momentum against euro and yen against the backdrop of strong job data expectation and fully priced-in Dec hike. Technically, USD/JPY is moving upwards and its immediate resistance levels could be found at 113.35 (61.8% Fibonacci Extension) and then 113.73 (78.6% Fibonacci extension) respectively. EUR/USD is trending lower with its 10 Day SMA and SuperTrend (10,2) both sloped downwards. Its immediate support level could be found at around 1.171 area.

Source: Thomson Reuters

Global equities stopped bleeding and had a relief-rebound yesterday. President Trump’s recognition of Jerusalem as Israeli capital failed to spark a sustained panic selling in capital markets, as investors remained optimistic and focus on upcoming macro-economic data.

Japan’s trade balance and 3rd quarter GDP readings smashed market expectation from the upside, which is likely to kick on a favourable trading start in Asian markets. Later on investors will be watching China’s Trade balance to gauge the import and export status of world’s second largest economy.

Hang Seng Index has found some support at 28,285 points, which is its 127.2% Fibonacci extension level. Favourable sentiment from US and Japan is likely to underpin weakness in trading sentiment and cushion some panic selling.

Technical Analysis:

US Dollar Index – Dec 2017

  • Immediate resistance level at 61.8% Fibonacci retracement at 94.0 area
  • Trend indicator 10-Day Simple Moving Average and SuperTrend (10,1.5) have both turned bullish, suggesting more upside

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