Adjusting Market Ahead of US Employment Report: Will the Dollar’s Buying Trend Continue?
The US market is entering an adjustment phase as it anticipates the release of the employment report on Friday. Attention is focused on key preliminary economic indicators, particularly the December ADP Employment Report and Initial Jobless Claims, which could shape the market’s short-term direction. Additionally, new tariff-related actions reportedly under consideration by former President Trump are also providing support for the dollar.
Market Trends and Key Factors
Dollar-Buying Factors from Yesterday
- November JOLTs Job Openings: Reported at 8.098 million, exceeding the previous figure of 7.839 million and surpassing expectations.
- December ISM Non-Manufacturing PMI: Improved to 54.1 (forecast: 53.6, previous: 52.1), indicating a stronger-than-expected recovery.
These results prompted renewed dollar buying, solidifying support for the USD/JPY pair in particular.
Today’s Key Economic Indicators
ADP Employment Report (December)
- Forecast: +139,000 (a slight decline from the previous +146,000).
- Significance: Viewed as a key precursor to Friday’s employment report, with considerable market attention.
Initial Jobless Claims (Dec. 29 – Jan. 4)
- Forecast: 215,000 (a slight increase from the previous 211,000).
Other Indicators
- US MBA Mortgage Applications (Dec. 28 – Jan. 3)
- German Factory Orders (November)
- Eurozone Consumer Confidence Index (Final, December)
- FOMC Minutes (Dec. 17-18): Any reiteration of members’ hawkish outlook on interest rates could trigger further dollar buying.
Market Impact and Trade Strategy
USD/JPY
- Outlook: Potential upside depending on Trump-related news or hawkish FOMC minutes. A move toward the 158-yen range is possible.
- Strategy: Consider buying on dips, with profit-taking around 158 yen.
EUR/USD
- Outlook: Weak eurozone economic indicators could lead to further declines.
- Strategy: Look for selling opportunities targeting a break below the 1.03 level.
Bitcoin
- Outlook: Relatively less correlated with dollar movements, but a risk-on environment could sustain its upward trend.
- Strategy: Continue buying on dips, focusing on the key psychological level of $98,000.
Summary
The US market is likely to remain sensitive to employment-related indicators and news surrounding Trump’s policy actions. Following the early-year adjustment, the dollar’s buying trend may gain further momentum, making a short-term dip-buying strategy effective. However, given the ongoing thin trading conditions, traders should exercise caution against sudden price swings.
