Dollar holds slightly firmer to start the session

Dollar leads the charge in the major currencies space

With the Fed continuing to brush aside omicron risks, and even using it as a segue to build a case for quicker tapering and rate hikes, it just means that the virus situation has to take a major turn for the worse to really derail the Fed’s plans at this point.

As such, the dollar is likely to stay buoyed by that for now as omicron headlines are only just slowly building up and concerns surrounding vaccine efficacy are still not fully justified yet – will take a few weeks before getting more clarity on that.

USD/JPY is up 20 pips to 113.30 levels again as buyers appear to have established a base at the 9 November low @ 112.72, at least on the daily chart:

USD/JPY D1 03-12

That is a decent base to build on with price even clawing its way just back above the 100-hour moving average @ 113.24 for the first time in trading this week.

That will see the near-term bias keep more neutral with plenty of room to roam between that and 114.00, risk-permitting that is. Don’t forget that we also still have the US non-farm payrolls report to deal with later in the day.

Meanwhile, EUR/USD is also tracking lower to 1.1282 as the pair now trades lower on the week with the earlier gains at the start of the week being erased already.

EUR/USD H1 03-12

Notably, price action has also fallen back to sit in between the key hourly moving averages and that is keeping the near-term bias more neutral for now. In essence, the pair is still relatively caught in a narrow range this week without any real impulse to break free.

Elsewhere, the aussie and kiwi are struggling quite a fair bit against the dollar and the technical implications there won’t make it easy for either currency as outlined here.

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