USD Braces for Jobs Data and Fed Minutes Double Impact

The US dollar index has retreated 0.3% to 106.20 ahead of a crucial week featuring employment data and Federal Reserve minutes that could reshape rate expectations. EURUSD has advanced to 1.0565 while USDCHF dropped to 0.8850 as traders position defensively before the high-impact releases. Wednesday's FOMC minutes will provide insights into the Fed's December rate decision deliberations, with markets seeking clues about the pace of future cuts. Friday's Non-Farm Payrolls report, expected at 185K versus 227K previously, will be pivotal for dollar direction. Current Fed funds futures show a 65% probability of a January pause in rate cuts, supporting the dollar's recent resilience. Technical analysis shows the DXY testing support at 106.00, with a break below potentially accelerating losses toward 105.50. Upside resistance remains firm at 106.80, requiring positive data surprises to overcome.