USD Awaits First NFP Report of 2026 Amid Labor Market Focus

The US dollar remains range-bound ahead of today's highly anticipated Non-Farm Payrolls report, the first employment data release of 2026. Market participants are particularly focused on labor market dynamics as the Federal Reserve's policy outlook has shifted from inflation concerns to employment stability. The November 2025 report faced data quality issues due to the extended government shutdown, making today's figures crucial for establishing reliable trend analysis. Economists expect December payrolls to show a modest 185,000 job additions, with unemployment rate forecasted to hold steady at 4.2%. Any significant deviation from expectations could trigger substantial USD volatility across major pairs. Technical indicators show USD index consolidating near 104.50, with immediate resistance at 104.80 and support at 104.20. A strong employment report could propel the dollar higher, while disappointing figures might accelerate recent USD weakness against major counterparts.