Forex Today: The UK jobs report takes centre stage

The US Dollar kicked off the new trading week sharply on the defensive as market participants closely followed President Trump's Inauguration Day amid the inactivity in the US markets due to the MLK Jr. Day.

Here is what you need to know on Tuesday, January 21:

The US Dollar Index (DXY) accelerated its decline and receded to new two-week lows in the sub108.00 region on Monday. Absent relevant data releases on Tuesday, investors are expected to remain focused on announcements from the Trump administration.

EUR/USD climbed strongly and hit two-week peaks just beyond 1.0400 the figure in response to the generalised bid bias in the risk-associated universe. The Economic Sentiment tracked by the ZEW Institute in Germany and the broader Euroland are due, along with an ECOFIN meeting.

GBP/USD reclaimed the area above the key 1.2300 barrier in reponse to the intense sell-off in the Greenback on Monday. The main attraction in the FX world will be the publication of the UK labour market report.

Further repricing of rate hikes by the BoJ lent support to the Japanese yen and sparked a deeper retracement in USD/JPY, this time approaching the 155.00 mark. The Balance of Trade results will be the next salient event in Japan on January 23 seconded by weekly Foreign Bond Investment figures.

Surprisingly, AUD/USD traded on the defensive on Thursday, briefly breaking below the 0.6200 support despite the inconclusive Dollar and a solid jobs report in Oz. Next on tap Down Under will be the release of the Westpac Leading Index in December.

Prices of WTI sold off to multi-day lows and pierced the $76.00 mark per barrel as traders kept weighing potential developments from the Trump administration.

Prices of Gold resumed their move higher on Monday, maintaining the trade above the key $2,700 mark per ounce troy. Silver prices met support around the key 200-day SMA amid quite a positive start to the week.