Dollar Gains on Strong U.S. Data; Soft ADP Jobs Hint at Weak NFP

*PCE beating market expectations, boosting the dollar’s strength.

*ADP nonfarm employment reading came significantly lower, eye on Friday’s NFP.

*Gold slides to a new low as market demand for safe-haven dampens.

Market Summary

Markets remained largely subdued earlier this week as investors awaited key U.S. economic data for fresh direction. On Wednesday, the Personal Consumption Expenditures (PCE) index came in slightly above expectations, while GDP figures also beat market consensus—reinforcing the view that the Federal Reserve is likely to keep interest rates elevated in May. The U.S. dollar edged higher on the back of the data, while equities extended gains, albeit modestly, with Wall Street closing in positive territory.

However, the ADP nonfarm employment report fell sharply short of forecasts, signaling a potential downside surprise in Friday’s official NFP report—a scenario that could cap further dollar strength.

In commodities, gold prices slipped as improved sentiment over China-U.S. trade relations weighed on safe-haven demand. Meanwhile, oil prices continued to slide, with WTI crude falling below the key $60.00 level. Concerns over weakening global demand and expectations that OPEC, led by Saudi Arabia, may ramp up supply added to the bearish momentum in the energy market.

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Current rate hike bets on 7th May Fed interest rate decision: 

0 bps (92.3%) VS -25 bps (7.7%)

Source: CME Fedwatch Tool

Market Movements

DOLLAR_INDX, H4

The Dollar Index (DXY) saw modest gains in the previous session, supported by stronger-than-expected U.S. GDP data and the Federal Reserve’s preferred inflation gauge, the Core PCE Price Index. The robust economic indicators reinforce expectations that the Fed will maintain interest rates at elevated levels for an extended period, lending further support to the greenback. Market attention now turns to Friday’s Nonfarm Payrolls (NFP) report, which will provide critical insights into the labor market’s strength ahead of next week’s Federal Reserve monetary policy decision.

The Dollar Index gained slightly but is approaching its critical resistance level at near 100.00, a break below, which suggests a solid bullish signal for the index. The RSI has jumped slightly, while the MACD has a golden cross at the bottom, suggesting that the bearish momentum is easing. 

Resistance level: 101.40, 104.25

Support level: 99.10, 96.35

XAU/USD, H4

Gold prices have decisively broken below their recent trading range, signaling a bearish shift. The move comes as the U.S. dollar extends gains, pressuring the metal, while improving risk sentiment across financial markets further dampens demand for traditional safe-haven assets. The combination of a firmer greenback and reduced haven bids has driven gold lower, with traders now assessing whether the downside momentum will persist.

Gold prices have broken below their week-long sideways range, suggesting a bearish bias for gold. The RSI has dipped lower while the MACD is struggling to hold above the zero line, suggesting that the bullish momentum has vanished. 

Resistance level:  3305.00, 3400.00

Support level: 3185.00, 3145.00

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GBP/USD，H4

The GBP/USD pair fell over 0.5% in the previous session as the U.S. dollar gained traction following stronger-than-expected economic data. The pound remains under pressure amid growing market expectations that the Bank of England (BoE) could deliver a rate cut as early as May. Traders will focus on today’s UK PMI figures for further clues on the economy’s health. A weaker-than-forecast print could reinforce dovish BoE expectations, potentially exacerbating downside risks for sterling.

GBP/USD dipped nearly 1% from its recent peak level, dropping below its previous low at 1.3300, which should indicate a solid bearish bias for the pair. The RSI has crossed below the 50 level, while the MACD is heading toward the zero line from above, suggesting that the bullish momentum is vanishing. 

Resistance level:   1.3340, 1.3420

Support level: 1.3270, 1.3185

EUR/USD, H4

EUR/USD has breached its uptrend support and now tests the weekly low near 1.1310, signaling a bearish shift. The pair remains under pressure as the dollar strengthens, while the euro lacks near-term catalysts to stem the decline. In tomorrow’s session, volatility is expected to spike, with eurozone CPI and U.S. nonfarm payrolls (NFP) data set to drive directional momentum. The releases could dictate near-term price action as traders assess diverging monetary policy paths between the ECB and Fed.

The pair has reached its one-week low after breaking below the long-term uptrend support level, suggesting a bearish bias for the pair. The RSI edged lower after crossing below the 50 level, while the MACD is poised to break below the zero line, suggesting a bearish momentum is forming. 

Resistance level: 1.1340, 1.1468

Support level: 1.1200, 1.1075

Nasdaq, H4: 

The Nasdaq Composite edged higher in the previous session, supported by strong earnings from Microsoft Corp., but struggled near the psychologically significant 20,000 resistance level. While the tech-heavy index benefited from Microsoft’s upbeat results, upside momentum was tempered by hotter-than-expected U.S. PCE inflation data, which reinforced expectations of a more hawkish Fed stance. The index now faces a technical test at current levels, with traders weighing robust corporate earnings against lingering rate uncertainty.

Nasdaq broke above its immediate resistance level at 19480, suggesting a bullish bias for the pair. The RSI continued to gain while the MACD edged higher, suggesting that bullish momentum is gaining. 

Resistance level: 20150.00, 21000.00

Support level: 18810.00, 18015.00

USD/JPY, H4: 

USD/JPY continues its upward trajectory, establishing a series of higher highs that confirms the pair’s bullish momentum. The yen remains under pressure as markets price in expectations for the Bank of Japan to maintain its dovish stance at Friday’s policy decision. The pair’s advance is further supported by broad-based U.S. dollar strength, with the DXY index holding near recent highs. Traders will focus on today’s BoJ meeting to confirm policy direction, with any deviation from current dovish expectations potentially triggering yen volatility.

USD/JPY is now heading toward its next resistance level at near 144.00 from its recent low, suggesting a bullish bias for the pair. The RSI found support at the above 50 level, while the MACD seems to rebound from above the zero line, suggesting that the pair remains trading with bullish momentum. 

Resistance level: 143.95, 147.15

Support level: 140.45, 137.45

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Crude Oil, H4

Oil prices tumbled through the critical $60.00 support level Thursday, extending their steepest monthly decline since 2021. The breakdown reflects growing anxiety over demand prospects as renewed trade tensions cloud the global economic outlook, while market participants increasingly anticipate OPEC may move to restore full production capacity. The violation of this psychological support level reinforces bearish technical momentum, with fundamentals and sentiment now aligned to potentially drive prices lower. Traders remain particularly sensitive to any signs of weakening demand coinciding with potential supply increases, creating a challenging environment for crude benchmarks.

Oil prices tumbled after the head-and-shoulder price pattern formed and reached a monthly low level, suggesting a bearish bias for oil. The RSI has dipped into the oversold zone, while the MACD crossed below the zero line and is diverging, suggesting that the bearish momentum is gaining. 

Resistance level: 61.50, 67.00

Support level: 57.50, 52.15