Dollar Gains Ahead of NFP

*Markets remained cautious as investors awaited clarity from Friday’s labour data, keeping both the dollar and equities in check.

*The dollar held firm despite soft economic signals, with attention shifting to the upcoming NFP for direction.

*Oil rebounded sharply on a brighter demand outlook and U.S. sanctions on Iranian oil.

Market Summary

Markets traded cautiously on Thursday as investors weighed soft U.S. data ahead of Friday’s key nonfarm payrolls report. Jobless claims jumped to 241,000—an eight-month high—while ISM Manufacturing fell to 48.7, signaling deepening industrial weakness. The ADP report further dampened sentiment, showing only 62,000 private jobs added in April, well below expectations.

Despite macro headwinds, equities held firm, buoyed by strong tech earnings from Microsoft and Meta. However, risk appetite appears tentative, with investors awaiting labor market clarity before extending bullish positioning.

The U.S. dollar edged higher but remained capped below the 100.00 mark as markets reassessed Fed outlook. A weak NFP print could revive dovish rate expectations, pressuring the dollar and supporting FX majors.

Oil prices gained amid renewed optimism surrounding U.S.-China trade tension and new round of  sanctions on Iranian exports, while gold traded flat as inflation risks competed with signs of labor market cooling.

In the currency market, USD/JPY surged past 144.00 after the Bank of Japan postponed its inflation target timeline, while EUR/USD tested support as dollar strength persisted.

All eyes now turn to Friday’s NFP report, which could provide a decisive signal on whether the U.S. economy is gliding toward a soft landing—or something more severe.

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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 surged decisively above the psychological 100.00 level, signaling a bullish shift in sentiment toward the greenback. The rally was fueled by reports that former President Trump is taking steps to engage with China in efforts to ease trade tensions sparked by sweeping global tariffs announced earlier this year. The renewed dialogue has boosted risk appetite across markets while reinforcing demand for the dollar amid geopolitical recalibration.

The dollar index has broken above its critical resistance level while trading in a higher-high price pattern, suggesting a bullish bias for the index. The RSI is poised to break into the overbought zone while the MACD edged higher after break above the zero line, suggesting the bullish momentum is gaining. 

Resistance level: 101.40, 104.25

Support level: 99.10, 96.35

XAU/USD, H4

Gold prices hovered near recent lows as investors rotated away from safe-haven assets amid a recovery in global risk sentiment. Market tone improved after China responded to President Trump’s trade rhetoric, confirming that discussions with U.S. officials are ongoing. Beijing’s signal that “the door remains open” for trade talks helped ease geopolitical tensions and bolstered risk-on sentiment across markets.

Gold prices extended losses after breaking below the critical support level at $3278, suggesting a bearish bias for gold. The RSI has been keeping below the 50 level, while the MACD has broken below the zero line, suggesting that gold is now trading with bearish momentum. 

Resistance level:  3276.00, 3330.00

Support level: 3185.00, 3145.00

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GBP/USD，H4

GBP/USD extended its decline for a third straight session, slipping below the 1.3300 handle as renewed U.S. dollar strength and dovish Bank of England expectations weighed on the pound. The UK’s manufacturing PMI remained in contraction for a seventh consecutive month, adding to speculation that the BoE could begin cutting rates as early as May, with markets now pricing in up to 100 bps of easing this year. The policy divergence between the Fed and the BoE continues to pressure sterling, especially as U.S. data remains mixed but resilient. Traders will turn their attention to Friday’s UK services PMI and the U.S. nonfarm payrolls report for the next directional cues. A weak UK print could accelerate downside momentum in the near term.

GBP/USD continued to retreat, breaking below 1.3300 and reinforcing a bearish bias. The RSI has slipped to 36, confirming bearish pressure, while the MACD is trending lower below the signal line, pointing to fading bullish momentum. Upcoming U.S. and UK data will be crucial for near-term direction.

Resistance level:   1.3340, 1.3420

Support level: 1.3270, 1.3185

EUR/USD, H4

EUR/USD extended its decline after breaking key trend support as the U.S. dollar remains firm on improved risk sentiment and fading demand for safe-haven assets. The euro’s recent rally has stalled amid profit-taking and renewed concerns over Eurozone economic softness. With ECB rate cut expectations building and inflation data remaining subdued, the shared currency continues to struggle for upside momentum. Attention turns to Friday’s Eurozone CPI and U.S. nonfarm payrolls reports, which are expected to inject volatility into the pair. Diverging policy paths between the Fed and ECB remain central to near-term direction.

The pair is hovering near a key support level after retreating from recent highs, indicating a potential shift toward bearish momentum. The RSI has edged lower to 37 after slipping below the 50 mark, reinforcing the bearish bias. Meanwhile, the MACD remains below the signal line and is close to breaking further below the zero line, suggesting that downside momentum may be building.

Resistance level: 1.1430, 1.1540

Support level: 1.1285, 1.1190

Nasdaq, H4: 

The Nasdaq surged in the previous session, buoyed by strong earnings from Amazon and continued improvement in risk appetite. The tech-heavy index has climbed nearly 2% this week, supported by optimism around renewed trade dialogue between the U.S. and China. Investors now turn their attention to today’s U.S. nonfarm payrolls report, which could set the tone for markets and influence expectations around the Federal Reserve’s next policy move.

The index extended its gain after breaking above the asymmetric triangle price pattern, suggesting a bullish bias. The RSI is approaching the overbought zone, while the MACD has broken above the zero line and is moving upward, suggesting that the index’s bullish momentum remains strong. 

Resistance level: 20150.00, 21000.00

Support level: 19,450.00, 18810.00

USD/JPY, H4: 

USD/JPY extended its rally, breaking above the 144.00 level and confirming bullish momentum with a 1.76% gain. The yen came under renewed pressure after the Bank of Japan left interest rates unchanged and downgraded its economic outlook, reinforcing expectations for a prolonged accommodative stance. Governor Ueda’s cautious tone pushed rate hike expectations further out, adding to yen pressure. Despite mixed U.S. data, firm Treasury yields and strong tech earnings kept the dollar supported. Attention now turns to today’s NFP report, which could shape near-term direction depending on labor market signals. 

USD/JPY is now heading toward its next resistance level at near 147.15 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: 147.15, 151.15

Support level: 143.95, 140.45

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Crude Oil, H4

Crude oil prices staged a strong rebound in the previous session after the U.S. imposed fresh sanctions on Iranian oil exports, raising concerns over short-term supply disruptions. Sentiment was further lifted by renewed optimism around China-U.S. trade talks, improving the demand outlook. Despite the rally, oil remains capped below the 61.8% Fibonacci retracement level, indicating the commodity is still trading within a broader downtrend.

Oil prices jumped more than 5% since the last session and reached the previous pivotal level at near $60.00. A break above this level should be a bullish signal for oil. The RSI has jumped out from the oversold zone, while the MACD has a golden cross at the bottom, suggesting that the bearish momentum is easing. 

Resistance level: 61.50, 67.00

Support level: 57.50, 52.15