Dollar Gains Ahead of NFP

• Markets remained cautious as investors awaited clarity from Fridays 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 Fridays 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 Fridays NFP report, which could provide a decisive signal on whether the U.S. economy is gliding toward a soft landing—or something more severe.

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

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