Upbeat U.S. PMI Boost Dollar

• The dollar continued to strengthen as the dollar was bolstered by the upbeat PMI readings yesterday.

• The ceasefire deal violation between Israel and Hezbollah may stimulate safe-haven gold.

• BTC faced selling pressure as the BTC dominance reading continued to slide.

Market Summary

The dollar posted modest gains yesterday, bolstered by President-elect Trump‘s remarks threatening BRICS and stronger-than-expected U.S. PMI data, which supported the greenback. However, the dollar faces key challenges ahead, including Wednesday’s job data, the Fed‘s Beige Book, and Friday’s Nonfarm Payroll report. In contrast, weaker-than-expected PMI readings in the UK and Eurozone weighed on the pound and the euro, dampening their performance.

In the commodity market, gold remains under pressure from the strengthening dollar. However, escalating geopolitical tensions in the Middle East—amid reports of Israeli airstrikes in Lebanon and retaliatory actions by Hezbollah—could renew demand for the safe-haven asset. Oil prices, meanwhile, remain subdued as traders focus on Thursdays OPEC+ meeting, where an extension of supply cuts is widely anticipated.

In the cryptocurrency market, Bitcoin faced selling pressure as its dominance waned, while altcoins saw notable gains, continuing their recent upward momentum.

Current rate hike bets on 18th December Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (40.4%) VS -25 bps (59.6%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index rebounded, supported by President-elect Donald Trumps threats to impose 100% import tariffs on BRICS nations unless they abandon plans for a joint currency or alternatives to the US Dollar for international trade. The BRICS alliance, comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the UAE, has been exploring de-dollarization to reduce dependence on the US Dollar as a reserve currency.

The Dollar Index is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 52, suggesting the index might extend its gains since the RSI stays above the midline.

Resistance level: 106.85, 108.05

Support level: 105.80, 104.45

XAU/USD, H4

Gold prices rebounded amid renewed concerns over trade uncertainties after President-elect Donald Trump announced additional tariffs on BRICS nations. With the inclusion of major economies such as China, the proposed tariffs heighten fears of retaliatory actions, which could lead to increased market volatility. Additionally, US Treasury yields dipped, further bolstering gold's appeal as a safe-haven asset. Moving forward, geopolitical developments and Trumps trade policies will likely drive gold price movements.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 50, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline.

Resistance level: 2650.00, 2705.00

Support level: 2610.00, 2550.00

GBP/USD，H4

The GBP/USD pair tumbled to its recent low of 1.2620, pressured by multiple bearish factors. The UK PMI readings, released yesterday, fell below the 50-mark, signaling economic contraction and weighing heavily on the pound. Meanwhile, the dollar gained support from stronger-than-expected U.S. PMI data and bold remarks from President-elect Donald Trump, further intensifying downward pressure on the pair.

The GBP/USD continues to slide from its recent peak near the 1.2750 mark; a break below the 1.2620 mark may be a trend reversal signal for the pair. The RSI has slid to below the 50 level while the MACD has a deadly cross on the above, suggesting that the bullish momentum is easing.

Resistance level:1.2700, 1.2790

Support level: 1.2620, 1.2505