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 Fridays 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.

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

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