Dollar Rises on Jobs Data; Yen Gains on GDP Growth

* Strong US jobs data fuels dollar gains, with Nonfarm Payrolls surpassing expectations at 227K.* Japan's economy grow 1.2% in Q3, boosting the yen on hopes of a potential rate hike.* All eyes on US inflation data this Wednesday for clues on interest rate directions.

Market Summary

The US Dollar Index strengthened on Friday, driven by robust economic data that highlighted resilience in the US economy. Nonfarm Payrolls rose to 227K, exceeding expectations, while Average Hourly Earnings increased by 0.40%. With the Unemployment Rate steady at 4.2%, market participants are now eyeing Wednesday's Consumer Price Index (CPI) release for further clues on inflation and potential monetary policy adjustments.

Gold prices dipped as stronger US data and rising Treasury yields weighed on the non-yielding asset, though uncertainties in the Middle East offered some support. Similarly, oil prices remained mixed amid fears of supply disruptions after the ousting of Syrian President Bashar al-Assad, offset by weak Chinese demand and a subdued economic outlook.

The Japanese Yen rebounded as Japan’s economy grew at an annualized 1.2% in Q3, exceeding expectations and fueling speculation of a potential rate hike by the Bank of Japan. Meanwhile, Bitcoin soared past $100,000, buoyed by optimism over pro-crypto appointments in the incoming US administration, signaling potential for a more favorable regulatory landscape.

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 last Friday, supported by a series of upbeat US economic data that bolstered confidence in the United States' economic progression. Average Hourly Earnings (MoM) rose 0.40%, beating expectations of 0.30%, while Nonfarm Payrolls climbed to 227K, surpassing forecasts of 202K. The US Unemployment Rate aligned with expectations at 4.2%. Market attention now shifts to the Consumer Price Index (CPI) data on Wednesday.

The Dollar Index is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 49, suggesting the index might extend its gains since the RSI rebounded sharply from oversold territory. 

Resistance level: 106.50, 107.00

Support level: 105.75, 104.50

XAU/USD, H4Gold prices initially dropped following the release of better-than-expected US economic data, which shifted investor sentiment toward other asset classes. Additionally, rising US Treasury yields and a stronger dollar weighed on the non-yielding asset. However, uncertainties surrounding Middle East tensions, particularly after the rebel overthrow of Syrian President Bashar al-Assad and the resulting instability in Syria, sparked market volatility and lent some support to gold prices.

Gold prices are trading higher while currently near the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 54, suggesting the commodity might extend its gains since the RSI stays above the midline. 

Resistance level: 2655.00, 2705.00

Support level: 2610.00, 2555.00

GBP/USD，H4GBP/USD continued its bearish trend, driven primarily by US Dollar strength in the absence of significant market catalysts from the UK. Optimism surrounding the US economic outlook, bolstered by upbeat jobs data, encouraged investors to shift toward US assets. Moving forward, UK economic updates will remain crucial for gauging future GBP/USD movements.

GBP/USD is trading lower following the prior retracement from the resistance level. MACD has illustrated increasing bearish momentum, while RSI is at 45, suggesting the pair might extend its losses since the RSI stays below the midline. 

Resistance level: 1.2790, 1.2850

Support level: 1.2700, 1.2620

EUR/USD，H4EUR/USD fell, pressured by a stronger US Dollar and dovish expectations from the European Central Bank (ECB). The ECB is expected to announce its fourth rate cut of 2024 on Thursday, with markets anticipating a 25-basis-point reduction to 3.0%. Investors are also pricing in additional cuts in 2025, potentially bringing the deposit rate to 1.75%. A decision next week would mark the lowest borrowing costs since March 2023.

EUR/USD is trading lower following the prior retracement from the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 51, suggesting the pair might extend its losses since the RSI retreated sharply from overbought territory. 

Resistance level: 1.0607, 1.0700

Support level: 1.0440, 1.0325

USD/JPY, H4The Japanese Yen saw a slight rebound, driven by a positive economic outlook for Japan and increased speculation that the Bank of Japan may maintain or even hike interest rates. Japan's economy grew at an annualized rate of 1.2% in the July-September quarter, exceeding the initial estimate of 0.9%. This growth was fueled by upward revisions in capital investment and exports, reflecting the country's stronger-than-expected economic performance.

USD/JPY is trading lower while currently near the support level. MACD has illustrated diminishing bullish momentum, while RSI is at 46, suggesting the pair might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 151.80, 154.15

Support level: 149.40, 146.45

 NASDAQ, H4:US stock markets showed resilience on Friday, with gains in technology stocks driven by sustained optimism in artificial intelligence offsetting losses in other sectors sensitive to economic conditions. Investors are also awaiting clearer details on the economic policies of President-elect Donald Trump. The S&P 500 closed up 0.3% at 6,090.27, while the NASDAQ Composite climbed 0.8% to 19,859.77, both reaching record highs.

Nasdaq is trading higher following the prior breakout above the previous resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 74, suggesting the index might enter overbought territory. 

Resistance level:  21955.00, 23100.00

Support level:  21170.00, 20395.00

BTC/USD H4:

Bitcoin, the world's largest digital currency, skyrocketed past the $100,000 milestone for the first time on Thursday following President-elect Donald Trump's announcement of Paul Atkins, a crypto veteran, as his pick to head the Securities and Exchange Commission (SEC). Additionally, Trump named former top PayPal executive and crypto evangelist David Sacks as "White House A.I. & Crypto Czar," sparking optimism about the future of digital assets. 

BTC is trading flat while hovering in a positive trajectory. However, MACD has illustrated increasing bearish momentum, while RSI is at 50, suggesting the crypto might edge lower since the RSI retreated from overbought territory. 

Resistance level: 100765.00, 103805.00

Support level: 97610.00, 93630.00

CL OIL, H4Oil prices experienced mixed performance during early Asian trade on Monday. Rising tensions in the Middle East, following the ousting of Syrian President Bashar al-Assad, raised fears of supply disruptions and offered some support to prices. However, weak Chinese demand and a broader pessimistic economic outlook limited gains. Additionally, the growing adoption of electric vehicles continues to cap the long-term demand outlook for crude oil.

Oil prices are trading flat while currently near the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 40, suggesting the commodity might experience technical correction since the RSI rebounded from oversold territory. 

Resistance level: 68.00, 69.95

Support level: 66.90, 65.50