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4 June 2025,06:48

Daily Market Analysis

U.S. Dollar Gains Momentum Ahead of Key Jobs Data Amid Improving Risk Sentiment

4 June 2025, 06:48

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Key Takeaways:

*The U.S. dollar gained ahead of today’s ADP job data as the JOLT’s Job Opening data came beating market expectations.

*Better-than-expected U.S. economic indicators bolster Wall Street sentiment.

Market Summary:

The U.S. dollar strengthened in the previous trading session as markets positioned themselves ahead of today’s crucial ADP employment report, a key precursor to Friday’s more comprehensive nonfarm payrolls data. The greenback found additional support from Tuesday’s stronger-than-expected JOLTs job openings figure, which came in at 7.391 million—exceeding market forecasts and reinforcing optimism about the resilience of the U.S. labor market.

The dollar’s strength was further bolstered by external factors, including softer-than-anticipated Eurozone inflation data and a dovish tilt in the latest Reserve Bank of Australia (RBA) meeting minutes. These developments reinforced the relative attractiveness of the U.S. economy, where growth and monetary policy expectations remain more favorable compared to other major economies.

Concurrently, Wall Street exhibited robust risk appetite, with the tech-heavy Nasdaq and S&P 500 both advancing over 0.5% in the previous session. This rally was led by standout performances from Nvidia and Microsoft, both of which reported better-than-expected earnings, fueling optimism about the artificial intelligence sector and broader corporate profitability.

The dollar’s ability to sustain its upward momentum will hinge on today’s ADP release and whether risk assets continue their climb. Should equities extend gains while economic data remains firm, the dollar could maintain its bullish bias ahead of Friday’s payrolls report.

Technical Analysis

Dollar_index, 4H:

The U.S. dollar index has managed to stabilize following its recent decline, finding tentative support and rebounding from its lows. However, the recovery now faces a crucial challenge at the 99.20 resistance level, which represents a key inflection point for near-term direction. A sustained break above this barrier could signal the beginning of a more meaningful recovery, potentially targeting the 99.50-99.60 area.

Yet the broader technical landscape remains cautiously tilted toward the downside. The Relative Strength Index, while showing slight improvement, continues to reflect restrained bullish conviction. More significantly, the MACD’s stagnant position beneath the zero line underscores the persistent bearish momentum that has characterized recent trading. This divergence between price action and momentum indicators suggests the rebound may lack durability unless accompanied by stronger technical confirmation.

Resistance Levels: 100.30, 101.90

Support Levels: 98.10, 96.55

S&P 500, H4

The S&P 500 climbed to 5,981.35 in the previous session, marking its highest level in three months and reinforcing a constructive technical outlook. The index’s breakout from its recent consolidation range between 5,855 and 5,940 signals a potential acceleration of its upward trajectory, suggesting buyers have gained sufficient conviction to push prices beyond previous resistance.

Supporting this bullish technical structure, momentum indicators paint an encouraging picture. The Relative Strength Index maintains healthy upward momentum without yet reaching overbought territory, indicating room for further gains. Meanwhile, the Moving Average Convergence Divergence continues to hold firmly above the zero line, confirming that the underlying trend remains positive despite its relatively flat trajectory in recent sessions.

Resistance Levels: 6120.00, 6310.00
Support Levels: 5860.00, 5630.00

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