Market Digest

Global markets remained defensive as investors awaited one of the week's most important economic events—the U.S. Nonfarm Payrolls report. Despite weaker-than-expected U.S. employment and manufacturing data, the U.S. dollar continued to outperform as traders maintained expectations that the Federal Reserve could deliver another interest rate hike later this year.

Gold rebounded strongly above the $4,000 psychological level after softer ADP employment data pushed Treasury yields lower, encouraging renewed demand for safe-haven assets. However, the recovery remained cautious as investors looked ahead to the official U.S. labour market report, which could determine the next major direction for bullion.

Crude oil extended its losses to a four-month low after improving diplomatic progress between the United States and Iran reduced fears of supply disruptions in the Middle East. Expectations that OPEC+ could approve another production increase, alongside weaker demand expectations, continued to pressure energy prices.

Commodity-linked currencies remained under pressure throughout the session. The Australian dollar weakened as traders reduced expectations for additional Reserve Bank of Australia tightening, while the Canadian dollar suffered from falling oil prices and uncertainty surrounding future USMCA trade negotiations. Meanwhile, USD/CAD continued climbing toward multi-month highs as broad U.S. dollar strength outweighed positive domestic Canadian economic data.

With markets entering a critical phase, traders are now focused on Thursday's Nonfarm Payrolls, Average Hourly Earnings, and Unemployment Rate reports, which are expected to shape Federal Reserve expectations and drive significant volatility across currencies, commodities, and global equity markets.

Technical Analysis

AUD/USD – Selling Pressure Intensifies Near Long-Term Support

AUD/USD remains firmly bearish after breaking below the important 0.6995 support level. The pair continues to trade beneath all major moving averages while RSI approaches oversold territory and the MACD confirms strengthening downside momentum. Immediate support lies at 0.6850, while any recovery is expected to face resistance near 0.6995 before 0.7070.

USD/CAD – Bulls Target Fresh Multi-Month Highs

USD/CAD continues trading within a strong bullish trend as broad U.S. dollar strength and falling crude oil prices support further upside. Although the RSI signals overbought conditions, momentum indicators continue favouring buyers. Holding above 1.4115 keeps the bullish outlook intact, with resistance located at 1.4265 and 1.4386.

USOIL – Bearish Momentum Accelerates Below Key Support

WTI crude remains under significant selling pressure after breaking below the major $70.30 support level. Momentum indicators continue pointing lower despite oversold conditions, suggesting that any rebound may prove temporary unless prices recover above key resistance. A sustained decline could expose the next major support near $62.30.

Economic News

Gold Reclaims $4,000 as Weak U.S. Employment Data Eases Yield Pressure

Gold recovered sharply after weaker-than-expected ADP employment figures reduced Treasury yields and encouraged buying interest. Although the rebound temporarily improved market sentiment, investors remain cautious as expectations for another Federal Reserve rate hike continue limiting upside potential. The upcoming Nonfarm Payrolls report will likely determine whether gold extends its recovery or resumes its broader correction.

Oil Falls to Four-Month Low as Supply Outlook Improves

Crude oil extended its decline after progress in U.S.-Iran negotiations and expectations of increased OPEC+ production reduced concerns over global supply disruptions. Although U.S. crude inventories continued falling, the smaller-than-expected drawdown reinforced expectations that supply conditions remain comfortable. Market attention now shifts toward OPEC+ decisions and future demand prospects.

Australian Dollar Pressured by Dollar Strength

The Australian dollar remained under pressure as stronger U.S. monetary policy expectations widened yield differentials in favour of the greenback. Combined with weaker commodity prices and slowing Chinese economic momentum, the outlook for the Aussie remains challenging despite stable domestic monetary policy expectations.

Canadian Dollar Weakens as Oil Prices Decline

The Canadian dollar continued losing ground as crude oil prices dropped below $69 per barrel and trade uncertainty surrounding the upcoming USMCA review weighed on investor sentiment. While Canada's economic growth remains relatively resilient, falling energy prices continue to dominate the outlook for the commodity-linked currency.

U.S. Dollar Holds Firm Ahead of Nonfarm Payrolls

The U.S. dollar maintained its strength despite softer ADP employment and ISM Manufacturing PMI figures. Markets continue pricing in the possibility of another Federal Reserve rate hike as policymakers emphasize that inflation remains above target. Thursday's labour market report is expected to provide the next major catalyst for the dollar and broader financial markets.

Upcoming Economic Events

Investors will closely monitor the U.S. Nonfarm Payrolls, Average Hourly Earnings, and Unemployment Rate reports. These indicators are among the Federal Reserve's most closely watched measures of labour market strength and wage inflation. Stronger-than-expected results would reinforce expectations for higher interest rates and support the U.S. dollar, while weaker figures could revive expectations for policy easing, boosting gold and increasing volatility across global financial markets.