Market Digest

Stronger-than-expected US labor data boosted the US dollar on Tuesday, with the Dollar Index rising 0.14% to close at 99.24. Treasury yields also climbed, with the benchmark 10-year yield finishing at 4.19% and the policy-sensitive 2-year yield closing at 3.625%.

Silver prices surged more than 4%, reaching a fresh historical high and lifting gold back above $4,210. Market sentiment remains centered on the Federal Reserve’s upcoming rate decision, where a 25 bps cut is widely expected. However, stronger labor indicators increased the probability of a “hawkish cut”, keeping gold traders cautious.

Meanwhile, crude oil prices extended their decline for a second day as Iraq resumed production, pushing WTI to close at $58.28 and Brent to $62.10.

Technical Analysis

USD/CAD – Extends Sharp Selloff as Bears Press Toward Major Support

USD/CAD continues to decline after breaking decisively below the 1.3940 level, shifting the broader market structure into a bearish continuation phase. Price remains below all major EMAs, confirming sustained downward pressure. Although oversold signals appear on the Bollinger Bands, momentum indicators show bearish strength remains intact. The pair is positioned toward testing 1.3740, with deeper losses possible toward 1.3600 if sellers maintain control.
Pullbacks are likely to encounter resistance near 1.3940.

Key Levels:
Resistance: 1.3940, 1.4105
Support: 1.3740, 1.3600

AUD/USD – Bulls Hold Firm as Price Challenges Key Resistance

AUD/USD continues its multi-week advance, pushing into the major resistance region near 0.6680. Price remains above all major EMAs, confirming a healthy uptrend supported by expanding bullish momentum.
While RSI nears overbought territory, only minor consolidation is expected unless price closes below 0.6620. A confirmed breakout above 0.6680 may open the door toward 0.6910.

Key Levels:
Resistance: 0.6680, 0.6910
Support: 0.6620, 0.6585

XAU/USD – Gold Holds Above $4,200 as Market Awaits Fed Catalyst

Gold remains stable around the $4,200 zone as volatility tightens and price consolidates along the upper Bollinger Band. Although MACD momentum is slowing, the broader trend remains bullish as long as price holds above 4,195.
A break above 4,355 would expose the $4,500 region. Until the Fed’s communication becomes clearer, gold is expected to remain in a compressed range.

Key Levels:
Resistance: 4,355, 4,500
Support: 4,195, 4,045

Economic News

Gold Holds Above $4,200 as Markets Brace for Potential ‘Hawkish Cut’

Gold stabilized above $4,200 after dipping earlier, supported by strong central-bank demand led by China’s ongoing reserve accumulation and rising ETF flows. Despite resilient US labor data, markets maintain an 85–90% probability of a December rate cut.
However, expectations for 2026 easing have been downgraded, leaving gold vulnerable to a sharper correction if Powell signals a slower path of rate cuts.

Oil Inventory Decline Overshadowed by Global Supply Concerns

Although US crude inventories dropped sharply by 4.8M barrels—more than triple expectations—WTI continued to weaken due to concerns about a potential 2026 global supply glut. Iraq’s restored output and rising US production kept price rallies muted, with WTI slipping to the $58.20 range before stabilizing.

RBA Holds Rates but Issues Hawkish Guidance

The Reserve Bank of Australia kept rates unchanged at 3.60%, but its communication signaled that upward inflation risks have increased. Markets now expect a possible rate hike in 2026. AUD gained across major pairs, supported by policy divergence against a Fed likely to cut rates this week.

CAD Supported Ahead of Bank of Canada Decision

The Canadian dollar held firm as strong employment data continued to influence expectations. USD/CAD consolidated between 1.3800 and 1.3860, with traders awaiting policy announcements from both the BoC and the Fed.

US Labor Market Data Strengthens Dollar Before Fed Meeting

A surprise rise in US job openings reinforced labor-market resilience and lifted the dollar across the board. Yields rose, and traders increased the odds of a hawkish tilt in the Fed’s communication.

Upcoming Economic Indicators – December 10

JPY PPI, CNH inflation and PPI, Bank of Canada rate decision, and the Federal Reserve’s highly anticipated rate announcement remain the key drivers to watch. Outcomes relative to expectations will guide short-term volatility across major currencies.