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Dollar Extends Gains on Strong Jobs Data and Oil-Driven Inflation Risks

Published: 6 April 2026,02:56

Daily Market Analysis New

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Key Takeaways:

*Dollar strengthens on rising yields and geopolitical tensions

*Oil surge fuels inflation concerns, supporting tighter policy expectations

*Strong NFP and lower unemployment reinforce economic resilience

*Gold retreats as stronger dollar reduces safe-haven appeal

Market Summary:

The U.S. dollar extended its gains, supported by rising Treasury yields and escalating geopolitical tensions between the United States and Iran, which have heightened concerns over inflation risks.

The dollar index — which tracks the greenback against a basket of six major currencies — strengthened as markets priced in the potential impact of rising energy prices. Recent developments, including renewed threats from Donald Trump to target Iranian energy infrastructure and demands to reopen the Strait of Hormuz, have increased doubts over the effectiveness of ongoing negotiations. As tensions escalate, crude oil prices have surged, with markets factoring in the risk of supply disruptions.

The rise in oil prices has further amplified inflation concerns, pushing U.S. Treasury yields higher and reinforcing expectations that the Federal Reserve may maintain a tighter monetary policy stance.

Adding to dollar strength, recent labor market data pointed to continued economic resilience. According to the Bureau of Labor Statistics, U.S. Nonfarm Payrolls increased sharply to 178,000 from a previous reading of -133,000, significantly exceeding market expectations of 65,000. Meanwhile, the unemployment rate also came in better than expected, further supporting confidence in the strength of the U.S. economy.

The combination of strong economic data and rising inflation expectations has provided the Federal Reserve with greater flexibility to sustain restrictive policy settings, supporting the dollar in the near term.

Meanwhile, gold prices retreated in the short term as the strengthening dollar and higher yields reduced the appeal of non-yielding assets. Although geopolitical tensions typically support safe-haven demand, the dominant influence of monetary tightening expectations has weighed on gold, limiting its upside in the current environment.

Technical Analysis

DOLLAR_INDX, H4

The dollar index is trading higher, currently approaching the key resistance level at 100.45, which serves as a near-term breakout point.

Momentum indicators remain supportive, with the MACD strengthening and the RSI at 58 holding above the midline, suggesting continued bullish pressure.

A confirmed breakout above 100.45 would likely extend gains toward the next resistance at 101.25, reinforcing the upward trend.

However, if bullish momentum fails to sustain, the index may enter a corrective phase, with prices likely to retest the 99.70 support level, followed by 99.10 if selling pressure intensifies.

Resistance Levels: 100.45, 101.25

Support Levels: 99.70, 99.10

XAUUSD, H4

Gold prices are trading sideways, currently testing the 4,600.00 support level, which aligns with the lower boundary of the ascending channel.

Momentum is turning cautious, with the MACD expanding to the downside and the RSI at 47 below the midline, indicating growing bearish pressure in the near term.

A confirmed break below 4,600.00 could accelerate losses toward the next support at 4,380.00, marking a deeper corrective move.

However, if bearish momentum fails to sustain, gold may rebound toward the 4,800.00 resistance level, maintaining its broader range structure.

Resistance Levels: 4800.00, 4970.00
Support Levels: 4600.00, 4350.00

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