Dollar Wobbles as Wall Street Eyes ‘Magnificent Seven’ Reports

*Wall Street consolidated ahead of critical “Magnificent Seven” earnings, with volatility expected to rise.

*The dollar held flat with a bearish bias as recession fears and softer Treasury yields weighed on sentiment.

*Gold and oil stayed firm as cautious trade optimism and geopolitical risks balanced market flows.

Market Summary

Volatility is set to rise this week as investors brace for earnings reports from the “Magnificent Seven” tech giants, with Apple, Microsoft, Amazon, and Meta Platforms scheduled to report in the coming days. Markets consolidated ahead of the releases, with sentiment cautious but resilient, as traders positioned for potential sharp moves across equities and currencies.

U.S. equities ended mixed overnight, with the S&P 500 holding steady while the Nasdaq showed slight weakness, reflecting investor hesitancy ahead of the high-profile earnings deluge. While Tesla and Alphabet delivered upbeat results earlier, broader market conviction remains fragile, hinting on whether the tech heavyweights can sustain earnings momentum amid a challenging macro backdrop.

In currency markets, the U.S. dollar stayed flat with a slight bearish tilt, as recession fears deepened on the back of softer Treasury yields and persistent trade tensions. The Dollar Index hovered near recent lows, with traders awaiting critical catalysts including Q1 GDP, Core PCE inflation, and Nonfarm Payrolls, which are likely to set the next directional bias for the greenback.

Commodities were mixed, with gold prices retreating slightly as cautious optimism around the U.S.-China trade negotiations tempered safe-haven flows. Oil prices stabilized after recent declines, caught between economic slowdown fears and the potential supply shifts stemming from U.S.-Iran nuclear discussions. Meanwhile, tariff headlines continued to stir broader market uncertainty, with ongoing concerns that renewed trade barriers could weigh further on global growth prospects.

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Current rate hike bets on 7th May Fed interest rate decision: 

0 bps (95.2%) VS -25 bps (4.8%)

Source: CME Fedwatch Tool

Market Movements

DOLLAR_INDX, H4

The Dollar Index, which measures the greenback against six major currencies, remained flat but showed a slight bearish bias amid growing concerns over the negative impact of the trade war. Treasury yields declined, signaling rising recession fears in the U.S. Nonetheless, ahead of several key data releases later this week, investors maintained a wait-and-see approach. This week’s focus will be on major U.S. economic releases, including Q1 2025 GDP, Core PCE Price Index, and Nonfarm Payrolls, which are expected to provide clearer direction for the dollar.

The Dollar Index is trading lower following the prior retracement from the resistance level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 35, suggesting the index might experience technical correction since RSI rebounded from oversold territory. 

Resistance level: 100.40, 101.95

Support level: 98.30, 96.35

XAU/USD, H4

Gold prices retreated slightly following some optimism around US-China trade discussions. US Treasury Secretary Scott Bessent confirmed ongoing contact with China, although China quickly downplayed the statement. President Trump asserted that negotiations were underway, but details remain vague. With critical releases — including US GDP, employment, and inflation data — due this week, gold traders are expected to tread cautiously, awaiting further clarity before making major moves.

Gold prices are trading lower following the prior retracement from the resistance level. However, MACD has illustrated increasing bullish momentum, while RSI is at 52, suggesting the commodity might experience technical correction since the RSI stays above the midline. 

Resistance level:  3375.00, 3495.00

Support level: 3270.00, 3200.00

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GBP/USD，H4

The GBP/USD pair decisively broke above its fair-value-gap in the last session, reaching its highest level since last September, reinforcing a bullish bias for the pair. The U.S. dollar eased as it lacked fresh catalysts, while the Pound Sterling gained momentum following stronger-than-expected Retail Sales data from last Friday, which fueled the rally. Looking ahead, traders are closely watching today’s speech by BoE’s Woods, which could provide important clues about the Bank of England’s May interest rate decision and potentially steer the Pound Sterling’s next move.

The GBP/USD pair gained sharply and reached a new high, suggesting a bullish bias for the pair. The RSI has gained to near the overbought zone, while the MACD shows signs of rebounding from above the zero line, suggesting that bullish momentum may be forming. 

Resistance level:  1.3505, 1.3606

Support level: 1.3340, 1.3270

USD/CAD, H4

The USD/CAD pair continues to hover near its lowest levels since last October, with recent price action suggesting a potential break below its sideways consolidation range. Traders are turning their attention to the upcoming Canadian election, where Liberal Party leader Mark Carney is widely expected to win. Carney, viewed as a figure of continuity following former Prime Minister Justin Trudeau, could help restore political stability. A stable political outlook would likely boost confidence in the Canadian dollar, adding further downside pressure on USD/CAD.

The pair has been sideways for the past week but currently shows signs of breaking below from the range. A break below should be a solid bearish signal for the pair. The RSI remains hovering near the 50 level while the MACD is attempting to break above from the zero line, suggesting that the bearish momentum is minimal currently. 

Resistance level: 1.3905, 1.4070

Support level: 1.3740, 1.3615

Nasdaq, H4: 

The US equity market remained flat, consolidating within a range as investors awaited earnings from the “Magnificent Seven” megacaps — Apple, Microsoft, Amazon, and Meta Platforms, all set to report later this week. While companies like Tesla and Alphabet have posted decent earnings so far, investors remain cautious, waiting to see if the upbeat trend is sustainable. The upcoming tech results are likely to be crucial for gauging the next move in equities.

Nasdaq is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 60, suggesting the index might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 19495.00, 20140.00

Support level: 18850.00, 18055.00

USD/JPY, H4: 

The USD/JPY remains under pressure as renewed trade tensions, global growth concerns, and safe-haven flows bolster the yen. China’s denial of U.S. tariff talks and the IMF’s downgraded forecasts have heightened recession fears, while Tokyo’s surging CPI strengthens expectations for a more hawkish Bank of Japan later this year. At the same time, softer U.S. data and falling Treasury yields have weakened the dollar, with the DXY slipping further. Adding to the cautious mood, Komatsu’s profit warning highlighted the growing economic fallout from escalating trade disputes.

USD/JPY is holding near 142.40 but remains capped below the 143.95 resistance zone. While price action shows signs of stabilization, upside momentum appears limited. The RSI is at 46 after retreating from the overbought territory near 70, signaling fading bullish strength. Meanwhile, the MACD has crossed below its signal line and turned negative, indicating a shift toward bearish momentum.

Resistance level: 143.95, 147.15

Support level: 140.45, 137.45

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Crude Oil, H4

Oil prices stabilized after a recent decline, weighed down by signs of strain in the US economy and ongoing US-Iran nuclear negotiations. Geopolitical developments remain in focus, with talks between Washington and Tehran potentially leading to a loosening of sanctions on Iranian oil over time. Iran has also pitched its sanctioned economy as a potential investment opportunity to the U.S., adding further complexity to the oil market outlook.

Oil prices are trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is at 42, suggesting the commodity might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 64.45, 66.65

Support level: 61.85, 59.65