USD Rockets 2% Above 200-DMA as Fed Rate-Cut Odds Collapse – Key Market Alert

The USD extended its bullish momentum on Wednesday, climbing above the 200-day moving average (DMA) as expectations of a December Federal Reserve (Fed) rate cut sharply declined. Following the release of the October FOMC meeting minutes, market participants reduced their odds of a 25bps cut from over 40% to just 27%, signaling a clear shift in market sentiment.

This technical breakout reflects growing demand for the USD as a safe-haven currency amid mixed labor-market data and robust equity performance. Nvidia’s blockbuster Q3 revenue report has contributed to risk-on optimism while the USD remained resilient, highlighting that macroeconomic fundamentals are currently the primary driver of currency flows.

FOMC Minutes Signal High Bar for December Rate Cuts

The October 28–29 FOMC meeting minutes revealed that while several participants viewed a December rate cut as potentially appropriate, a larger number of officials advocated maintaining the current policy rate through the end of the year. Officials cautioned that premature easing could entrench inflation expectations or signal a reduced commitment to the Fed’s 2% target.

The hawkish tone has strengthened the USD, providing a fundamental foundation to support its technical breakout above the 200-DMA. Investors are now positioning for a scenario where the Fed keeps rates steady, which has bolstered demand for the Dollar across global markets.

Employment Data Gap Elevates September NFP Importance

The US Bureau of Labor Statistics (BLS) confirmed that the October Nonfarm Payrolls (NFP) report has been canceled and the November print postponed to December 16, after the Fed’s December 10 policy decision. This elevates the importance of the September NFP and the October JOLTS report, which now serve as the key indicators for guiding the Fed’s upcoming decisions.

September NFP Market Expectations

Labor-market signals are mixed. ADP private employment declined by 29k, while Revelio Labs total employment increased by 33k. A weaker-than-expected NFP print could trigger a USD pullback and weigh on short-term Treasury yields. Conversely, strong job gains would reinforce the USD’s breakout above the 200-DMA and support further bullish momentum.

Major Forex Pairs Reflect USD Strength

The USD has outperformed most major currencies this week, reflecting both strong fundamentals and technical alignment:

The breakout above the 200-DMA now acts as a critical support level, signaling potential for further USD appreciation if upcoming economic data aligns with expectations. Traders are closely monitoring technical levels to determine whether the current trend will continue.

Gold and Market Risk Sentiment

XAU/USD (Gold) briefly surged above $4,100 early Wednesday before reversing as the USD’s strength pressured the non-yielding metal. Gold now trades near $4,050, highlighting the inverse relationship between the Dollar and precious metals.

Equity markets have also demonstrated resilience, buoyed by Nvidia’s strong earnings. Despite the positive risk sentiment, the USD remains strong, confirming that macroeconomic fundamentals and Fed policy expectations are the main drivers of currency movements in the near term.

USD Outlook: Key Catalysts Ahead

Traders are closely watching two major upcoming events:

  1. September Nonfarm Payrolls (NFP) – due today
  2. October JOLTS report – December 9

A strong NFP report could reinforce the USD’s breakout above the 200-DMA, while weaker-than-expected employment data may trigger a corrective pullback. Technical support now aligns with the 200-DMA, while resistance near previous weekly highs provides a target for bullish traders.

With the combination of solid USD technicals, hawkish Fed signals, and mixed labor-market data, near-term volatility is expected to remain elevated, making the USD a key focus for forex traders and global markets alike.

Gold Price Forecast: XAU/USD Nears $4,100 as Traders Await FOMC Minutes and NFP Data

Gold prices continued to advance on Wednesday, extending the previous day’s recovery and moving closer to the $4,100 level. The precious metal rebounded strongly after dipping below the $4,000 psychological mark, its lowest point in nearly two weeks. With safe-haven demand rising and the US Dollar losing some momentum, traders are closely watching whether XAU/USD can secure a sustained break above the $4,100 resistance zone.

The upcoming release of the Federal Reserve’s FOMC minutes is expected to provide fresh direction for the gold market, making it a key focus for traders this week.

Gold Supported by Safe-Haven Flows and Softer US Dollar

Lingering concerns over the US economy, amplified by the prolonged government shutdown, have pressured market sentiment and boosted demand for safe-haven assets like Gold. At the same time, the USD has struggled to extend last week’s gains, allowing XAU/USD to regain ground.

Geopolitical tensions continue to support the gold price today. Ukraine confirmed the use of US-supplied ATACMS missiles in strikes on Russian military targets, while President Volodymyr Zelenskiy prepares to travel to Turkey to revive stalled peace discussions. The Kremlin has stated that Russia will not participate, keeping geopolitical risks elevated and maintaining interest in precious metals.

Fed Policy Expectations in Focus as Key Data Approaches

The US Dollar remains near a one-week high but lacks strong bullish momentum as markets weigh mixed signals from Federal Reserve officials:

Recent labor data shows a softening employment landscape, with continuing jobless claims rising to 1.957 million for the week ending October 18. This reinforces expectations that the Federal Reserve may remain flexible with its rate-cut path.

Traders now shift their attention to:

Both releases are likely to influence the US Dollar and provide clearer direction for Gold and XAU/USD.

XAU/USD Technical Analysis: Can Gold Break Above $4,100?

Gold’s recovery gained strength after finding support at the 200-period EMA on the 4-hour chart. While the rebound is encouraging for bulls, mixed technical indicators suggest caution until a sustained breakout occurs.

Key Levels to Watch

Resistance Levels

Support Levels

A decisive move above $4,100 could shift market sentiment firmly in favor of bulls, while a failure to hold above $4,000 may increase the risk of a deeper pullback.

Conclusion: Gold Traders Await Key Catalysts

The push of Gold toward $4,100 reflects a combination of safe-haven demand, USD weakness, and uncertainty around the Federal Reserve’s monetary policy. With the FOMC minutes and NFP report set to shape market sentiment, traders should expect heightened volatility in XAU/USD and the gold market in the near term.