Investor Read Ahead: Waiting for the NFP Punchline – Why December 4th Is a Classic Mixed Signal Setup

After the huge "Risk On / Anti-Dollar" move that slammed the market yesterday, today was all about taking a deep breath and stabilizing. The entire market is caught in a classic "pre-NFP (Non-Farm Payrolls) holding pattern".

The dominant theme for the session was a tentative rebound in the US Dollar (USD), which tried to recover some ground after being slammed by much weaker-than-expected employment data earlier this week. This dollar stability immediately created a mixed to slightly cautious environment for commodities and put pressure on all the major non-USD currency pairs.

Our job is to look past the intraday noise and apply our systematic method of analysis to identify where the high-probability opportunities lie. When assets are consolidating and waiting, the signals are typically messy. The overall verdict for today is definitive: Mixed Signals. This means we must stay nimble because risk assets are likely caught in a trading range, and the risk for heightened volatility is substantial.

Let’s look at why the key assets are signaling confusion and map out the critical levels we need to watch ahead of Friday’s major jobs report.

Section 1: Hard Assets Halted – The Momentum Fade

When the market provides mixed signals, our method suggests we should explore whether investors prefer hard assets (like gold and energy) over paper assets (like equities, bonds, and currencies). While hard assets showed strong gains recently, today they struggled, confirming the overall lack of direction.

Gold: The Consolidation Trap

Gold (XAU/USD) is stuck in a consolidation phase after its strong recent surge to multi-week highs. While buyers are defending key support, momentum is clearly fading as the USD attempts a recovery and traders await the critical US employment reports.

Technically, Gold’s long-term trend remains Bullish because the price is holding above the longer-term moving averages. However, the short-term direction is rotational, or neutral.

• Indicators Confirm the Pause: The Relative Strength Index (RSI) is easing toward 60, pulling back from recent "overbought" levels. This is a necessary correction, but it clearly indicates that momentum has stalled, making the market vulnerable to a deeper pullback. Similarly, the MACD lines remain crossed in bullish territory, but the histogram bars are shrinking, reflecting the clear loss of immediate upward momentum.

• Key Support Pivot: The critical immediate pivotal support zone is $4,190 - $4,200. Holding this psychological level is vital for immediate bulls. A daily close below the critical defense line of $4,160 would signal a deeper correction, potentially toward $4,100.

• Trading Gold: For the cautious trader, the consolidation offers two ideas: a Buy (Dip Strategy) entry in the $4,190 - $4,200 zone, or a Sell (Correction Continuation) entry if resistance holds between $4,230 - $4,245. Given the mixed environment, small size and tight stops are essential.

Crude Oil: The Range Game

WTI Crude Oil is showing signs of a modest rebound today, bouncing off key support. However, it remains tightly constrained by strong resistance levels and ongoing global supply concerns. The intermediate trend is Neutral/Ranging near the $60 mark.

• Momentum Indicators: Both the RSI and MACD are hugging the neutral centerline, which is typical of a market that is consolidating and awaiting a fundamental catalyst. The price is oscillating around the short-term moving averages, further confirming indecision.

• Key Levels: Strong psychological and technical resistance sits at $60.00, which is also a confluence point with the 50-day moving average. Major support remains down at the 2025 low of $57.00.

Section 2: Forex Momentum Pauses – The USD’s Tentative Rebound

The entire Forex market is defined by the USD’s attempt to stabilize. The major pairs that saw aggressive buying yesterday are now testing immediate resistance, forming potential bearish divergence setups on shorter timeframes. This abrupt halt confirms that the risk-on momentum has stalled, pushing us firmly into a Mixed Signal environment.

EUR/USD – Testing the Breakout Line

The Euro has failed to maintain its breakout above 1.1650 and is pulling back as the USD finds its footing. This pullback is currently testing the short-term uptrend line, suggesting that the immediate bullish momentum is pausing.

• Vulnerable Bullish Bias: The price is still well above the 50-day Simple Moving Average (SMA) at 1.1610, confirming the bullish bias from a long-term perspective. However, the RSI is pulling back from above 70 on the 4-hour chart, indicating that a significant bearish correction is underway. The MACD lines are also high but showing signs of converging, suggesting a near-term reversal or deep consolidation is likely.

• Key Support: Bulls absolutely need to hold the 1.1610 - 1.1630 zone, which is the confluence of the 50-day SMA and the previous breakout point. A break below the major support at 1.1580 would confirm a much deeper correction.

USD/JPY – The Critical 200-DMA Test

The USD/JPY pair is in a high-stakes consolidation following the massive drop yesterday, which tested the major support area around 155.00. Despite that sharp sell-off, the Daily Trend remains Bullish overall, suggesting a potential bounce off the long-term support. The market is also extremely sensitive to any shift in Fed rate cut expectations.

• Critical Level: The price is currently hovering right on the 200-day Moving Average (DMA), making the current level extremely critical for the long-term trend bias.

• Support/Resistance: The critical confluence support zone is 155.00 - 154.50. A decisive break below 154.50 opens a sharp drop to 153.50. Immediate resistance is at 156.00.

The Rest of the Majors

Both the British Pound (GBP/USD) and the Australian Dollar (AUD/USD) are mirroring the technical behavior of the Euro, experiencing consolidation and pulling back from recent highs as the USD stabilizes. Their broader uptrends remain intact only if they hold key support levels, such as 1.3200 for the Pound and 0.6600 for the Aussie.

Final Synthesis and Strategic Outlook

We are currently in a classic waiting game. Yesterday’s strong dovish signal from the employment data has been partially absorbed, allowing the USD to regain some lost ground ahead of Friday's critical US jobs data.

The market is full of contradictions: Gold says "hedge risk," the USD says "maybe I’m not so weak," and all momentum indicators say "stop for a moment." Since momentum has stalled and the directional bias of the Anti-USD trade has paused, the verdict is Mixed Signals.

The Trader Action Plan

1. Stay Nimble and Trade Small: The primary recommendation for a Mixed Signal environment is to stay nimble because risk assets are likely in a trading range, and there is a higher risk for heightened volatility. Traders who are currently long should not look to add, but there isn’t enough information to sell. If you must initiate a position, trade small size.

2. Watch the NFP Catalyst: Friday's US NFP report is the Key Risk and the most likely catalyst for the next major directional move. A strong NFP print would likely reverse the recent USD weakness and trigger a deep correction in Gold and the major forex pairs.

3. Prioritize Defense: Focus on the critical support levels for Gold ($4,190) and EUR/USD (1.1610). A clean break of these levels signals that the correction is turning into something more serious.

4. Trade the Breakdown: A confirmed break below 154.50 in USD/JPY would signal a high-conviction short trade targeting 153.50, despite the daily trend remaining bullish.

We are sitting right at a major pivot point. The best trade for now is often no trade at all, but rather positioning yourself for the volatility that the jobs report will inevitably bring. Watch your stops, and let the data be your guide.