DBG Markets: Market Report for Dec 04, 2025

ADP Shock Hits Dollar, Bolster Fed Cuts Hope; Metals and Dollar Pairs Eye Breakouts

Yesterdays ADP Employment Change report delivered a sharp negative surprise, sending a strong warning signal from the U.S. labor market.

ADP Shock Hits Dollar

The ADP National Employment Report showed that the U.S. private sector lost 32,000 jobs in November, versus expectations of a 10,000 gain, marking a notable deterioration from the prior month.

· Fed Implications: This contraction undermines the “rate-hold” narrative and reinforces the case for easing. The implied probability of a December Fed rate cut has surged to around 90%, with markets now pricing in a near-certain cut next week to prevent further labor-market deterioration.

· Dollar Outlook: The U.S. Dollar Index faced immediate selling pressure, breaking key support levels and signaling potential further depreciation amid Fed cut expectations.

USD Index, H4 Chart

The Dollar Index earlier formed a double-top near 100.00–100.30, and yesterdays breakdown of the 99.00–99.30 neckline support signals an imminent bearish reversal. Short-term downside momentum is likely, with further losses potentially accelerating if the Fed delivers dovish guidance.

This has opened the door for major currencies to potentially gain bullish momentum against the dollar, as reflected in our earlier analysis of GBP/USD and EUR/USD.

RBA vs Fed: The Hawkish Hold Divergence

Beyond the Pound and Euro, the Australian Dollar shows promising upside against the U.S. Dollar. While the Fed moves toward rate cuts, the Reserve Bank of Australia (RBA) remains a global outlier. The central bank is expected to maintain a restrictive stance at its December 9 meeting, creating a powerful policy divergence that supports AUD.

The ASX RBA Rate Tracker currently implies a 94% probability of a hold at 3.60%, with virtually no pricing for a cut—sharply contrasting with the Feds ~90% cut probability. Money markets are now pricing a “higher-for-longer” scenario into 2026, with some tail-risk bets for a potential hike if inflation remains stubborn above 3.8%.

Outlook: This policy divergence (Fed easing vs. RBA holding) is bullish for AUD/USD, with the pair eyeing a test of its technical breakout.

AUD/USD, Daily Chart

Technically, AUD/USD has been consolidating near 0.6500–0.6600 for a long period of time and forming a converging triangle pattern. With the outlook increasingly unfavourable for the U.S. Dollar and supportive for AUD, a breakout above the triangle and the 0.6600 level could signal a stronger upside move.

Near-Term Outlook: If AUD/USD gains momentum above 0.6600 with a confirmed breakout, further upside is likely in the pair.

USD/CNH: Bearish Grind Continues

The USD/CNH pair remains under pressure, weighed down by broad U.S. Dollar weakness and stable yuan fixings.

USDCNH, Daily

On the daily timeframe, the pair continues to trade within a long-term downtrend channel. The recent break below the 7.100–7.090 support zone reinforces the bearish momentum, opening the path for further downside.

USDCNH, H4 Chart

Outlook: Following the decisive breach of the 7.100–7.090 psychological support, USD/CNH appears set to test the 7.000 level next, with the overall downtrend remaining intact.

Gold: Fed Cuts Fuel the Floor

Gold remains another beneficiary of the "bad news is good news" macro environment.

The ADP contraction confirms the lower-yield environment that Gold thrives in. With the Fed likely forced to cut rates to save jobs, real yields are falling, reducing the opportunity cost of holding Gold.

XAU/USD, H4 Chart

Worth noting: Golds recent upside has stalled near the 4,200–4,240 resistance zone, suggesting much of the anticipated Fed cut may already be priced in. While the technical outlook remains constructive, traders should exercise caution as further gains may require new catalysts.

Technically, selling pressure near 4,200–4,240 must be cleared before a sustained move higher is possible. A decisive break above 4,240 would confirm bullish continuation, while a pullback toward 4,100–4,130 could provide a favorable entry point for long positions.

Todays Key Focus: Initial Jobless Claims

The Initial Jobless Claims report will be closely watched as the next potential market driver ahead of Fridays NFP.

· Consensus: Markets expect a modest rise to ~220,000.

· A spike above 230,000 would validate the ADP contraction.

Following the ADP shock, a higher-than-expected print could reinforce the labor-market weakness, pressuring the U.S. Dollar further and supporting Gold and risk assets.

Conversely, a resilient reading could temper yesterdays moves, allowing the Dollar to stabilize and prompting profit-taking in metals. While not a guaranteed market mover, traders should monitor this release for potential volatility and directional cues.