U.S. Jobs Data Shock Raises Concerns: New Market Trend Or Short-Term Volatility?

It was a very volatile week for financial markets. Things started off strong with a trade deal between the U.S. and Europe, but confidence dropped quickly after President Trump announced new global tariffs on August 1. Canada will now face a 35% tariff, up from 25%, and other countries could see tariffs as high as 41% starting August 7 unless new deals are made. This hurt investor sentiment and caused stock markets in Asia and Europe to fall.

The U.S. Federal Reserve decided to keep interest rates unchanged. Fed Chair Jerome Powell said they need more data before making any changes. The U.S. dollar rose earlier in the week thanks to strong GDP data. In Japan, the Bank of Japan also kept rates steady and raised its inflation outlook, but didn’t signal any rate hikes, which caused the yen to weaken. President Trump continued to pressure the Fed to lower interest rates.

On Friday, markets were shaken by much worse-than-expected U.S. jobs data. Fewer jobs were added than expected, and past numbers were revised lower. This increased chances of a Fed rate cut in September. The U.S. dollar dropped sharply, while gold jumped higher. Stocks, oil, and Bitcoin all fell, as investors grew more worried about global trade tensions and a slowing economy.

Markets This Week

U.S. Stocks

The Dow Jones fell every day last week after starting with a key reversal pattern—making a new high but closing lower on Monday. What began as normal profit-taking turned into heavier selling on Friday due to weaker-than-expected U.S. employment data and the announcement of new tariffs on multiple countries as trade talks continued. The drop appears slightly oversold in the short term, but the full impact of the jobs report and trade tensions is still uncertain. Volatility is likely to remain high this week, creating range-trading opportunities. Medium-term traders should be cautious about buying at current levels and may want to wait for further weakness or consider selling into any short-term rebound. Resistance levels are at 44,000, 44,500, and 45,000, while support lies at 43,000, 42,000, and 41,750.

Japanese Stocks

The Nikkei 225 gave up all of its gains from the July 23 U.S.–Japan trade deal last week, falling back to the key 40,000円 level. Although the Bank of Japan maintained a cautious stance on raising interest rates—causing the yen to weaken—the sharp drop in USD/JPY and U.S. equities on Friday pushed the Nikkei lower into the weekend. Despite the decline, the 10-day moving average remains in a bullish trend, and as long as the yen doesn’t strengthen further, a rebound this week is likely. Resistance is seen at 41,000円 and 42,000円, while support lies at 40,000円, 39,200円, and 39,000円.

USD/JPY

USD/JPY surged above 150 last week, raising concerns within the Japanese government as strong U.S. economic data and cautious comments from Fed Chair Powell on cutting rates supported the dollar. At the same time, the Bank of Japan signaled it still needs more time before raising rates, adding to the upward pressure. However, all gains were wiped out after much weaker-than-expected U.S. employment data triggered steady selling into the weekend. It’s unclear if this weak trend in U.S. data will continue, but with few major releases scheduled this week, USD/JPY is likely to trade sideways in a broad range. There is a risk of another sharp sell-off if negative headlines emerge around U.S. trade talks. Resistance is seen at 148, 149, and 150, while support lies at 147, 146, and 145.

Gold

Gold spent most of last week under pressure, testing the lower end of its recent range as a stronger U.S. dollar triggered steady selling. However, much weaker-than-expected U.S. employment data reversed the dollar’s strength and sparked heavy gold buying, pushing prices higher by the end of the week. Renewed trade tensions also supported demand for safe-haven assets, bringing buyers back into the market. While gold remains well supported on dips and trade risks are a positive factor, the short-term outlook is slightly overbought, suggesting some consolidation may occur. Resistance is at $3,400 and $3,450, with support at $3,300 and $3,250.

Crude Oil

Crude oil briefly moved above the $70 resistance level midweek after stronger-than-expected U.S. GDP data boosted expectations for oil demand. However, sentiment quickly shifted as President Trump announced increased tariffs on Canada and other countries, and weaker U.S. employment data triggered aggressive selling, pushing prices back toward the middle of the recent range. Ongoing tariff concerns may limit further upside, and with strong support holding around $65, range trading remains the most effective strategy for now. Resistance is seen at $70, $75, and $80, while support continues to hold at $65 and $60.

Bitcoin

Bitcoin dropped every day over the past five days, making it the worst 5-day stretch since June. Ongoing debate in the U.S. government about how to regulate crypto has created uncertainty, causing big investors to pull back. The Federal Reserve delaying interest rate cuts also hurt Bitcoin, since it tends to do better when rates are expected to fall. Selling picked up after President Trump announced new tariffs and weak U.S. jobs data added to market worries. In the short term, prices may fall further, but the market looks oversold, so short-term traders might find chances to buy if prices start to bounce. Medium-term investors may want to wait until there’s more clarity on U.S. trade policy and the economy. Resistance is at $120,000, $125,000, and $150,000, with support at $112,000, $110,000, and $105,000.

This Week’s Focus

This week could bring more sharp market moves, even though the economic calendar is relatively light. The main scheduled event is the Bank of England meeting on Thursday, where a 0.25% rate cut is widely expected. PMI data from several major economies will also be released, offering clues about global growth. But the bigger focus will be on how markets react to last Friday’s sell-off—whether it signals the beginning of a new trend or was just a short-term move.

U.S. trade policy is likely to dominate sentiment, with President Trump continuing to pressure other countries to negotiate on his terms. Traders will be watching closely for any new headlines or developments on tariffs and trade deals. With uncertainty high and momentum shifting, this could be a volatile week as bulls and bears compete to set the next direction

Source: ACTIONFOREX