Prepared by: Stephen Ernest
Tuesday, May 6, 2025
The upcoming trading week is dominated by heightened volatility and uncertainty, with major market moves triggered by global trade concerns and tariff announcements. The VIX index has surged to 45.31, indicating significant risk aversion. The U.S. Dollar has shown strength with the DXY up 0.93%, while equity markets have experienced sharp corrections with the NASDAQ already in bear market territory and the S&P 500 at risk of following suit.
Commodity markets have been severely impacted, with WTI crude oil plunging to $62 per barrel, a level not seen since August 2021. Gold remains resilient despite some profit-taking, trading above the $3,000 mark as investors seek safe-haven assets amid the market turbulence.
In the currency space, the Australian Dollar has been one of the worst performers, with AUDUSD trading around 0.60 after substantial losses. The Japanese Yen has shown strength amid the risk-off sentiment, while the Canadian Dollar faces pressure due to concerns about the impact of tariffs on oil prices.
103.02
Previous: 102.07
YTD: -5.04%
45.31
Previous: 30.02
Year Ago: 16.35
$3,118.90
Support: $3,050
Resistance: $3,200
$62.00
4-Year Low
Down from $74 last week
| Currency | Central Bank Policy | Interest Rate | Economic Outlook |
|---|---|---|---|
| USD | Fed indicated more hawkish stance in recent communications | 5.00% | Mixed data with strong labor market but inflation concerns |
| JPY | BoJ maintaining current policy despite recent rate hike | 0.25% | Weak economic growth, concerns about intervention |
| GBP | BoE expected to begin rate cutting cycle in Q2 | 4.00% | Economy showing signs of growth at 1.5% forecast |
| CAD | BoC likely to continue rate cuts | 3.75% | Vulnerable to trade tensions and oil price collapse |
| CHF | SNB remains hawkish on inflation | 1.50% | Safe haven flows supporting the currency |
| AUD | RBA maintaining tight policy | 4.10% | Under pressure from Chinese economic concerns |
| NZD | RBNZ holding rates steady | 5.25% | Weak economic indicators, vulnerable to risk-off sentiment |
| EUR | ECB expected to cut rates in June | 3.50% | Mixed economic data, manufacturing weakness |
| Date | Event | Country | Impact |
|---|---|---|---|
| April 7 | US ISM Services PMI | United States | Medium |
| April 8 | RBA Interest Rate Decision | Australia | High |
| April 9 | Consumer Confidence Index | United States | Medium |
| April 10 | US Consumer Price Index (CPI) | United States | High |
| April 10 | ECB Interest Rate Decision | Eurozone | High |
| April 11 | US Producer Price Index (PPI) | United States | Medium |
| April 11 | UK GDP Monthly Estimate | United Kingdom | Medium |
The announcement of potential new tariffs by the Trump administration has significantly increased market volatility. The plan to impose reciprocal tariffs against trading partners has triggered fears of a global trade war, causing substantial selloffs across equity markets and risk-sensitive currencies.
China's announcement of retaliatory tariffs has further escalated trade tensions. This move has particularly impacted the Australian Dollar and commodities, with the AUD/USD pair plummeting to multi-year lows due to Australia's heavy trade reliance on China.
Market expectations for central bank policies have shifted considerably. The Federal Reserve is now seen as potentially delaying rate cuts due to persistent inflation concerns, while other central banks like the ECB and BoE may need to accelerate their easing cycles to counter economic headwinds from trade tensions.
The latest US jobs report showed a surprisingly strong labor market, causing reassessment of Fed rate cut expectations. This has provided some support for the US Dollar against major peers despite broader market turbulence.
Current Price: 146.90
Current fall from 158.86 is in progress for 61.8% projection of 158.86 to 146.52 from 151.20 at 143.57. Downside momentum is strong with bearish indicators on daily timeframe. The pair has broken below key moving averages and shows potential for further decline.
Support 1
143.57
Support 2
141.02
Resistance 1
146.76
RSI (14)
35
MACD
Bearish
Stochastic
Oversold
Current Price: 193.50
GBP/JPY's steep decline last week indicates that rebound from 187.04 has completed with three waves up to 195.95. Initial bias remains on the downside with strong selling pressure and potential for further decline towards 187.00 area.
Support 1
187.04
Support 2
185.00
Resistance 1
195.95
RSI (14)
38
MACD
Bearish
Stochastic
Neutral
Current Price: 0.6040
AUD/USD has plummeted to multi-year lows amid severe risk-off sentiment and concerns about Chinese economy. The pair broke below key support at 0.6300 with significant momentum and continues to show bearish pressure.
Support 1
0.5985
Support 2
0.5900
Resistance 1
0.6300
RSI (14)
25
MACD
Very Bearish
Stochastic
Oversold
Current Price: $3,118.90
Despite some profit-taking, gold remains in a strong uptrend with support at the psychological $3,000 level. Safe-haven demand and recession fears continue to support the precious metal, with potential for new all-time highs.
Support 1
$3,050
Support 2
$3,000
Resistance 1
$3,200
RSI (14)
65
MACD
Bullish
Stochastic
Neutral
Current Price: $79,250
Bitcoin has shown remarkable resilience despite broader market turbulence. While it experienced some volatility following the tariff announcements, it has held key support levels and remains in its longer-term uptrend, though momentum has slowed.
Support 1
$75,000
Support 2
$70,000
Resistance 1
$83,200
RSI (14)
55
MACD
Neutral
Stochastic
Neutral
Current Price: 5,050
S&P 500 has experienced a sharp correction, down over 17% from recent highs, approaching bear market territory. The index broke below key support levels with high volume, indicating strong selling pressure and potential for further decline.
Support 1
5,000
Support 2
4,800
Resistance 1
5,300
RSI (14)
30
MACD
Bearish
Stochastic
Oversold
Bias: Bullish (70% Confidence)
Current Price: 1.4214
Key Levels: Support: 1.4100, 1.4000 | Resistance: 1.4300, 1.4415
Bias: Bearish (65% Confidence)
Current Price: 0.8607
Key Levels: Support: 0.8550, 0.8500 | Resistance: 0.8650, 0.8700
Bias: Bearish (80% Confidence)
Current Price: 0.5198
Key Levels: Support: 0.5150, 0.5100 | Resistance: 0.5250, 0.5300
Bias: Neutral (55% Confidence)
Current Price: 1.2650
Key Levels: Support: 1.2600, 1.2550 | Resistance: 1.2700, 1.2750
Bias: Bearish (60% Confidence)
Current Price: 1.1101
Key Levels: Support: 1.1050, 1.1000 | Resistance: 1.1150, 1.1200
Bias: Bearish (75% Confidence)
Current Price: 0.5595
Key Levels: Support: 0.5550, 0.5500 | Resistance: 0.5650, 0.5700
Bias: Bullish (65% Confidence)
Current Price: 0.8450
Key Levels: Support: 0.8400, 0.8350 | Resistance: 0.8500, 0.8550
Bias: Bearish (85% Confidence)
Current Price: 0.8596
Key Levels: Support: 0.8550, 0.8500 | Resistance: 0.8650, 0.8700
Bias: Bearish (90% Confidence)
Current Price: 17,353
Key Levels: Support: 17,000, 16,500 | Resistance: 17,500, 18,000
Based on comprehensive analysis combining fundamental, sentiment, and technical factors, the following setups present the highest probability opportunities for the coming week:
| Rank | Asset | Bias | Entry Zone | Stop Loss | Take Profit | Confidence Level | Key Factors |
|---|---|---|---|---|---|---|---|
| 1 | GBP/JPY | Bearish | 193.50-194.00 | 196.00 | 187.00 | 85% | Strong downtrend, risk-off sentiment, BoJ intervention concerns |
| 2 | AUD/USD | Bearish | 0.6050-0.6100 | 0.6150 | 0.5900 | 90% | China tariff impact, technical breakdown, oversold but continued momentum |
| 3 | XAU/USD | Bullish | 3050-3080 | 2980 | 3250 | 80% | Safe haven flows, institutional buying, support at key psychological level |
| 4 | USD/CAD | Bullish | 1.4150-1.4180 | 1.4080 | 1.4350 | 70% | Oil price collapse, USD strength, approaching resistance |
| 5 | AUD/CAD | Bearish | 0.8600-0.8650 | 0.8700 | 0.8450 | 75% | AUD weakness exceeding CAD weakness, technical breakdown |
| Asset | Bias (Bullish/Bearish) | Entry Zone | Stop Loss | Take Profit | Confidence Level (%) | Key Factors |
|---|---|---|---|---|---|---|
| USD/JPY | Bearish | 146.50-146.80 | 147.50 | 143.50 | 75% | Technical breakdown, JPY safe haven status |
| GBP/JPY | Bearish | 193.50-194.00 | 196.00 | 187.00 | 85% | Strong downtrend, risk-off sentiment |
| USD/CAD | Bullish | 1.4150-1.4180 | 1.4080 | 1.4350 | 70% | Oil price collapse, USD strength |
| USD/CHF | Bearish | 0.8620-0.8650 | 0.8700 | 0.8550 | 65% | Safe haven flows to CHF |
| AUD/USD | Bearish | 0.6050-0.6100 | 0.6150 | 0.5900 | 90% | China tariff impact, technical breakdown |
| AUD/CHF | Bearish | 0.5200-0.5230 | 0.5280 | 0.5100 | 80% | Risk-off sentiment, AUD weakness vs CHF strength |
| GBP/USD | Neutral | 1.2630-1.2670 | 1.2580 | 1.2750 | 55% | Mixed signals, range-bound trading likely |
| GBP/CHF | Bearish | 1.1120-1.1150 | 1.1200 | 1.1000 | 60% | Safe haven flows favoring CHF |
| XAU/USD | Bullish | 3050-3080 | 2980 | 3250 | 80% | Safe haven status, institutional buying |
| BTC/USD | Neutral | 79000-80000 | 75000 | 83000 | 60% | Resilience amid market turmoil, consolidation likely |
| NZD/USD | Bearish | 0.5600-0.5630 | 0.5670 | 0.5500 | 75% | Risk-sensitive, tariff concerns |
| EUR/GBP | Bullish | 0.8430-0.8450 | 0.8380 | 0.8550 | 65% | ECB vs BoE policy divergence |
| AUD/CAD | Bearish | 0.8600-0.8650 | 0.8700 | 0.8450 | 85% | AUD weakness exceeding CAD weakness |
| NASDAQ | Bearish | 17300-17500 | 17800 | 16500 | 90% | Bear market confirmation, tariff impact |
| S&P 500 | Bearish | 5050-5150 | 5300 | 4800 | 85% | Near bear market territory, high volatility |
This analysis is for informational purposes only and does not constitute investment advice. Trading in financial markets involves substantial risk and is not suitable for all investors. Past performance is not indicative of future results. The analysis provided reflects the current opinion of the author and is subject to change without notice. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this report. The author may have positions in the markets mentioned.