Head and Shoulders Bottom Pattern Will Continue to Function

Central Bank

Forex

Summary:

The JPYUSD extended its gains for a second consecutive day. Rising inflation data in Japan provides the Bank of Japan (BOJ) with room to potentially resume interest rate hikes.

BUY USDJPY

Close Time

CLOSED

146.193

Entry Price

151.600

142.000

155.092 -0.253 -0.16%

211.0

Pips

Loss

142.000

144.083

Exit Price

146.193

Entry Price

151.600

Fundamentals

The USDJPY retreated below 146.00 on Wednesday, reaching a low of 145.60, a daily decline exceeding 1%. Japan's April PPI rose 4% year-over-year, marking a record high for the eighth consecutive month, potentially paving the way for the BOJ to resume rate hikes, thereby supporting JPY appreciation.

Data released Wednesday indicated that Japan's April PPI increased by 4.0% year-over-year, slightly down from March's 4.3%, aligning with market expectations. Despite the slight deceleration, the index hit a record high of 126.3, continuing its streak of record highs for eight months, highlighting persistent cost pressures in the wholesale sector.

Although the comprehensive tariff measures announced by the U.S. in early April have not yet fully impacted the market, partly due to a 90-day pause, Japan's April import price index in JPY terms saw a significant 7.2% year-over-year decrease, compared to a 2.4% drop in March. This decline suggests that the JPY's appreciation during market volatility has, at least for now, helped Japanese importers mitigate some price shocks.

Despite potential stagnation in underlying inflation and medium- to long-term inflation expectations, BOJ Deputy Governor Shinichi Uchida stated on Tuesday that wage growth is projected to remain robust, driven by a "very tight" Japanese labor market.

He added that companies may continue to "pass on rising labor and transportation costs by raising prices."

Shinichi Uchida also emphasized that the BOJ will assess the economic impact of U.S. trade policies "without any preconceived ideas," acknowledging significant global uncertainty.

This aligns with the previous day's BOJ meeting minutes, which indicated that the "policy path could change at any time." (bullish for the yen)

Head and Shoulders Bottom Pattern Will Continue to Function_1

Technical Analysis

The USDJPY declined for a second consecutive day. The intraday bias is neutral. However, further upside is expected as long as the 143.98 and 142.43 support levels hold, with the head and shoulders bottom pattern in the 4H timeframe still in play.

As previously mentioned, the fall from 158.86 has likely bottomed at 139.87. The target will be 151.60, the 61.8% retracement of 158.86 to 139.87, after the bulls break through 148.64.

Trading Recommendations

Trading Direction: Buy

Entry Price: 145.36, 144.00

Target Price: 151.60

Stop Loss: 142.00

Valid Until: May 29, 2025 23:55:00

Support: 145.36, 144.20, 142.43

Resistance: 148.66, 149.86, 150.75

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Warren Takunda

Economic

Summary:

The British Pound surged toward 1.3350 against the U.S. Dollar in Wednesday trading, driven by weaker-than-expected U.S. inflation figures for April.

BUY GBPUSD

Close Time

CLOSED

1.33398

Entry Price

1.34400

1.32600

1.33406 +0.00094 +0.07%

79.8

Pips

Loss

1.32600

Exit Price

1.33398

Entry Price

1.34400

In a week of pivotal data and political noise, the Pound Sterling extended its rally against the U.S. Dollar on Wednesday, climbing to levels just shy of 1.3350 during the European session. The currency pair built on its Tuesday recovery, driven by a sharp retreat in the Greenback following the release of softer-than-expected U.S. Consumer Price Index (CPI) data for April. The figures have sparked fresh speculation that the Federal Reserve may be forced to consider rate cuts sooner than expected—even as official Fed guidance remains unchanged.

Headline inflation in the U.S. dropped to 2.3% on an annual basis, marking its lowest level since February 2021. This came in below expectations and fueled a broad sell-off in the dollar as traders reassessed the trajectory of Federal Reserve policy. Core inflation, which excludes volatile food and energy components, held steady at 2.8% year-over-year, meeting forecasts, but showed a notable deceleration on a monthly basis at just 0.2%. The monthly print for headline CPI also came in at 0.2%, underlining the perception that disinflation is gradually taking hold across the U.S. economy.

Despite these numbers, immediate expectations for a rate cut at the Fed’s July meeting have barely budged. According to the CME FedWatch Tool, markets continue to assign a 61.4% probability to the Fed holding its benchmark interest rate in the current 4.25%-4.50% range at the next policy meeting. While that figure is largely unchanged from levels seen before the inflation data was released, it marks a sharp rise from just 29.8% a week earlier—when the announcement of a tariff reduction agreement between the U.S. and China helped soothe market concerns about global trade and inflation.

This improvement in U.S.-China relations has complicated the policy outlook. On one hand, falling inflation suggests room for easing; on the other, improved trade prospects support growth, potentially allowing the Fed to maintain a higher-for-longer stance. Nonetheless, political pressures are intensifying, adding another layer of complexity.

Former President Donald Trump, who remains an influential voice in Republican economic circles and a likely contender for the presidency, issued a forceful call for rate cuts. Writing on Truth Social, Trump claimed that inflation was effectively dead and that the Fed had a responsibility to act. "No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!! THE FED must lower the RATE, like Europe and China have done," he posted. Trump also attacked Fed Chair Jerome Powell directly, referring to him as “Too Late Powell” and warning that America is “ready to blossom” if only the central bank would ease policy.

While Trump’s commentary does not dictate Fed policy, it reinforces market expectations that pressure will mount on the central bank to respond more aggressively if inflation continues to trend downward and economic momentum fades. This backdrop has left the dollar vulnerable, and the British Pound has taken full advantage.

Market participants are now turning their focus to the United Kingdom’s preliminary Q1 GDP figures due for release on Thursday. Analysts are watching for signs that the British economy is gaining traction after a sluggish 2023. A strong reading would likely bolster the Pound further, especially as the Bank of England maintains a cautious but hawkish tone amid still-stubborn domestic inflation.

Technical Analysis

On the technical front, GBP/USD has made a decisive breakout above a short-term descending trendline, with recent price action also clearing the 50-period Exponential Moving Average (EMA50). This marks a significant shift in momentum, with bullish signals now confirmed by technical indicators. The Relative Strength Index (RSI) is moving into overbought territory, indicating the possibility of a short-term consolidation or pullback. However, the structure of the move, highlighted by a bullish engulfing candlestick pattern, suggests that any retracements may be limited and present potential re-entry opportunities for trend-following bulls.

The currency pair is now on course to challenge increasingly ambitious resistance levels. Price action has already breached the 1.3340 level during intraday trading, with subsequent targets likely to fall in the 1.3390 and 1.3440 regions. These zones correspond to prior peaks from earlier in the year and could serve as meaningful technical barriers—though a strong GDP print or further U.S. data disappointments could see these levels fall in quick succession.

TRADE RECOMMENDATION

BUY GBPUSD

ENTRY PRICE: 1.3340

STOP LOSS: 1.3260

TAKE PROFIT: 1.3440

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Australian Dollar extended its rally against the US Dollar, nearing the 0.6500 mark, bolstered by stronger-than-expected wage growth and softer US inflation.

BUY AUDUSD

Close Time

CLOSED

0.64600

Entry Price

0.66000

0.63700

0.66436 +0.00053 +0.08%

48.3

Pips

Profit

0.63700

0.65083

Exit Price

0.64600

Entry Price

0.66000

The Australian Dollar continued its winning streak for a second consecutive session on Wednesday, gaining nearly 2% for the week against the Greenback, as upbeat domestic wage data and renewed pressure on the US Dollar buoyed sentiment around the AUD. The AUD/USD pair edged closer to the psychologically significant 0.6500 level, a threshold that traders are now eyeing as a key resistance area, amid broad-based weakness in the USD and changing central bank expectations on both sides of the Pacific.

The latest upside in the Aussie Dollar comes on the back of a combination of domestic economic resilience and external dovish signals from the United States. Australian wage growth surprised to the upside in the first quarter, with the Wage Price Index rising 3.4% year-on-year, outpacing the market consensus of 3.2%. On a quarterly basis, wages accelerated to 0.9%, compared to 0.7% in the prior quarter, and above the expected 0.8%. This data reinforces the narrative that Australia’s labor market remains tight, despite signs of a broader economic slowdown.

This stronger wage growth could typically argue against near-term monetary easing by the Reserve Bank of Australia (RBA). However, markets continue to price in a rate cut at the upcoming RBA meeting on May 20. According to the ASX RBA Rate Indicator, there is now a 54% implied probability of a 50-basis-point rate cut—from the current cash rate of 4.10% down to 3.60%—suggesting that investors expect the central bank to act decisively in response to fragile growth dynamics and soft consumer demand.

Despite the robust wage print, the RBA remains in a difficult position. Inflation has come down materially from its peak, and growth indicators have been mixed. Housing markets are stabilizing, but consumer spending remains under pressure. While the labor market continues to post positive metrics, the RBA may feel compelled to ease policy to prevent a deeper slowdown, especially as global headwinds mount.

Meanwhile, the US Dollar Index (DXY) slipped below the 100.00 level, hitting a fresh multi-month low following Tuesday’s release of softer-than-expected Consumer Price Index (CPI) data. The inflation print reinforced expectations that the Federal Reserve may soon shift its stance toward policy easing, possibly as early as September, despite ongoing caution in official rhetoric. Headline CPI rose just 0.3% in April, slightly below forecasts, while core inflation showed similar moderation.

Although the Fed has maintained a steady hand and continues to emphasize data dependency, the markets are increasingly leaning toward the idea of a pivot. According to CME’s FedWatch Tool, the probability of a rate cut by September now stands above 70%, as traders bet that disinflation trends will continue and that the Fed will eventually act to prevent an economic contraction.

This potential divergence in central bank policy—between a cautious Fed and a potentially proactive RBA—has added an interesting dimension to AUD/USD dynamics. While Australia’s near-term outlook remains clouded by a possible rate cut, the medium-term trajectory for the US Dollar looks vulnerable if the Fed indeed begins to unwind its tight policy stance.

On the data front, Wednesday is relatively quiet for both countries, though traders will be keeping an ear on comments from Fed Vice Chair Philip Jefferson and San Francisco Fed President Mary Daly. Any remarks hinting at a shift in the Fed’s tone could inject fresh volatility into the currency pair.

Looking ahead, Thursday will bring a fresh batch of macroeconomic data that could further shape the AUD/USD path. Australia’s April employment report is due, and any signs of labor market cooling could reinforce RBA cut bets. Simultaneously, the US will release key prints on Producer Prices, Retail Sales, and Initial Jobless Claims—each carrying potential to move the USD.

Technical Analysis

From a technical standpoint, AUD/USD broke and closed above a key horizontal resistance level on Tuesday, suggesting a near-term shift in momentum. The pair is now retesting this breakout area, forming a small ascending triangle pattern on the hourly chart—a structure often associated with bullish continuation.

Moreover, the Relative Strength Index (RSI) is signaling positive momentum, and the price is comfortably trading above its 50-period moving average. A clear breakout above 0.6500 could open the door toward the next major resistance near 0.6600. This level not only marks a psychological barrier but also coincides with a previous swing high.

In contrast, failure to maintain traction above 0.6500 could prompt some consolidation, with initial support resting at 0.6440, followed by a stronger floor near 0.6390.

TRADE RECOMMENDATION

BUY AUDUSD

ENTRY PRICE: 0.6460

STOP LOSS: 0.6370

TAKE PROFIT: 0.6600

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

While gold's safe-haven appeal has diminished, the fundamental, long-term rationale for holding gold remains intact.

SELL XAUUSD

Close Time

CLOSED

3280.00

Entry Price

3090.00

3350.00

4211.21 +13.30 +0.32%

700.0

Pips

Loss

3090.00

3350.00

Exit Price

3280.00

Entry Price

3350.00

Fundamentals

Yesterday, the U.S. reported that the April CPI rose 2.3% year-over-year, below the market expectation of 2.4%, core CPI rose 2.8% year-over-year. Despite inflation cooling for the third consecutive month, Federal Reserve officials continue to emphasize the need for "sticky inflation to maintain high interest rates." Market expectations for a June rate cut have significantly decreased to 68%, with a total of only 51 basis points of rate cuts expected for the year. The U.S. Dollar Index stabilized above the 100 threshold, while the 10-year Treasury yield held steady at 4.47%. The real interest rate (nominal interest rate minus inflation) rose to -2.26%, significantly increasing the opportunity cost of holding gold.

Subsequently, in the tariff adjustment agreement that took effect today between China and the U.S., the U.S. removed 91% of the additional tariffs on Chinese goods and suspended 24% of the reciprocal tariffs for 90 days. China simultaneously removed 91% of its retaliatory tariffs and suspended 24% of its retaliatory measures. This agreement substantially eased pressure on the global supply chain, leading to a shift in market risk appetite towards risk assets such as stocks. Gold ETFs saw a single-day outflow of 1.2%, reflecting the accelerated withdrawal of safe-haven funds.

Furthermore, the easing of expectations for Russian-Ukrainian peace talks and the implementation of the India-Pakistan ceasefire agreement have mitigated market concerns regarding escalation, with the marginal easing of geopolitical risks further diminishing the safe-haven premium of gold.

However, the medium- to long-term support logic for gold has not been entirely dismantled. Continuous gold purchases by global central banks (net increase of 244 tons in the first quarter of 2025) and the credit risk of the U.S. dollar (U.S. debt exceeding US$36 trillion) still provide structural support for gold. The People's Bank of China has increased its gold holdings for six consecutive months, reflecting the deepening of the "de-dollarization" strategy, while the U.S. government's debt ceiling crisis continues to challenge the credit of the U.S. dollar, which may reactivate the safe-haven demand for gold during repeated trade negotiations.

Technical Analysis

Pullback Has Not Concluded, and the Bullish Trend Remains Intact_1

In the 4H timeframe, the current candlestick patterns for gold are exhibiting a high-level consolidation phase. The price has retested the 3200 level twice without a breakdown, indicating a degree of support, which suggests a potential for an upward rebound. However, the recent breach of the MA144 by the candlesticks increases the likelihood of a short-term bearish trend.

Currently, gold is supported at the 3200 level and may experience a short-term rally to test the 3290 resistance level. If bearish signals emerge at this resistance, gold could retest the 3200 support. A break below 3200 would likely open further downside potential, with the initial target at 3170, and potentially extending to 3083.

Trading Recommendations

Trading Direction: Sell

Entry Price: 3280.00

Target Price: 3090.00

Stop Loss: 3350.00

Valid Until: May 28, 2025 23:00:00

Support: 3200.00, 3083.93

Resistance: 3265.39, 3291.17

Risk Warnings and Disclaimers

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Manuel

Economic

Central Bank

Summary:

A successful retest of the broken trendline from above could act as a launchpad for renewed bullish momentum toward the next resistance zone.

BUY EURCHF

Close Time

CLOSED

0.93650

Entry Price

0.94900

0.92900

0.93628 -0.00034 -0.04%

45.9

Pips

Loss

0.92900

0.93191

Exit Price

0.93650

Entry Price

0.94900

Several European Central Bank (ECB) officials stated on Tuesday that the institution's strategic review will largely validate its past policy decisions, including quantitative easing (QE), despite ongoing criticism from some policymakers. The officials also emphasized that the ECB will retain its commitment to "decisive action" during periods of low inflation and interest rates following the review.

Gabriel Makhlouf, a member of the ECB Governing Council and Governor of the Central Bank of Ireland, highlighted that rising uncertainty is weighing on investment across the euro area. He noted that recent soft data point to a significant cooling in both business and consumer sentiment, suggesting growing fragility in the region’s economic outlook.

However, brighter news came from Germany’s ZEW Economic Sentiment Index, which surged to 25.2 in May from -14 in April—well above the market consensus of 11.9. Likewise, the Eurozone ZEW Index jumped to 11.6 from -18.5, indicating renewed optimism among financial market experts despite persistent macroeconomic headwinds.

On the trade front, the European Union and Canada remain the only major economies that have not reported any meaningful progress in trade talks with the United States since President Donald Trump’s announcement of reciprocal tariffs. In a proactive move, the EU has prepared a set of retaliatory measures should the negotiations end without a satisfactory outcome. On Thursday, the European Commission released a public consultation paper detailing potential countermeasures on up to €95 billion worth of U.S. imports—an escalation that could reignite trade tensions between the two economies.

Meanwhile, easing trade concerns globally has triggered a shift toward riskier assets, which has weighed on traditional safe havens such as the Swiss franc (CHF). At the same time, Swiss 10-year government bond yields rose toward 0.37%, tracking the global increase in borrowing costs as investor risk appetite improved.

However, gains in Swiss yields remain capped by growing expectations of further monetary easing from the Swiss National Bank (SNB). Last week, SNB Chairman Thomas Schlegel reaffirmed the central bank’s readiness to intervene in currency markets and implement deeper rate cuts, possibly pushing rates further into negative territory if inflation remains subdued below the bank’s target. Bullish Momentum May Continue Following Breakout_1

Bullish Momentum May Continue Following Breakout_1

Technical Analysis

The EUR/CHF pair has broken out to the upside from an ascending triangle formation, rallying from the support of the 100- and 200-period moving averages at 0.9362 and 0.9372. The pair closed decisively above both moving averages, which could indicate the beginning of a sustained bullish phase. If this breakout is followed by a solid bullish crossover of the moving averages, momentum could carry the pair toward the next key resistance near the 0.9500 level.

That said, if price pulls back and breaks below the ascending trendline, the bullish setup could be invalidated, opening the door for deeper losses. Currently, the RSI stands at 57, indicating that the pair is not in overbought territory, leaving room for further upside. A successful retest of the broken trendline from above could act as a launchpad for renewed bullish momentum toward the next resistance zone.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9365

Target price: 0.9490

Stop loss: 0.9290

Validity: May 23, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Cryptocurrency

Summary:

The cryptocurrency market experienced a sharp downturn in the last 24 hours, with Bitcoin breaching the US$102,000 level, resulting in over US$730 million in liquidations. Of these, 73% were long positions, indicating excessive bullish sentiment among traders.

BUY BTC-USDT

Close Time

CLOSED

102547.8

Entry Price

106500.0

99500.0

91425.0 +1870.2 +2.09%

3952.2

Pips

Profit

99500.0

106513.5

Exit Price

102547.8

Entry Price

106500.0

Fundamentals

Bitcoin experienced a brief dip below US$101,000 this week before recovering to approximately US$103,560, representing a daily fluctuation of about 2.6%. The cryptocurrency continues to consolidate within a US$100,000-US$105,000 range in the short term.

Market analysis indicates Bitcoin's decline below US$103,000 amid heightened liquidations, while whale activity remained subdued. This suggests the price correction aimed to flush out over-leveraged long positions.

Liquidation data reveals significant volatility among highly leveraged positions. Over the past few hours, various crypto exchanges saw liquidations totaling US$730 million. Of these, 93.44% were long positions. Bybit led in liquidations, with US$49.71 million, followed by Binance at US$26.72 million.

Despite market volatility, overall sentiment remains cautiously optimistic. Notably, whale behavior appears stable, with no significant sell-offs of long positions. Furthermore, substantial buying interest persists on the order books. Consequently, some market observers view the current pullback as a consolidation phase rather than the start of a broader downtrend.

The Fear & Greed Index currently registers around 70, indicating "Greed," suggesting bullish sentiment but cautioning against potential corrections.

Additionally, the BlackRock Bitcoin ETF has recorded consecutive days of net inflows, accumulating US$356 million, signaling robust institutional demand. Meanwhile, on-chain data reveals that whale-tier addresses (holding 10–10,000 BTC) have net-added approximately 83,000 BTC over the past 30 days, indicating continued accumulation by large holders.

Maintain a Cautiously Bullish Outlook, Focusing on Recent Range-Bound Trading_1

Technical Analysis

Bitcoin faced resistance near US$107,000 on Sunday, followed by a 2% decline the next day. As of Tuesday, Bitcoin is trading around US$103,500.

Momentum indicators suggest waning bullish strength, though further upside remains possible. The Relative Strength Index (RSI) in the 1D timeframe is at 67, trending downward after failing to breach the overbought threshold of 70, indicating weakening bullish momentum. A continued decline in the RSI, breaking below the neutral 50 level, could trigger a significant Bitcoin price correction, potentially retesting the US$100,000 psychological support.

However, a Bitcoin price recovery, with a close above the US$105,700 resistance level, could pave the way for a rally towards the all-time high of US$109,588, established on January 20.

Trading Recommendations

Trading Direction: Buy

Entry Price: 102550

Target Price: 106500

Stop Loss: 99500

Valid Until: May 28, 2025 23:55:00

Support: 103162, 100776, 99126

Resistance: 105022, 105689, 106496

Risk Warnings and Disclaimers

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Eva Chen

Cryptocurrency

Summary:

The recent Pectra upgrade has enhanced transaction efficiency and scalability, yet it hasn't immediately impacted prices. Meanwhile, institutional ETH ETF applications and continued accumulation by whale addresses offer mid- to long-term support.

BUY ETH-USDT

Close Time

CLOSED

2591.40

Entry Price

2785.00

2270.00

3133.93 +106.97 +3.53%

529.9

Pips

Profit

2270.00

2644.39

Exit Price

2591.40

Entry Price

2785.00

Fundamentals

Ethereum's price surged last week, fueled by increased inflows into staking protocols. This buying pressure drove ETH to its largest weekly gain since December 2020, reaching 40%.

The recent Pectra upgrade, the most significant update since the 2022 Merge, encompasses 11 improvement proposals, primarily enhancing transaction speeds and reducing costs. It also expands the single-node staking limit from 32 ETH to 2048 ETH, potentially attracting larger stakers.

The global crypto market sentiment, as measured by the Fear & Greed Index, currently indicates moderate "greed," suggesting potential short-term buying interest. Meanwhile, a divergence exists between retail and institutional investors, with institutions primarily hedging their positions through spot and futures markets.

Technical Analysis

Ethereum surged 40% last week, climbing from US$1,800 to approximately US$2,627, marking its largest weekly gain since December 2020. Following three consecutive days of gains, the second-largest cryptocurrency faced rejection near its 200-day SMA, with bears targeting the US$2,867 resistance level.

Currently trading around US$2,485, Ethereum is consolidating within a range established since the beginning of the year. The 4-hour technical analysis reveals a symmetrical triangle pattern, with a breakout above US$2,867 potentially signaling further upside. The Relative Strength Index and Stochastic Oscillator are in overbought territory, indicating strengthening bullish momentum.

Conversely, a breach below the US$2,275 short-term support level warrants caution for a potential correction. A break below the US$2,110 range would invalidate the bullish structure, potentially leading to a decline towards the 50-day SMA support.

Overall, it is recommended to accumulate positions near key support levels, with close attention to the breakout levels at US$2,867 and US$3,000.