CAD/CHF Recovers as BoC Holds Rate, SNB Tweaks Cut, Crude Oil Falls Deeply

Forex

Summary:

CAD/CHF traded around 0.5996 after falling from 0.6010 on May 6, when the Bank of Canada's decision to keep interest rates on hold at 2.75 percent dented the Canadian dollar's recent strength.

BUY CADCHF

Close Time

CLOSED

0.59900

Entry Price

0.60500

0.59500

0.58322 +0.00115 +0.20%

40.0

Pips

Loss

0.59500

0.59499

Exit Price

0.59900

Entry Price

0.60500

Overview

CAD/CHF opened at around 0.5981 this morning and quickly recovered to 0.5996 as the market digested the BoC's rate-keeping. Data showed CAD hitting CHF 0.59960 on 06/05/2025, up from a session low of CHF 0.59517. The BoC's cautious stance on global trade policy pressures and its unchanged interest rate helped stabilize the CAD temporarily.

In parallel, the SNB has maintained a dovish policy to curb inflation, with negative policy rates, allowing the CHF to maintain strength but lack momentum to break out.

Market psychology

Investors are balancing expectations for the FOMC minutes and US CPI data, which could influence the direction of the USD and indirectly shape the strength of CAD/CHF. Risk-off sentiment remains mildly present after crude oil fell more than 5%, dampening sentiment in commodity currencies like CAD. The VIX anxiety index remains elevated, reflecting geopolitical concerns and global trade relations, but the opportunity for carry trade in CAD remains intact thanks to higher interest rates compared to CHF. In addition, the Canadian economic outlook remains relatively bright with strong growth through 2024 but is being impacted by trade tensions with the US.

Technical analysis

CAD/CHF Recovers as BoC Holds Rate, SNB Hints at Cut, Crude Oil Falls Deep_1

On the M15 chart, Bollinger Bands (20,0,2) are constricting around the 0.5980–0.6000 zone, signaling low volatility and preparing for a new uptrend when the price touches the lower boundary. Ichimoku shows Tenkan-sen approaching Kijun-sen from below, while the price has held above the Kumo cloud, confirming the short-term uptrend signal. Stochastic (5,3,3) is oscillating in the oversold zone with a positive divergence, implying that buying pressure may explode when the indicator leaves this zone. Trading volume on M15 also recorded a slight increase in recent green candles, reinforcing the recovery momentum of CAD/CHF.

Trading Recommendations

Entry: BUY 0.599

TP: 0.6050

SL: 0.5950

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Adam

Forex

Summary:

On 07/05/2025, M15 chart shows EUR/USD is trading around 1.1365, continuing to face bearish pressure after breaking the 1.1380 support zone in the Asian session, as Bollinger Bands (20,0,2) expand downwards, indicating increased volatility and a strengthening short-term downtrend....

SELL EURUSD

EXP

EXPIRED

1.33600

Entry Price

1.30000

1.40000

1.16490 +0.00064 +0.05%

Pips

EXPIRED

1.30000

1.12246

Exit Price

1.33600

Entry Price

1.40000

Overview

M15 session on the morning of May 7, EUR/USD opened at 1.1370 and quickly retreated to 1.1365 as selling pressure increased right from the start of the Asian session. Eurozone Q1 GDP data showed 0.4% growth, exceeding expectations, but concerns about US-EU trade tensions and persistent inflation forced the ECB to act cautiously.At the same time, the possibility of a slowdown in macro growth and forecasts of only a slight decrease in inflation have pushed investors to lean towards the USD, especially ahead of the announcement of the US CPI in April, expected to be the lowest in six months.

Market psychology

Market sentiment remains cautious as the VIX remains elevated, reflecting concerns about geopolitical risks and global trade policy. FedWatch data shows that the market is less likely to expect the Fed to raise rates further at its May meeting, instead waiting for further signals from CPI. Meanwhile, the ECB, although cutting rates, acknowledged that core inflation remains high, making it difficult for the euro to strengthen and giving the USD an advantage in the short term.

Technical analysis

On M15, Bollinger Bands (20,0,2) are expanding strongly with prices touching the lower border, signaling widespread selling pressure. Ichimoku shows Tenkan-sen below Kijun-sen, prices penetrate below Kumo cloud, confirming the downtrend. Stochastic (5,3,3) is oscillating in the overbought zone and is showing signs of negative divergence, indicating the possibility of prices continuing to correct downwards. Trading volume for M15 session also recorded a higher volume of red candles than green candles, reinforcing selling pressure.

Trading Recommendations

Entry: SELL 1.336

TP: 1,300

SL: 1.400

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

GBP/JPY traded around 190.55, supported by expectations that the Bank of England (BoE) will cut interest rates at its upcoming meeting, while the Bank of Japan (BoJ) kept rates unchanged at 0.50% and cut its growth forecast, weakening the yen...

BUY GBPJPY

Close Time

CLOSED

190.600

Entry Price

191.000

190.300

207.151 +0.051 +0.02%

30.0

Pips

Loss

190.300

190.299

Exit Price

190.600

Entry Price

191.000

Overview

In the morning session of M15 on May 7, GBP/JPY opened at 191.10 and quickly corrected to 190.99 as the market priced in the possibility of the BoE cutting interest rates by 25 basis points to 4.25% to respond to slowing growth due to global trade tensions..

In contrast, the BoJ kept its benchmark interest rate unchanged at 0.50% at its late April meeting and lowered its growth forecast, creating a favorable environment for the yen to remain under pressure. The BoE’s two-minute delay in its bulletin to commemorate the 80th anniversary of Victory in Europe did not change expectations for a rate cut, while Japan’s economic data remained weak.

Market psychology

Market sentiment is now tilted toward higher yields, with major banks predicting the BoE will proactively ease policy to stimulate growth, while the BoJ remains cautious. The VIX fear index remains elevated, suggesting investors remain cautious about geopolitical and trade risks. Furthermore, stronger-than-expected UK GDP and jobs data reinforce expectations that the pound will continue to favor the yen.

Technical analysis

Buying pressure could emerge as investors seek higher yields from the pound_1

On the M15 chart, the Bollinger Bands (20,0,2) are slightly expanding as the price moves along the upper border, indicating a return to bullish momentum. Ichimoku with Tenkan-sen is above Kijun-sen and the price has broken out of the Kumo cloud to the upside, confirming a short-term bullish signal. The Stochastic indicator (5,3,3) is leaving the oversold zone and is pointing up, signaling a return of buying momentum.

Trading Recommendations

Entry: BUY 190.6

City: 191

SL: 190.3

Risk Warnings and Disclaimers

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Adam

Commodity

Summary:

On May 7, 2025, in the M15 frame, the gold price (XAU/USD) is around 3,420 USD/oz and is under slight downward pressure after a strong increase in the previous session, when the Bollinger band (20,0,2) shows signs of narrowing downwards, signaling a narrowing of volatility and preparation for a short-term trend reversal...

SELL XAUUSD

Close Time

CLOSED

3410.00

Entry Price

3380.00

3420.00

4211.51 +13.60 +0.32%

300.0

Pips

Profit

3380.00

3379.99

Exit Price

3410.00

Entry Price

3420.00

Overview

On the morning of May 7, gold opened M15 at around $3,415/oz and quickly retreated to $3,414 as selling pressure increased after the previous session's safe-haven rally. The market is currently correcting after recording a 2.4% increase on May 6, when prices peaked at $3,413.29/oz amid geopolitical tensions and safe-haven sentiment. Short-term volatility is being closely watched ahead of this afternoon's FOMC meeting, where the Fed is expected to keep interest rates unchanged but signal caution about the prospect of interest rate cuts.

Market psychology

Investors are currently taking a cautious approach, with money flowing out of risky assets to lock in profits after gold’s big rally in the previous session, while awaiting monetary policy information from the Fed. Market sentiment indicators such as the VIX remain high, reflecting concerns about global trade developments and geopolitical risks, thereby supporting lower gold short positions. In addition, the spillover effect from the US dollar’s decline is also gradually weakening, reducing gold’s “safe haven” upside momentum in the short term.

Technical analysis

Selling pressure is now being driven by safe-haven flows taking profits after prices hit two-week highs_1

On the M15 chart, the Bollinger Bands (20,0,2) are shrinking and the price is approaching the lower border, signaling weakness and preparing for a new downtrend. The Ichimoku indicator with Tenkan-sen cuts below Kijun-sen, the price breaks below the Kumo cloud, confirming the downtrend signal. The Stochastic indicator (5,3,3) is entering the overbought zone and showing negative divergence, indicating that the downtrend may continue when the indicator exits the overbought zone. The trading volume of the M15 session tends to increase slightly in recent red candles, strengthening the selling pressure.

Trading Recommendations

Entry: SELL 3410

TP: 3,380

SL: 3.325

Risk Warnings and Disclaimers

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Adam

Economic

Forex

Summary:

EUR/AUD is hovering around 1.7520, lower than the previous day's close and remains under bearish pressure as the Bollinger Bands (20,0,2) expand downwards, suggesting a strengthening of the short-term downtrend.

BUY EURAUD

Close Time

CLOSED

1.75010

Entry Price

1.75650

1.74300

1.75615 +0.00348 +0.20%

71.0

Pips

Loss

1.74300

1.74296

Exit Price

1.75010

Entry Price

1.75650

Overview

On May 7, 2025, EUR/AUD opened M15 at around 1.7530 and quickly retreated to 1.7520 as selling increased, indicating that sellers were in control of the market. The pressure came from investors' concerns about the possibility that the Fed would not loosen its policy immediately, causing capital to seek safer assets. In addition, political tensions and expectations of tariffs between the US and major trading partners are also supporting the risk-off trend, similar to the recent rise in gold prices to a two-week high.

Market psychology

Market sentiment is currently in a state of high caution as the VIX index remains high following trade statements from the US government, causing money to flow out of risky assets.. Data from CME FedWatch shows that the market is almost certain that the Fed will not cut interest rates at its meeting on May 7, thereby reducing expectations of monetary easing in the short term. In addition, the pressure from the AUD maintaining its strength thanks to recent positive employment and GDP data in Australia has further pushed the EUR/AUD pair to decline and then increase.

Technical analysis

Pressure from AUD keeps strength on jobs data_1

On the M15 chart, Bollinger Bands (20,0,2) are expanding in the direction of the price breaking through the lower band, indicating increasing volatility and selling pressure. The Ichimoku indicator with Tenkan-sen crossing below Kijun-sen and the price below Cloud (Kumo) confirms the bearish signal. At the same time, Stochastic (5,3,3) is in the overbought zone and showing signs of negative divergence, implying that the downtrend is likely to continue.

Trading Recommendations

With a basic and technical perspective:.

Entry: Buy 1.75010

TP: 1.7565

SL: 1.7430 where the stronger support level converges in the H1 frame

Risk Warnings and Disclaimers

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Eva Chen

Central Bank

Forex

Summary:

Underperforming economic indicators in the UK have increased the likelihood of the Bank of England accelerating its interest rate cuts, thereby stimulating economic activity and subsequently bolstering the GBPUSD.

BUY GBPUSD

Close Time

CLOSED

1.33704

Entry Price

1.36500

1.32000

1.33156 -0.00156 -0.12%

170.4

Pips

Loss

1.32000

1.31995

Exit Price

1.33704

Entry Price

1.36500

Fundamentals

Ahead of monetary policy announcements from the Federal Reserve and the Bank of England (BOE), the British pound outperformed the U.S. dollar.

The final UK Services PMI for April registered at 49.0, a decrease from March's 52.5, marking the lowest level since January 2023. The Composite PMI also contracted to 48.5, entering negative territory for the first time in 18 months.

According to Tim Moore, Economics Director at S&P Global Market Intelligence, heightened business uncertainty significantly hampered economic activity. Export performance was the weakest since early 2021. Rising wage costs, linked to increases in National Insurance and the National Living Wage, drove input costs to their highest level since mid-2023. Service providers responded by implementing the most substantial price increases in nearly two years.

Business confidence declined substantially, attributed to "service sector firms preparing for prolonged global economic volatility and escalating recession risks". 22% of companies anticipate a downturn in economic activity over the next 12 months, a figure more than triple the levels observed following the 2024 general election.

MARKET WATCH: It is anticipated that the BOE will reduce the base rate to 4.25% at Thursday's meeting, supported by an 8-1 vote, aligning with market expectations and consensus. This suggests a lowered threshold for consecutive rate cuts.

We anticipate adherence to formal guidance, reiterating that "a gradual and cautious unwinding of monetary policy accommodation remains appropriate." Removing the term "gradual" from the guidance would signal the Monetary Policy Committee's consideration of successive rate cuts.

Given the downward surprise in inflation and sustained declines in energy prices since the February meeting, inflation forecasts are likely to be revised downward, despite conditional market-implied rate paths being significantly below February's projections. Wage growth has also slightly underperformed, with private sector regular pay growth at 5.9% (versus the BOE's Q1 forecast of 6.2%).

Economic growth has slightly exceeded expectations, with retail sales indicating improved private consumption, although tariff impacts pose a downside risk. We believe the former will elevate 2025 forecasts, while the latter will be reflected in a downward revision of 2026 GDP projections.

Technical Analysis

The GBPUSD showed positive intraday performance, yet remained range-bound below 1.3442, maintaining a neutral bias.

On the downside, a breach of the 1.3232 support level would signal a short-term top, potentially facing resistance at the critical 1.3433 level. A further retracement to the 55-day SMA, currently at 1.3030, or a break below this level, would shift the intraday trend to bearish.

On the upside, a breakout above the key 1.3433 resistance would confirm a resumption of a broader upward trend.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3340

Target Price: 1.3650

Stop Loss: 1.3200

Valid Until: May 21, 2025 23:55:00

Support: 1.3339, 1.3246, 1.3204

Resistance: 1.3425, 1.3443, 1.3512

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This area coincides with a previous local high at 1.3445 and may once again attract selling interest. If the pair fails to break above this barrier, the short-term bearish scenario remains intact.

SELL GBPUSD

Close Time

CLOSED

1.33800

Entry Price

1.32550

1.34300

1.33156 -0.00156 -0.12%

39.8

Pips

Profit

1.32550

1.33402

Exit Price

1.33800

Entry Price

1.34300

U.S. President Donald Trump delivered bold remarks on Tuesday during a joint press conference with Canadian Prime Minister Mark Carney. Trump asserted that there may be no need to revisit the renegotiation of the USMCA—the rebranded NAFTA deal he spearheaded during his first term in office.

The scope of his comments extended far beyond U.S.-Canada relations. He addressed a range of issues, including the escalating conflict with Yemen’s Houthi rebels, who have ramped up attacks on civilian maritime targets in recent months.

Trump also weighed in on the state of U.S.-China relations, stating that Beijing has shown little cooperation in recent trade discussions. This contradicts earlier claims from the president in recent weeks, where he suggested that productive talks were underway with unnamed Chinese officials. The apparent disconnect raises further doubts about the trajectory of U.S.-China trade negotiations.

Markets are now turning their attention to Wednesday’s Federal Open Market Committee (FOMC) meeting. Policymakers are widely expected to leave interest rates unchanged amid rising concerns that new tariffs could stoke inflationary pressures. Following the decision, investors will be closely monitoring Fed Chair Jerome Powell’s press conference for clues on the central bank’s next move.

Swap markets currently price in a high probability that the Fed will deliver its first rate cut of 2025 in July, followed by two additional 25-basis-point cuts before year-end. Despite a recent rise in Treasury yields, with the 10-year yield now at 4.345%—up over 15 basis points in just three sessions—the U.S. dollar remains under pressure. This is reflected in the performance of the U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies. The DXY slipped 0.31% to 99.47, failing to gain traction from higher yields.

Meanwhile, the British pound is trading cautiously ahead of the Bank of England’s (BoE) interest rate announcement on Thursday. Markets widely expect a 25-basis-point cut to 4.25%, marking the fourth rate reduction since the BoE began its current easing cycle last August.

Investors will be paying particular attention to the central bank’s forward guidance, especially as new tariffs imposed by President Trump on April 2—dubbed “Liberation Day”—continue to cloud the economic outlook. In its March policy statement, the BoE had signaled a gradual approach to easing. However, at the time, officials had yet to fully incorporate the potential risks of a trade war. Governor Andrew Bailey has since indicated that these risks must be more directly addressed before the end of April.

Against this backdrop, market participants expect the BoE to strike a more dovish tone in its updated forecasts. Analysts at the Commonwealth Bank of Australia noted, “We anticipate that the BoE will lower its GDP projections in response to trade tensions and may even remove references to a ‘gradual’ easing path.” Selling Pressure May Build Ahead of BoE Rate Cut_1

Selling Pressure May Build Ahead of BoE Rate Cut_1

Technical Analysis

GBP/USD has regained bullish momentum, pushing toward the key resistance zone at 1.3400. This area coincides with a previous local high at 1.3445 and may once again attract selling interest. If the pair fails to break above this barrier, the short-term bearish scenario remains intact. On the hourly chart, the RSI has surged to 76, signaling overbought conditions that could entice sellers positioning ahead of Thursday’s BoE decision.

The 100- and 200-period moving averages, currently sitting at 1.3328 and 1.3324 respectively, have recently formed a bearish crossover that remains in place. This technical pattern reinforces downside potential, with the first key support seen at 1.3255. A break below this level could open the door for a retest of the 1.3200 zone—last visited in mid-April.

Conversely, a decisive break above the 1.3400 resistance would invalidate the current bearish bias and pave the way for a move back toward the 1.3445 high, and potentially the formation of new local highs.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3380

Target price: 1.3255

Stop loss: 1.3430

Validity: May 16, 2025 15:00:00

Risk Warnings and Disclaimers

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