Potential Downturn Looms as AUD/USD Tests Key Barrier

Forex

Economic

Summary:

The 8-hour RSI has reached 66.90, approaching overbought territory, which could invite selling pressure from the resistance zone.

SELL AUDUSD

Close Time

CLOSED

0.63950

Entry Price

0.62000

0.64700

0.66417 -0.00103 -0.15%

9.3

Pips

Profit

0.62000

0.63857

Exit Price

0.63950

Entry Price

0.64700

The University of Michigan's Consumer Sentiment Index for the United States has fallen for a fourth consecutive month, reflecting growing concerns among households. The indicator dropped by 4.8 points in April, reaching 52.2—its lowest reading in 33 months. Despite the decline, the figure still exceeded market expectations, which had forecast a reading of 50.8.

Meanwhile, the Consumer Expectations Index fell sharply to 47.3 from 52.6, marking its lowest level since July 2022. According to the accompanying report, while the decline in Current Conditions during April was relatively modest, the Expectations component plunged, weighed down by deteriorations in both personal finances and broader business conditions. Expectations have now dropped a steep 32% since January—the largest quarterly percentage decline recorded since the recession of 1990.

Inflation expectations also moved higher. The 1-year inflation outlook surged to 6.5% in April from 5% in March, although it still came in slightly below the 6.7% consensus forecast. For the 5-year horizon, inflation expectations climbed to 4.4% from the previous 4.1%, aligning with market projections.

On the geopolitical front, President Trump reiterated that the U.S. remains engaged with China over trade issues, though Chinese authorities denied that any active tariff negotiations are underway. Bloomberg reported that China may consider lifting tariffs on select U.S. goods; however, Chinese officials largely sidestepped questions regarding potential exemptions.

Looking ahead, market participants are preparing for a busy data calendar next week, which includes the U.S. JOLTS report for March, the first estimate of Q1 GDP growth for 2025, the ISM Manufacturing PMI, and April’s Non-Farm Payrolls report.

As for monetary policy, traders are pricing in a 92% probability that the Federal Reserve will leave interest rates unchanged at its upcoming meeting, according to Prime Market Terminal data. Nonetheless, market expectations suggest that the Fed’s policy rate could end the year at 3.45%, implying approximately 86 basis points of easing.

Meanwhile, the Reserve Bank of Australia (RBA) continues to strike a cautious tone regarding monetary policy. Minutes from its March 31–April 1 meeting reveal that while May’s meeting could provide an opportunity to reassess the outlook, the RBA has not committed to any specific changes. This cautious approach underscores the mixed signals emerging from the Australian economy.

Australia’s labor market, for instance, is showing early signs of strain. The unemployment rate edged up to 4.1% in March, slightly better than the expected 4.2%, but job creation disappointed, with just 32.2K positions added compared to the forecasted 40K. Moreover, the Westpac Leading Index, which tracks future economic momentum, slowed to 0.6% in March, down from 0.9% the month before—suggesting a loss of growth traction.

The RBA stressed that risks to both the upside and downside remain and reiterated its data-driven approach to balancing inflation pressures against the risk of slower growth.

Improving U.S.-China trade sentiment has helped lift global equity markets recently. However, this shift has slightly diminished demand for safe-haven assets like the Swiss franc (CHF), which had previously strengthened significantly amid escalating tariff tensions. The CHF’s strong performance has raised speculation that the Swiss National Bank (SNB) might intervene in currency markets or consider adjusting its longstanding negative interest rate policy should the currency’s appreciation threaten export competitiveness. Potential Downturn Looms as AUD/USD Tests Key Barrier_1

Potential Downturn Looms as AUD/USD Tests Key Barrier_1

Technical Analysis

The AUD/USD pair recently climbed to a local high of 0.6441, briefly surpassing the previous peak at 0.6410 before facing sharp rejection. This price action could signal that the 0.6440–0.6450 zone is becoming a significant resistance area, raising the possibility of a downside correction from current levels. Supporting this view, the 8-hour RSI has reached 66.90, approaching overbought territory, which could invite selling pressure from the resistance zone.

Additionally, the 100- and 200-period moving averages are converging around 0.6290, indicating that the average price of the last 100 and 200 candles is clustered near this level. Statistically, this could act as a magnet for price retracements, reinforcing the likelihood of a corrective move toward this zone. Below that, the next key support lies at 0.6200, a level that has historically acted as a strong floor for price action and could serve as a target should bearish momentum persist.

However, should AUD/USD manage to break above 0.6450 with conviction, the bullish trend could extend further, invalidating near-term bearish signals and opening the door for additional upside gains.

Trading Recommendations

Trading direction: Buy

Entry price: 0.6395

Target price: 0.6200

Stop loss: 0.6470

Validity: May 06, 2025 15:00:00

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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Manuel

Cryptocurrency

Summary:

This rally has been fueled in part by improving geopolitical conditions and continued institutional adoption.

BUY BTC-USDT

EXP

EXPIRED

91300.0

Entry Price

108000.0

85000.0

89322.0 +294.3 +0.33%

Pips

EXPIRED

85000.0

94678.0

Exit Price

91300.0

Entry Price

108000.0

As Bitcoin reclaims its February highs, a shift in market sentiment is becoming increasingly evident—especially through the lens of spot Bitcoin ETFs, which are now turning positive after a period of subdued activity.

All 12 U.S.-listed Bitcoin ETFs recorded their fifth consecutive session of net capital inflows on Thursday, attracting over $2.8 billion between April 17 and 24, according to data compiled by SoSoValue. This consistent wave of investor interest highlights a renewed appetite for crypto exposure via regulated vehicles.

Thursday’s session alone saw a net inflow of $442 million across the group, a slight moderation compared to the combined $900 million seen in the two prior sessions. Notably, the third-largest single-day inflow of the year occurred on Tuesday, totaling an impressive $936.4 million.

Leading the charge was BlackRock’s IBIT—currently the world’s largest Bitcoin ETF—with $327.3 million in net inflows for the day. Following closely were Ark and 21Shares’ ARKB with $97 million and Bitwise’s BITB with over $10 million. Invesco’s BTCO also saw healthy participation, recording $7.5 million in net inflows.

The remaining U.S. Bitcoin ETFs closed the session neutral, posting no daily inflows or outflows, but still contributing to the broader bullish trend.

As of April 24, 2025, updated data from SoSoValue shows that IBIT has amassed $40.9 billion in total inflows and holds $54.8 billion in assets under management (AUM)—securing its status as the dominant Bitcoin ETF globally.

“BlackRock now holds 2.77% of Bitcoin’s total circulating supply,” noted analysts at Arkham Intelligence on Friday, referencing the cryptocurrency’s capped supply of 21 million tokens. The firm also pointed out that IBIT alone added more than $1 billion worth of Bitcoin this week amid intensifying institutional demand.

In total, the 12 U.S.-listed spot Bitcoin ETFs have collectively drawn $2.8 billion in net inflows over the last five trading sessions, underscoring the strength of the ongoing bullish momentum in the cryptocurrency market.

At the regulatory level, newly appointed SEC Chairman Paul Atkins made his first public appearance at a crypto-focused roundtable on Friday. In his keynote speech, he reassured market participants that the Commission will continue to shape a policy framework that supports digital asset innovation. He emphasized the SEC’s commitment to developing a “rational, fit-for-purpose framework” in anticipation of congressional action that may soon define clearer rules for crypto market structure. BTC Bulls May Accelerate if Key Support Holds_1

BTC Bulls May Accelerate if Key Support Holds_1

Technical Analysis

Bitcoin has staged a notable recovery from its local low of $74,585 recorded on April 7, climbing steadily to the current level near $95,000. This rally has been fueled in part by improving geopolitical conditions and continued institutional adoption, allowing BTC to break above its 100- and 200-period moving averages, currently positioned at $90,837 and $90,083, respectively—further reinforcing bullish momentum.

However, the Relative Strength Index (RSI) has now surged to 72 on the daily chart, signaling that the market may be entering overbought territory. This raises the possibility of a short-term correction, especially if buyers begin to take profits near recent highs.

Should a pullback occur, the $91,290 level—previously acting as both resistance and support—could serve as a key zone to watch. Holding above this level would be a strong indication that the broader uptrend remains intact and may even set the stage for a renewed rally.

Trading Recommendations

Trading direction: Buy

Entry price: 91300

Target price: 108000

Stop loss: 85000

Validity: May 06, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

Driven by the prospects of increased production by OPEC+, WTI crude oil is still expected to post a weekly decline. The International Energy Agency (IEA) anticipates that oil prices may continue to fall further.

SELL WTI

Close Time

CLOSED

62.158

Entry Price

57.000

64.200

57.543 +0.310 +0.54%

262.8

Pips

Profit

57.000

59.530

Exit Price

62.158

Entry Price

64.200

Fundamentals

WTI crude oil prices declined during the European trading session on Friday, with trading prices breaking below $62.00 per barrel. Despite the recent recovery in oil prices, the potential for increased production by OPEC+ has intensified market concerns over supply overhangs, maintaining the downward trend for the week.

Meanwhile, Fatih Birol, the Executive Director of the IEA, stated that with the addition of new production and continued restrictions on demand, oil prices may decline further this year. Although crude oil futures have rebounded over the past two weeks, trading near $68 per barrel, this is still about 9% lower than the trading prices before President Trump announced significant tariffs on other countries on April 2. Fatih Birol noted that the IEA believes "demand growth in the market is slow. If there are no other surprises, we may expect further downward pressure on oil prices."

He also mentioned that there are still many uncertainties, "If there are positive changes in the trade war context, it may boost the global economic outlook. We may see oil demand slightly higher than the current level." He added that it is also difficult to predict the direction of Iran's oil exports in the negotiations between Iran and the Trump administration. Trump earlier indicated a willingness to meet with the Iranian President or Supreme Leader.

Market Observations: From a fundamental perspective, crude oil prices do not seem to have been affected by recent inventory data, as investors are still focused on geopolitical tensions in the Middle East and the Fed's interest rate cut expectations.

Geopolitical tensions between Russia and Ukraine continue. Trump hinted that peace talks are making progress, but Russia stated that Zelensky refuses to make concessions.

Further conflicts in the region may prolong supply concerns, which is positive for energy commodities, although the expectation of the next OPEC+ production increase will bring downward pressure.

Rebound Momentum Ends, Market to Return to Decline_1

Technical Analysis

WTI crude oil prices continued to trade within an ascending channel on Friday. Currently, oil prices are hovering around $62.83 per barrel, in a stage of rebounding from the bottom. However, the four-hour chart shows that WTI crude oil prices are in a head-and-shoulders top pattern, indicating that there may be some pullbacks in the future.

In terms of moving averages, prices are currently trading below the 100-day and 200-day moving averages, confirming that the overall path of least resistance remains downward. These moving averages have provided dynamic resistance during the last major pullback, reinforcing the bearish market structure.

The stochastic oscillator is moving downward from the midline level, indicating that short-term selling momentum is increasing, but it is not yet oversold.

Meanwhile, the relative strength index is also turning downward around 50, indicating that momentum is beginning to diverge downward, with more room for decline before reaching oversold conditions.

Near-term resistance is located at the 0.382 Fibonacci level ($63.77), while immediate support is near the $61.80 level. Traders are advised to mainly take short positions on rallies.

Trading Recommendations

Trading Direction: Sell

Entry Price: 62.50

Target Price: 57.00

Stop Loss: 64.20

Valid Until: May 10, 2025, 23:55:00

Support: 61.37/61.14/59.83

Resistance: 63.13/63.77/64.13

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The USD/CHF pair rebounded during the Asian session, trading around 0.8320 as optimism surrounding US-China trade negotiations bolsters the US Dollar.

BUY USDCHF

Close Time

CLOSED

0.83001

Entry Price

0.84500

0.82000

0.79604 +0.00022 +0.03%

100.1

Pips

Loss

0.82000

0.81993

Exit Price

0.83001

Entry Price

0.84500

The US Dollar is regaining ground against the Swiss Franc, with the USD/CHF pair bouncing back from recent losses and trading near 0.8320 during Friday’s Asian session. This upward momentum in the Greenback comes as investor sentiment shows signs of improvement, driven largely by emerging optimism surrounding the potential easing of US-China trade tensions.

According to a Bloomberg report, China is currently reviewing the possibility of suspending its hefty 125% tariffs on a select group of US imports, notably medical equipment, ethane, and aircraft leasing. The development, though not officially confirmed, has been positively received by markets. Sources close to the matter suggest that Chinese officials are seriously contemplating waivers for aircraft leasing tariffs, a move that could provide a symbolic and practical de-escalation in trade relations with Washington.

Michael Hart, President of the American Chamber of Commerce in China, offered a cautiously optimistic view on the situation, stating that it is “encouraging” to see both countries revisiting the topic of tariffs. He added that while there is chatter about the development of exclusion lists for certain categories of imports, no formal announcements or policy changes have yet emerged. Both the Chinese Ministry of Commerce and the US Department of Commerce are said to be in the process of collecting stakeholder input, signaling the early stages of a potentially significant policy shift.

This cautious optimism, coupled with further signs of constructive dialogue with key Asian allies such as South Korea and Japan, has provided tailwinds for the US Dollar. As the US works to reestablish more stable trade frameworks under the Biden administration, the Greenback is drawing strength from the perception of diplomatic and economic progress on the global stage.

Swiss Franc’s Resilience Complicates SNB’s Policy Landscape

On the other side of the pair, the Swiss Franc remains a formidable force, recently achieving its strongest level in over a decade against the USD as of April 21. Investors continue to flock to the CHF as a classic safe-haven play amid lingering geopolitical uncertainty and concerns about global economic growth. This demand has created an upward pressure on the Swiss currency that is proving increasingly difficult for the Swiss National Bank (SNB) to manage.

The persistent appreciation of the Franc has led to a notable decline in import prices, undermining the SNB’s inflation target range of 0% to 2%. With inflation now hovering dangerously close to zero, the central bank faces mounting challenges in achieving its mandate for price stability. Compounding the issue is the SNB’s limited room for maneuver on interest rates, which currently sit at a modest 0.25% and are widely expected to be lowered further in the coming quarters.

Given the narrowing efficacy of conventional monetary policy, a growing chorus of analysts argue that direct currency intervention may prove more effective than additional rate reductions. Such interventions—while controversial—could provide immediate relief from the upward pressure on the Franc, without further compressing domestic lending margins or destabilizing the financial sector. However, the SNB remains adamant that any such actions would be aimed strictly at maintaining price stability and not at manipulating the currency for competitive advantage.

Technical Analysis

From a technical perspective, USD/CHF is displaying signs of a bullish correction. The pair has reclaimed ground above its 50-period Exponential Moving Average (EMA50) and recently broke through a key bearish trendline, suggesting the potential for continued upward momentum in the near term.

Supporting the bullish outlook, the Relative Strength Index (RSI) has exited overbought territory and is beginning to flash early positive signals once more. These developments suggest that the pair may be poised for further gains, particularly if it can maintain support above the 0.8240 level.We are eyeing 0.8380 as the next significant resistance zone, with the broader trading range expected to fall between 0.8200 and 0.8450.

TRADE RECOMMENDATION

BUY USDCHF

ENTRY PRICE: 0.8300

STOP LOSS: 0.8200

TAKE PROFIT: 0.8450

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Japanese Yen faces renewed pressure as optimism around a potential U.S.-China trade breakthrough weakens demand for safe-haven assets.

BUY USDJPY

Close Time

CLOSED

143.500

Entry Price

148.000

140.400

155.267 -0.547 -0.35%

76.3

Pips

Profit

140.400

144.263

Exit Price

143.500

Entry Price

148.000

The Japanese Yen continued to drift lower on Friday, surrendering ground to the U.S. Dollar as markets embraced risk amid growing hopes for a de-escalation in the long-running trade tensions between the U.S. and China. The USD/JPY pair climbed to a two-week high near 143.85 during the European session, reflecting a broader shift away from safe-haven assets like the Yen.

Investor sentiment has been buoyed by encouraging signals from both Washington and Beijing, sparking optimism that a resolution to the trade standoff the economic flashpoint that has haunted global markets for years may finally be within reach. U.S. President Donald Trump indicated that discussions were underway, while reports surfaced that China is considering suspending some of its steep tariffs on American imports, particularly the 125% levy that had become a symbolic pillar of the trade war.

Despite China's Foreign Ministry later tempering expectations by denying any ongoing negotiations over tariffs, markets largely shrugged off the ambiguity, clinging to the broader narrative of improving bilateral relations. This has undermined demand for traditional safety plays, pushing the Yen lower across the board.

Yet, even as the Yen weakens, its downside appears somewhat limited thanks to Japan’s evolving monetary landscape. Fresh inflation data from Tokyo offered a stark reminder that Japan may be in the early stages of a structural shift in consumer prices after decades of deflationary pressures.

April’s Tokyo Consumer Price Index (CPI) surged 3.5% year-on-year, up from 2.9% in March. The more telling core CPI which strips out volatile food prices jumped to 3.4%, the highest in two years and well above forecasts of 3.2%. Most notably, the gauge excluding both fresh food and fuel an index closely monitored by the Bank of Japan rose to 3.1% from 2.2% in the previous month.

The robust data paints a picture of broadening inflationary pressures and lends credence to expectations that the BoJ may deliver another rate hike in 2025. This would mark a rare divergence from the global norm in recent years and would further reinforce the BoJ's slow but steady pivot away from its ultra-accommodative stance.

Following its historic exit from negative interest rates earlier this year, a follow-up hike next year is increasingly being priced into the market, especially if inflation continues to exceed the BoJ's 2% target. For currency markets, this provides a potential anchor for the Yen even if its short-term trajectory remains clouded by broader macro developments.

On the other side of the Pacific, the U.S. Federal Reserve appears to be pivoting in the opposite direction. A growing chorus of dovish commentary from Fed officials is keeping the Dollar's gains in check, despite a surprisingly strong set of economic data.

Fed Governor Christopher Waller suggested that he would support rate cuts if renewed tariffs begin to erode job market strength, while Cleveland Fed President Beth Hammack floated the possibility of a June cut conditional on clarity in the data. These remarks come just a week after Fed Chair Jerome Powell emphasized a cautious, wait-and-see approach.

Market participants now broadly anticipate that the Fed will ease policy at least three times before the year is out. This expectation has somewhat offset the bullish impulse from U.S. economic indicators. On Thursday, the Labor Department reported that weekly jobless claims edged up only slightly to 222,000, signaling a resilient labor market. Simultaneously, durable goods orders exploded 9.2% in March, far outpacing estimates, driven primarily by strong transportation demand.

Despite this economic strength, traders are increasingly betting that the Fed will pivot toward easing, especially if trade-related uncertainty escalates.

In the medium to long term, the widening policy gap between the BoJ and the Fed could emerge as a key driver for the Yen. While the near-term sentiment leans risk-on, diminishing the appeal of low-yielding safe havens, any sustained shift in rate differentials would likely bring the Yen back into focus for global investors.

Adding to this dynamic, Japan is expected to resume trade negotiations with the U.S. next week, with Economy Minister Ryosei Akazawa scheduled to meet Treasury Secretary Scott Bessent. These talks could have broader implications for U.S.-Japan economic relations and may further shape sentiment around the Yen.

Technical Analysis

From a technical perspective, the USD/JPY has exited a minor bearish channel, signaling renewed bullish momentum. The pair has maintained its position above the 50-day Exponential Moving Average (EMA50), while the Relative Strength Index (RSI) has turned decisively higher, having cooled from previous overbought conditions.

This shift supports expectations for further upside, with immediate support seen at 142.25. As long as the pair holds above this level, the path toward testing the psychological 144.00 resistance remains intact. The technical landscape aligns with fundamental forces, reinforcing the view that USD/JPY could continue its upward trajectory at least in the near term.

TRADE RECOMMENDATION

BUY USDJPY

ENTRY PRICE: 143.50

STOP LOSS: 140.40

TAKE PROFIT: 148.00

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Recent economic data from the Eurozone highlights signs of economic deterioration, with markets betting on continued interest rate cuts by the European Central Bank (ECB), potentially pressuring the euro lower.

SELL EURUSD

Close Time

CLOSED

1.13541

Entry Price

1.08900

1.15800

1.17346 -0.00048 -0.04%

20.7

Pips

Profit

1.08900

1.13334

Exit Price

1.13541

Entry Price

1.15800

Fundamentals

On April 23rd, Eurozone economic data revealed worsening economic conditions. The Eurozone's April Composite PMI dipped to 50.1, nearing the expansion-contraction threshold. The Services PMI unexpectedly contracted to 49.7 (below the expected 50.5), while German private sector activity shrank for the first time in four months, and France's Services PMI hit its lowest since 2020.

Additionally, uncertainty over U.S. President Trump's tariff policies has weighed on European businesses. Activity driven by factories fulfilling prior orders led the backlog index to slide to 46.8 in April from 47.7 in March, marking a three-month low. Cyrus de la Rubia, Chief Economist at Hamburger Commercial Bank, noted: "Activity has shrunk instead of growing, which it had been doing almost continuously since February 2024. This has pushed the whole economy into stagnation territory."

Markets anticipate the ECB may resume interest rate cuts to counter recession risks, potentially lowering policy rates further to 1.5%, which would weigh on the euro.

Technical Analysis

Head and Shoulders Top Formation Imminent, Short-Term Bearish Outlook _1

Regarding the weekly chart, after rising to just below the 1.1610 resistance level, the euro's bullish momentum waned, with sustained weekly declines. An inverted hammer candlestick pattern is emerging. If confirmed after this week's close, it could signal a short-term top, increasing the likelihood of further downside.

Head and Shoulders Top Formation Imminent, Short-Term Bearish Outlook _2

The EUR/USD price structure suggests a potential head and shoulders top formation in the 4H chart. A breakdown below the neckline at 1.1270 would confirm this pattern, raising the probability of continued declines. The first target is 1.0850.

Selling at highs is recommended.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1360

Target price: 1.0890

Stop loss: 1.1580

Valid Until: May 09, 2025, 23:00:00

Support: 1.1270/1.1090

Resistance: 1.1473/1.1572

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This movement has formed a classic double top pattern—widely regarded as a bearish reversal formation.

SELL GBPUSD

Close Time

CLOSED

1.33127

Entry Price

1.30400

1.35140

1.33568 -0.00139 -0.10%

30.9

Pips

Profit

1.30400

1.32818

Exit Price

1.33127

Entry Price

1.35140

On Thursday, a spokesperson for China’s Ministry of Commerce urged the United States to lift all tariffs on Chinese imports, stating that doing so would be essential “if it truly wants to solve the issue.” While U.S. President appeared open to launching new trade talks, Treasury Secretary Scott Bessent quickly dampened investor enthusiasm by making it clear that unilaterally cutting tariffs was not an option currently under consideration.

Meanwhile, in the economic data sphere, U.S. durable goods orders saw a sharp increase in March, jumping from 0.9% to 9.2%—a surge primarily driven by robust aircraft bookings. Initial jobless claims for the week ending April 19 rose to 222,000, in line with expectations and slightly above the previous week’s 216,000.

Earlier this week, President Trump clarified that he has no intention of removing Jerome Powell from his role as Chair of the Federal Reserve. However, recent verbal attacks by Trump targeting the Fed’s independence and its reluctance to further ease monetary policy have led investors to reassess the U.S. dollar’s reputation as a safe haven. This shift has triggered risk-off moves in U.S. assets in recent trading sessions.

On Thursday, Federal Reserve Governor Christopher Waller emphasized during a Bloomberg interview that tariffs have become a central issue in economic discussions. He highlighted how ongoing trade uncertainty has left many businesses in a state of paralysis, awaiting clarity before committing to investment decisions.

Also weighing in on the matter, Fed Governor Adriana Kugler noted that elevated U.S. import tariffs are likely to add upward pressure on prices. She advocated for holding short-term interest rates steady until inflation risks display more definitive signs of easing. Minneapolis Fed President Neel Kashkari echoed this sentiment, stating that tariffs are acting as a drag on growth and warning that the Fed must remain vigilant to prevent trade policies from igniting long-term inflationary pressures.

Across the Atlantic, Bank of England (BoE) Governor Andrew Bailey has also expressed concern about the threat that trade conflicts pose to global economic growth. Speaking on the sidelines of the IMF spring meetings on Wednesday, Bailey emphasized the importance of closely monitoring trade-related risks, particularly ahead of the BoE’s May policy meeting. “We must take the threat to growth very seriously,” he stated, adding that the central bank is currently weighing its next rate decision, which is due in two weeks.

Market expectations have now shifted strongly in favor of a 25-basis-point rate cut by the BoE in May, which would bring the benchmark rate down to 4.25%. For the remainder of the year, the International Monetary Fund (IMF) has projected three rate cuts by the BoE and downgraded its U.K. GDP growth forecast for 2025 to 1.1%, down from its previous estimate of 1.6%, citing global uncertainty triggered by Trump-era trade policies.

Looking ahead, investors will turn their focus to U.K. retail sales data for March, set to be released on Friday. Retail sales—a key measure of consumer spending—are expected to have fallen by 0.4% month-over-month after a 1% rise in February. On a year-over-year basis, consumer spending is projected to have increased by 1.8%, a slowdown from the previous reading of 2.2%. Selling Pressure Could Emerge if the Double Top Holds_1

Selling Pressure Could Emerge if the Double Top Holds_1

Technical Analysis

The GBP/USD pair recently approached a critical resistance zone near the local high of 1.3433, recorded on September 25 of last year. This movement has formed a classic double top pattern—widely regarded as a bearish reversal formation. As the pair tested this level, it began to retreat, signaling that a corrective move may be underway.

This pullback could extend toward the rising trendline that has been in place since January 13. The 1.3035 level, which intersects with this trendline, stands out as a potential downside target if bearish momentum persists.

Supporting this view is the Relative Strength Index (RSI), which has climbed to 71, entering overbought territory. This condition often draws in sellers who anticipate a reversal driven by momentum exhaustion.

Further reinforcing the bearish case is the position of the 100- and 200-period moving averages, currently located at 1.2701 and 1.2834, respectively. These averages are beginning to converge near the upward trendline, creating a zone of potential technical confluence. As the price approaches this area from above, the former resistance near 1.3035 may transition into a support level in the event of a deeper correction.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3312

Target price: 1.3040

Stop loss: 1.3514

Validity: May 06, 2025 15:00:00

Risk Warnings and Disclaimers

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