Rebound Momentum Ends, Market to Return to Decline

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

59.791 -0.018 -0.03%

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

0.80399 -0.00056 -0.07%

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

155.434 +0.089 +0.06%

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

1.16511 +0.00085 +0.07%

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

1.33247 -0.00065 -0.05%

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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Manuel

Central Bank

Economic

Summary:

This drop was followed by the formation of strong bullish candles, suggesting a possible local bottom and the early stages of a bullish reversal.

BUY AUDCHF

Close Time

CLOSED

0.53038

Entry Price

0.56000

0.50500

0.53354 -0.00053 -0.10%

24.6

Pips

Profit

0.50500

0.53284

Exit Price

0.53038

Entry Price

0.56000

U.S. President Donald Trump pushed back on Chinese claims that no dialogue has taken place between the two economic giants to ease their ongoing trade conflict. Speaking to reporters on Thursday, Trump insisted that discussions were indeed happening, stating, “They had a meeting this morning,” although he declined to specify who was involved. “It doesn’t matter who ‘they’ are. We’ll reveal that later,” he added. “But there were meetings this morning, and we’ve been in contact with China.”

Earlier this month, the White House imposed steep 145% tariffs on Chinese goods, prompting Beijing to retaliate with its own measures, including tighter export controls on critical minerals to the U.S. These developments may indirectly support the Australian dollar, which is closely tied to China both economically and through broader shifts in risk sentiment.

Meanwhile, the Reserve Bank of Australia (RBA) continues to adopt a cautious tone in its monetary policy. Minutes from its March 31–April 1 meeting suggest that while the upcoming May meeting may offer an opportunity to reassess policy, no firm commitments have been made regarding future interest rate changes. This reserved stance reflects the mixed signals emerging from Australia's economy.

Australia's labor market is showing signs of strain. The unemployment rate inched up to 4.1% in March, slightly below the 4.2% consensus, while the economy added just 32.2K jobs, falling short of the expected 40K. Additionally, the Westpac Leading Index, which tracks future economic momentum, slowed to 0.6% in March from 0.9% the previous month—highlighting a cooling trajectory.

The RBA emphasized that both upside and downside risks remain in play, reiterating its data-driven approach in weighing inflation pressures against growth potential.

Signs of easing U.S.-China trade tensions have lent a generally upbeat tone to global equity markets. In turn, this has slightly undermined demand for safe-haven assets like the Swiss franc (CHF), which had previously strengthened sharply following Trump’s aggressive tariff stance. The CHF’s recent gains prompted speculation that the Swiss National Bank (SNB) could intervene in foreign exchange markets or revisit its policy of negative interest rates if ongoing currency strength continues to hurt exports. Bulls May Regain Control After a Rebound from Record Lows_1

Bulls May Regain Control After a Rebound from Record Lows_1

Technical Analysis

The AUD/CHF pair remains in a well-defined descending channel. However, it recently broke through the lower boundary, reaching a historical low around 0.5000. This drop was followed by the formation of strong bullish candles, suggesting a possible local bottom and the early stages of a bullish reversal. On the D2 chart, the RSI dipped to 18—clearly in oversold territory—indicating that bearish momentum may be waning and that bulls could seize control.

The 100- and 200-period moving averages sit at 0.5653 and 0.5745, respectively—levels that align with the upper boundary of the descending channel and previous zones of price accumulation and rejection. These areas could act as resistance but also serve as potential targets for bullish momentum. The next significant objective may lie around the 0.5605 level, should buyers maintain pressure.

Trading Recommendations

Trading direction: Buy

Entry price: 0.5303

Target price: 0.5600

Stop loss: 0.5050

Validity: May 06, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

The Bank of Japan (BOJ) has significantly delayed its anticipated rate hike timeline, with some experts now projecting that the central bank may not increase rates until next year.

BUY USDJPY

EXP

EXPIRED

141.500

Entry Price

147.120

137.700

155.434 +0.089 +0.06%

Pips

EXPIRED

137.700

145.158

Exit Price

141.500

Entry Price

147.120

Fundamentals

The USDJPY pair traded below the 143.00 level on Wednesday, continuing its corrective decline from the highs reached over a week ago.

A recent survey of economists conducted by a leading financial news agency revealed that the BOJ is likely to maintain its key interest rate unchanged until at least June (a yen-negative development). While a marginal majority of respondents anticipate a 25-basis-point rate hike from the BOJ in the next quarter, this proportion has declined from the more than two-thirds of respondents who expected a rate increase in the previous month's survey.

Additionally, nearly 90% of respondents indicated that the risk of a recession in Japan remains very low. This reflects the consensus among economists that despite the disruptions caused by President Trump's unpredictable tariff actions, the BOJ's path toward policy normalization has not been derailed. Many central banks globally are currently cutting rates to support their economies and mitigate the impact of the ongoing trade tensions initiated by the United States.

Meanwhile, Nada Choueiri, Deputy Director of the Asia and Pacific Department at the International Monetary Fund (IMF), told Reuters that the heightened uncertainty surrounding US tariff policies has affected business confidence and economic outlooks, potentially leading the BOJ to delay further rate hikes.

She noted that many Japanese companies are currently hesitant to proceed with investment plans, opting to wait for greater clarity on global trade conditions. "This hesitation also delays investment decisions," Choueiri said, adding that downside risks to economic growth and inflation are increasing.

She stated, "We do see that if our baseline scenario materializes, the BOJ's rate hike will be postponed."

Choueiri also commented on the recent appreciation of the yen, reaffirming its status as a "safe-haven currency" and noting that the yen is supported by the country's economic stability and predictability.

Technical Analysis

After falling to the September low of 139.88, USDJPY climbed to a high of 143.56 on Wednesday.

The USDJPY pair has formed two robust bullish patterns at the bottom of its recent plunge. Coupled with the recovery of technical indicators from oversold levels, this suggests that the asset may continue to rise in the short term. However, as long as the 38.2% Fibonacci retracement level of the 158.86 to 139.87 range (147.12) holds as resistance, the overall risk remains skewed to the downside. On the downside, a confirmed break below 139.26 would have a more significant bearish impact on the market.

In a downside scenario, if the current selling pressure persists, attention will shift back to the psychological level of 140.00 and the support at 139.30. The resistance zone around 138.00 may keep sellers on guard, slowing the momentum towards the 134.65-135.00 area.