Risk Is Skewed to the Upside

Forex

Economic

Summary:

The British pound advanced on risk-on sentiment, with bulls testing resistance at 1.9597; a breach would signal further upside. The Japanese yen weakened as long-dated Treasury yields retreated. The Ministry of Finance is considering a reduction in bond sales.

BUY GBPJPY

Close Time

CLOSED

193.893

Entry Price

199.800

191.000

207.087 -0.013 -0.01%

116.1

Pips

Profit

191.000

195.054

Exit Price

193.893

Entry Price

199.800

Summary

The UK market resumed trading after the long weekend, with the GBPJPY rising for the second consecutive day on Tuesday, reflecting a mildly optimistic market sentiment. Last week, UK retail sales increased by 1.2% month-over-month, surpassing expectations and marking the strongest annual growth since 2022, which continues to support the pound.

UK retail sales for April rose 1.2% month-over-month, significantly exceeding the forecasted 0.3% increase. This represents the fourth consecutive month of growth, reaching the highest level since July 2022. Food store sales led the gains with a robust 3.9% rebound, primarily driven by favorable weather conditions that offset declines in February and March.

Overall, retail volumes for the three months ending in April expanded by 1.8% compared to the previous quarter, the strongest quarterly increase since July 2021. Year-over-year volume growth stood at 2.6%, the largest since March 2022.

Additionally, the decision by Trump to delay imposing a 50% tariff on Eurozone products has bolstered market sentiment.

The optimistic sentiment is exerting downward pressure on the Japanese yen. Despite Governor Ueda's hawkish remarks, which bolstered expectations for further monetary policy tightening, the yen continues to depreciate against major currencies. The primary driver remains the escalating concerns surrounding Japan's debt sustainability, which currently weighs on the currency.

A recent report indicates that the Ministry of Finance is contemplating a reduction in super-long-term bond issuance for the current fiscal year, as diminished demand from traditional buyers triggers a significant yield increase. The 30-year JGB yield declined approximately 20 basis points during the Asian trading session, reaching 2.85%. This development could amplify the negative pressure on the yen.

Technical Analysis

The UK market experienced thin trading on Tuesday, and the weakening of the Japanese yen may provide support for the asset in the upcoming sessions. Bulls are currently testing resistance at the prior high of 195.97. A breach of this level would suggest that the GBPJPY retracement from 196.38 has concluded at 191.867. The bullish trend would then likely resume, with the next resistance level at 196.41. The upside risk remains as long as the 191.86 support level holds.

Trading Recommendations

Trading Direction: Buy

Entry Price: 193.90

Target Price: 199.80

Stop Loss: 191.00

Valid Until: June 11, 2025 23:55:00

Support: 193.73, 191.86, 191.18

Resistance: 195.97, 196.41, 196.63

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.

Add to Favorites

Warren Takunda

Economic

Summary:

The Euro continues its upward trajectory against the Japanese Yen, breaching the 163.00 mark amid rising optimism around US-EU trade dynamics and dovish sentiment surrounding Japan’s super long-term bond yields.

BUY EURJPY

Close Time

CLOSED

163.500

Entry Price

166.000

160.000

181.084 +0.211 +0.12%

21.8

Pips

Profit

160.000

163.718

Exit Price

163.500

Entry Price

166.000

The Euro extended its bullish advance against the Japanese Yen on Monday, surging from last week’s low of 161.00 to trade firmly above the 163.00 handle, with market momentum targeting the next technical resistance near 163.45. This two-day climb is underpinned by a cocktail of improving risk sentiment, dovish Japanese bond market dynamics, and supportive commentary from European Central Bank President Christine Lagarde.

Investors’ appetite for the Euro remains buoyed by geopolitical relief following a temporary de-escalation of trade tensions between the European Union and the United States. President Donald Trump’s decision to postpone a 50% tariff deadline has temporarily lifted some of the uncertainty hanging over transatlantic trade. This reprieve has allowed the Euro to rally broadly as investors rotate out of the traditional safe-haven Yen.

Adding to the Yen’s troubles is a notable softening in Japanese government bond (JGB) yields—particularly at the long end of the curve. Japan’s Ministry of Finance is reportedly contemplating a reduction in super long-term bond issuance for the current fiscal year, which has triggered sharp yield declines in 20-, 30-, and 40-year maturities. This has eroded yield-based demand for the Yen and further cemented its position as one of the weakest major currencies this week.

What’s striking is the market’s muted reaction to the Bank of Japan’s (BoJ) recent hawkish commentary. Governor Kazuo Ueda underscored the upside risks to inflation and reiterated that further interest rate hikes remain on the table. Yet, his comments have failed to reverse the Yen’s downward momentum—suggesting that traders are more fixated on structural bond market moves and broader global trade narratives than on incremental shifts in BoJ policy rhetoric.

Meanwhile, the Euro is drawing strength from the perception that it could evolve into a more prominent global reserve currency. In remarks delivered Monday, ECB President Christine Lagarde indicated that the Euro’s status might strengthen amid the US’s increasingly unpredictable trade policies and fiscal challenges. Lagarde’s statement that the Euro could become a “viable alternative” to the US Dollar in global trade and finance has sparked renewed optimism among Euro bulls.

The ECB’s more constructive tone on the Euro also arrives as European policymakers and businesses prepare for a potential reconfiguration of global supply chains. If tariff threats materialize in the coming months, the Eurozone could stand to benefit from diverted trade flows away from US-dominated channels.

Technical Analysis

From a technical standpoint, the EUR/JPY pair has confirmed a fresh positive close above the 163.30 support level, bolstered by the stability of the 55-period moving average. This base strengthens the case for a continuation of the bullish trend, especially if the pair maintains positive momentum through the coming sessions.

A decisive break above the 165.00 resistance barrier would not only validate the current rally but could open the door for further gains toward 166.00 and potentially 170.00. Momentum indicators are aligning with this scenario, suggesting that bullish forces remain intact as long as support at 163.30 holds.

On the flip side, a drop below the current support area, coupled with a negative daily close, would invalidate the bullish outlook and suggest a return to the broader downtrend. In such a case, the pair could quickly descend toward 160.90, re-entering a bearish channel with the potential for deeper losses.

TRADE RECOMMENDATION

BUY EURJPY

ENTRY PRICE: 163.50

STOP LOSS: 160.00

TAKE PROFIT: 166.00

Risk Warnings and Disclaimers

Add to Favorites

Alan

Commodity

Summary:

Escalating geopolitical risks and weakening USD credibility are jointly creating a bullish environment for gold.

BUY XAUUSD

Close Time

CLOSED

3292.14

Entry Price

3490.00

3195.00

4207.19 +9.28 +0.22%

464.5

Pips

Profit

3195.00

3338.59

Exit Price

3292.14

Entry Price

3490.00

Fundamental

Recent developments in geopolitical tensions and U.S. dollar dynamics are reinforcing gold's appeal as a safe-haven asset. The Russia-Ukraine conflict has intensified, with Russia launching a record 355 drones and 9 cruise missiles at Ukraine in a single day—the highest attack volume since the war began—directly boosting demand for safe-haven assets. Meanwhile, Middle East tensions remain high as Iran firmly rejects halting uranium enrichment, while disagreements between Israel and the Trump administration over Iran policy, coupled with stalled Hamas ceasefire negotiations, further amplify gold's role as a geopolitical hedge.

Additionally, the Trump administration's threats of new sanctions against Russia and the passage of a massive tax-cut bill are not only increasing policy uncertainty but also projected to add $3.8 trillion to U.S. federal debt over the next decade. The USD index has fallen to a four-week low of 98.69, reflecting long-term concerns over U.S. dollar credibility. Concurrently, the ECB's push for a "Global Euro Era" is reshaping gold's status as a non-sovereign store of value.

Against this backdrop, central bank gold purchases sustained (244 tons net in Q1), OECD leading indicators signaled a global economic downturn and raising stagflation risks brought by weak manufacturing data from both China and the U.S. reinforce gold's dual role. Now, gold serves as a safe haven during geopolitical turmoil and a hedge against sovereign currency devaluation and recession risks.

Technical Analysis

Bullish Trend Remains Intact, Await Pullback for Long Positions _1

The daily chart shows gold consolidating near recent highs. After a deep pullback to 3120.59 on May 15th—testing the MA60 support—it rebounded strongly, confirming the intact bullish trend.

Currently, gold faces resistance at 3365 before retreating. Key support lies in the convergence of the daily MA20 and the recent low of 3280. A break below this level could see a decline toward 3250, potentially retesting the MA60 support zone.

Buying after a retracement is suggested.

Trading Recommendations

Trading direction: Buy

Entry price: 3285.00

Target price: 3490.00

Stop loss: 3195.00

Valid Until: June 10, 2025, 23:00:00

Support: 3280.00/3250.00

Resistance: 3365.84/3437.93

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Summary:

The British Pound extended gains on Monday, nearing two-week highs against the Japanese Yen as investor sentiment improved following a pause in U.S.-EU trade tensions.

BUY GBPJPY

Close Time

CLOSED

193.700

Entry Price

198.000

192.000

207.087 -0.013 -0.01%

126.1

Pips

Profit

192.000

194.961

Exit Price

193.700

Entry Price

198.000

The Pound Sterling surged toward its highest levels in nearly two weeks against the Japanese Yen on Monday, as global markets welcomed a thaw in trade tensions between the United States and the European Union. Risk sentiment improved following U.S. President Donald Trump’s decision to pause tariffs on European semiconductor exports scheduled for July 9, helping lift risk-sensitive currencies like the Pound and weigh on traditional safe havens such as the Yen.

In a light trading session, marked by a public holiday in the UK, GBP/JPY rose approximately 0.6% intraday to test the 194.20 level — a critical resistance zone that, if broken, could pave the way for a retest of the four-month high near 196.25.

Market participants attributed Monday’s rally to improving risk appetite, underpinned by easing geopolitical tensions and a lack of fresh macroeconomic data from both the UK and Japan. With no immediate domestic headwinds, the Sterling benefited from broad-based demand for higher-yielding assets, while the Yen weakened ahead of a key press conference by Bank of Japan Governor Kazuo Ueda scheduled for Tuesday.

“The pause in tariff escalation, even if temporary, is an important signal,” said a London-based currency strategist. “The EU and US together represent nearly one-third of global trade and over 40% of global GDP. A further deterioration in relations would’ve had damaging effects on the global growth outlook.”

Indeed, data from the European Council show that transatlantic trade accounts for 30% of global flows, making any signs of de-escalation a welcome development for markets increasingly concerned with geopolitical fragmentation.

Against this backdrop, the Sterling is also awaiting fresh cues later this week from Bank of England Governor Andrew Bailey, who is expected to deliver remarks on Thursday that may provide more insight into the central bank’s inflation strategy amid persistent wage and services price pressures.

Meanwhile, the Japanese Yen could find direction from Tuesday’s advanced Tokyo CPI release, which may influence the BoJ’s monetary stance. Ueda’s forward guidance will be scrutinized for any indications of a timeline on exiting negative interest rates or tapering bond purchases.

Technical Analysis

Technically, the GBP/JPY pair has continued its ascent after establishing a strong support base near 192.50, and has now pushed firmly above the 193.30 hurdle. Momentum indicators remain aligned with the bullish trend, offering positive reinforcement for the move higher.

The next upside target lies at 194.60, followed by the 23.6% Fibonacci retracement level at 195.65 — a region that could serve as the final barrier before the March peak at 198.00 is challenged.

Sustained price action above the 194.20 level would signal a potential continuation of the medium-term uptrend, particularly if underpinned by dovish BoJ rhetoric or a hawkish shift from the BoE.

TRADE RECOMMENDATION

BUY GBPJPY

ENTRY PRICE: 193.70

STOP LOSS: 192.00

TAKE PROFIT: 198.00

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Summary:

USD/CAD weakens for a fourth session as strong Canadian data boosts BoC rate hold bets, while U.S. deficit concerns deepen ahead of Trump’s controversial “One Big Beautiful Bill.”

SELL USDCAD

Close Time

CLOSED

1.37300

Entry Price

1.33200

1.40000

1.38197 +0.00050 +0.04%

49.7

Pips

Profit

1.33200

1.36803

Exit Price

1.37300

Entry Price

1.40000

The Canadian Dollar continued its bullish streak on Monday, pushing USD/CAD down to fresh two-week lows near 1.3710 during early European trading, as a slew of robust Canadian economic data reinforces expectations that the Bank of Canada will hold rates steady in June. The move extends the pair’s bearish trend, which began on May 19, and comes amid a weakening U.S. Dollar facing increasing pressure from growing concerns over the country’s ballooning fiscal deficit.

Statistics Canada reported a second consecutive monthly rise in retail sales for April, suggesting consumer resilience despite mounting global trade tensions, particularly with the United States. Combined with hotter-than-expected inflation data earlier this month, markets are now repricing the BoC’s June meeting odds, shifting away from a possible rate cut to a likely pause. This policy recalibration has lent significant support to the Canadian Dollar, at a time when the U.S. economy faces growing scrutiny.

The Bank of Canada’s policy stance contrasts sharply with the outlook in Washington, where fiscal debates are once again heating up. U.S. President Donald Trump’s proposed “One Big Beautiful Bill,” which includes tax incentives for tipped workers and auto loans on U.S.-manufactured vehicles, is slated for Senate debate following the Memorial Day holiday. The bill, though popular in some quarters, is estimated by the Congressional Budget Office (CBO) to inflate the federal deficit by $3.8 billion over the forecast period—a figure that has triggered alarm across both parties.

In an interview on CNN’s “State of the Union” on Sunday, U.S. Senator Ron Johnson warned of looming fiscal instability. “I think we have enough votes to stop the process until the President gets serious about spending reduction and reducing the deficit,” Johnson stated. “Current projections are a $2.2 trillion per year deficit—this is completely unacceptable.”

This backdrop of political friction and fiscal imbalance is weighing heavily on the U.S. Dollar. The U.S. Dollar Index (DXY), a broad gauge of the currency’s performance against major peers, slipped further on Monday to 98.90, extending its decline from the previous week. With markets increasingly skeptical of U.S. fiscal sustainability, the Greenback is underperforming against currencies backed by comparatively sound macroeconomic fundamentals—like the Canadian Dollar.

Technical Analysis

On the charts, USD/CAD has confirmed a break below key support at the 1.3760 handle—a level that had previously provided strong structural reinforcement. This breakdown follows a sustained bearish pattern, with the pair trading below its 50-period Exponential Moving Average (EMA50) and hugging a descending trendline on the short-term time frame.

The Relative Strength Index (RSI) signals continued downward momentum, remaining entrenched in bearish territory despite nearing oversold conditions. Technical analysts now view the former support zone between 1.3750 and 1.3780 as new resistance, suggesting limited scope for upside correction in the near term.

If bearish momentum persists, the next downside target lies near the 1.3320 mark—a level that coincides with a cluster of demand observed in late 2023.

TRADE RECOMMENDATION

SELL USDCAD

ENTRY PRICE: 1.3730

STOP LOSS: 1.4000

TAKE PROFIT: 1.3320

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Summary:

The Australian Dollar surged to a six-month high as U.S. fiscal concerns weigh on the Greenback, though RBA rate cut prospects and tensions with China may limit further AUD upside.

BUY AUDUSD

Close Time

CLOSED

0.65000

Entry Price

0.66000

0.64300

0.66370 -0.00013 -0.02%

70.0

Pips

Loss

0.64300

0.64299

Exit Price

0.65000

Entry Price

0.66000

The Australian Dollar extended its recent rally on Monday, reaching a fresh six-month high of 0.6537 against the U.S. Dollar, as investors grew increasingly wary of the mounting fiscal challenges facing the United States. The shift in sentiment has sparked a broad-based sell-off in the U.S. Dollar, pushing the AUD/USD pair higher despite emerging headwinds from the Reserve Bank of Australia’s dovish stance and geopolitical strains in the Asia-Pacific region.

At the heart of the Greenback’s retreat is intensifying concern over the ballooning U.S. fiscal deficit, particularly in the wake of former President Donald Trump’s proposed “One Big Beautiful Bill,” which promises sweeping tax breaks but is expected to worsen the federal budget imbalance. The bill, slated to hit the Senate floor, includes provisions for exempting tip income from taxation and extending favorable loan terms for U.S.-manufactured vehicles. According to the Congressional Budget Office (CBO), this could swell the deficit by an additional $3.8 billion.

Republican lawmakers, including Senator Ron Johnson, have begun to voice opposition to the bill in its current form, citing its inflationary risk and lack of fiscal discipline. “This is completely unacceptable,” Johnson told CNN. “Current projections are a $2.2 trillion per year deficit.”

Markets are increasingly pricing in the long-term ramifications of Washington’s fiscal trajectory. The U.S. Dollar Index (DXY) slipped below 98.70 as bond yields hovered at elevated levels, reflecting investor anxiety over the government’s capacity to rein in spending. This comes on the heels of a recent downgrade by Moody’s, which cut the U.S. sovereign credit rating from Aaa to Aa1—echoing previous actions by Fitch and S&P in recent years. Moody’s now forecasts U.S. federal debt to reach 134% of GDP by 2035, up sharply from 98% in 2023, with the budget deficit expected to swell to nearly 9% of GDP due to rising debt servicing costs, expanding entitlement programs, and weaker tax revenues.

Federal Reserve officials have remained cautious. Speaking from Tokyo, Minneapolis Fed President Neel Kashkari warned that “uncertainty is top of mind” for both the Fed and U.S. businesses, noting the risk of stagflation if tariff policies persist. Meanwhile, Chicago Fed President Austan Goolsbee and Kansas City Fed’s Jeffrey Schmid both underscored the need for data-driven policy decisions, with Schmid stating that policymakers are wary of relying too heavily on soft data amid such volatility.

Despite this macroeconomic turbulence, the AUD’s bullish momentum may soon face resistance. The Reserve Bank of Australia recently slashed interest rates by 25 basis points, and Governor Michele Bullock has left the door open for further easing should economic conditions deteriorate. Her remarks have injected a degree of caution into otherwise upbeat sentiment, suggesting that the central bank may prioritize stability over aggressive tightening in the near term.

“AUD strength is more about USD weakness than domestic conviction,” said one Sydney-based FX strategist. “Markets are hedging U.S. fiscal and policy risks, but any sharp shift in China sentiment or RBA signaling could reverse recent gains.”

Indeed, Australia’s economic ties with China—its largest trading partner—remain a critical swing factor for the currency. Diplomatic tensions flared again after the Chinese Embassy rebuked Canberra’s decision to reconsider the 99-year lease of Darwin Port to the Chinese company Landbridge, calling it “unfair and unethical.” This diplomatic spat could spill into trade discussions, potentially affecting Australian exports and, by extension, the AUD.

Adding to the geopolitical friction, China’s Ministry of Commerce last week lambasted the United States for its export restrictions on advanced semiconductor technology, accusing Washington of “unilateral bullying and protectionism.” The ministry warned that such actions threaten global supply chains and urged the U.S. to abandon its confrontational stance.

Technical Analysis

From a technical standpoint, the AUD/USD pair has broken decisively above the key resistance level at 0.6500, fueled by momentum from a strong Relative Strength Index (RSI) and price action above the 50-day exponential moving average (EMA50). Despite RSI inching into overbought territory, the bullish trend remains intact on a short-term basis.

I expect the pair to consolidate above the support zone and potentially extend gains if it clears the 161.8% Fibonacci extension level. A successful break could confirm the continuation of the upward trajectory, with the next key resistance eyed near the 0.6600 psychological level.

TRADE RECOMMENDATION

BUY AUDUSD

ENTRY PRICE: 0.6500

STOP LOSS: 0.6430

TAKE PROFIT: 0.6600

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Central Bank

Economic

Summary:

The pair recently tested resistance near both the 100-day and 200-day moving averages—areas that have repeatedly acted as strong rejection zones.

SELL AUDCAD

Close Time

CLOSED

0.89156

Entry Price

0.85700

0.90700

0.91725 -0.00012 -0.01%

24.7

Pips

Profit

0.85700

0.88909

Exit Price

0.89156

Entry Price

0.90700

Preliminary data for May from S&P Global revealed that private sector activity in Australia expanded at a more subdued pace. The composite PMI eased slightly to 50.6 from April’s 51.0, pointing to marginal growth in overall business activity. While the manufacturing PMI remained unchanged at 51.7, the services PMI edged lower to 50.5, down from 51.0 in the previous month. This combination of readings sent the AUD momentarily higher toward the key psychological barrier of 0.6450, but sellers quickly stepped in to halt the advance.

These figures paint a mixed economic picture—manufacturing continues to show resilience, but the slight loss of momentum in the services sector signals that the broader economy is maintaining stability without exhibiting robust momentum. Such conditions may allow the Reserve Bank of Australia (RBA) to adopt a more patient stance after its latest rate cut, keeping the door open for further easing should economic performance deteriorate further.

Earlier this week, the RBA reduced its Official Cash Rate (OCR) by 25 basis points to 3.85%, down from 4.10%. The central bank attributed the move to easing inflationary pressures and a more balanced risk outlook. In its accompanying statement, the RBA noted that “inflation has declined substantially from its 2022 peak,” and highlighted that “the risks to the inflation outlook are now more evenly balanced.” Despite the rate cut, the RBA maintained a cautious tone, stressing the continued uncertainty surrounding aggregate demand and supply in the current environment.

Across the Pacific, Canada’s latest retail sales data provided a mixed signal to markets. According to Statistics Canada, retail sales rose by 0.8% in March, beating expectations of a 0.7% increase and rebounding sharply from a downwardly revised -0.5% in February. However, the core retail sales figure—which excludes autos—came in much weaker than anticipated, dropping 0.7% in March compared to a 0.6% increase the previous month.

Meanwhile, crude oil prices appear to be stabilizing after retreating earlier this week from near-monthly highs. Traders remain cautious amid lingering uncertainty over U.S.–Iran nuclear negotiations, which has temporarily eased concerns of oversupply. Those concerns had been fueled by reports suggesting that OPEC+ is considering a potential production increase for July. Adding to the complexity, the odds of a June rate cut by the Bank of Canada (BoC) have diminished, supported by firmer-than-expected Canadian core inflation data released on Tuesday. Downside Pressure Builds as AUDCAD Tests Upper Channel Boundary_1

Downside Pressure Builds as AUDCAD Tests Upper Channel Boundary_1

Technical Analysis

The AUD/CAD pair continues to trade within a well-defined descending channel on the daily chart, a structure that has been in place since September of last year. The pair recently tested resistance near both the 100-day and 200-day moving averages—areas that have repeatedly acted as strong rejection zones. Once again, price appears to be turning lower from this region, suggesting that sellers may be preparing to drive the pair toward the lower boundary of the channel. A recent daily close below the 100-day moving average adds technical confirmation to the bearish scenario.

Unless the price breaks decisively above the upper boundary of the channel, the prevailing downtrend remains intact. A bullish breakout would invalidate the current bearish setup and signal a potential shift in sentiment. The Relative Strength Index (RSI) is currently at 50.84, reflecting neutral momentum. While this doesn't rule out a possible upward move, in firmly established trends, oversold conditions on higher timeframes tend to be rare, reinforcing the probability of another move lower from current levels.

Trading Recommendations

Trading direction: Sell

Entry price: 0.8915

Target price: 0.8570

Stop loss: 0.9070

Validity: Jun 04, 2025 15:00:00

Risk Warnings and Disclaimers

Add to Favorites