S&P500 (SPX) Price Analysis – May 09, 2025
Daily Price Outlook
The S&P 500 index surged by 32.66 points, or 0.58%, closing at 5,663.94, reflecting strong market optimism. This rise signals investor confidence in large U.S. companies, with expectations that global trade tensions might ease, particularly with the upcoming U.S.-China trade discussions.
S&P 500 Climbs as Investor Sentiment Improves
However, the gains in the S&P 500 were fueled by optimism surrounding the potential for a de-escalation in the U.S.-China trade conflict.
As both sides prepare to meet in Switzerland, market participants are hopeful that tariff reductions could be on the horizon.
If the U.S. and China move toward lowering additional duties, it could stimulate economic growth, particularly benefiting large multinational companies within the S&P 500. Investors are betting on these companies benefiting from a less restrictive global trade environment.
U.S. Dollar Retreats Amid Investor Caution Ahead of U.S.-China Trade Talks
While the S&P 500 rose, the U.S. Dollar experienced a retreat after earlier gains. The U.S. Dollar Index (DXY), which tracks the Greenback’s strength against six major currencies, faced selling pressure after reaching a near one-month high.
The dollar’s retreat was primarily driven by investor caution ahead of the U.S.-China trade talks over the weekend.
Despite earlier support from positive U.S.-UK trade deal news and the Federal Reserve's stance on no immediate rate cuts, the dollar’s momentum weakened as the market awaited the outcome of the high-stakes discussions.
US-China Trade Talks Offer Boost for S&P 500
Moving on, the upcoming U.S.-China trade talks in Geneva have become a key focal point for market participants.
Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet Chinese counterparts with the goal of reducing tariffs.
Hence, the positive outcomes from these discussions could lead to lower tariffs, benefiting not just the U.S. economy but also large companies listed on the S&P 500, especially those with significant business exposure to China.
Meanwhile, the progress in these talks would help to de-escalate trade tensions and could further fuel optimism for the broader market, including the S&P 500.
S&P 500 Boosted by Fed's No-Rush Approach to Rate Cuts
On the other side, the Federal Reserve's stance on interest rates also played a significant role in the S&P 500’s positive performance.
The central bank has made it clear that there is no immediate need for rate cuts, which supports investor confidence in large-cap U.S. companies.
This cautious approach by the Fed helps to mitigate concerns about economic slowdowns, particularly in light of global trade uncertainties.
S&P 500 – Technical Analysis
The S&P 500 is currently trading around 5663, holding above a critical trendline that has defined the broader uptrend since mid-March. The 50 SMA at 5630 is acting as immediate support, aligning closely with the rising trendline, reinforcing the short-term bullish structure.
However, the recent rejection near 5720, coupled with a bearish engulfing pattern, suggests a potential pullback as buyers struggle to break through this key resistance zone.
Technically, the RSI is at 53.02, showing a slight decline after briefly pushing above 60, indicating a loss of near-term momentum.
The index also formed a spinning top near 5720, reflecting market indecision. This level aligns with a key horizontal resistance, marking the upper bound of a recent consolidation range.
If prices can clear 5720, the next significant resistance stands at 5785, potentially opening the path to a broader rally. On the downside, a break below 5630 could expose the index to deeper losses, with immediate support at 5575 and a more substantial floor around 5515.
Overall, the S&P 500 remains in a cautiously bullish structure, but the recent rejection at 5720 highlights the need for a decisive breakout to confirm further upside.
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- GOLD Price Analysis – May 09, 2025
GOLD Price Analysis – May 09, 2025
Daily Price Outlook
During Friday’s trading session, the price of Gold (XAU/USD) climbed over 0.78%, reclaiming ground above the $3,330 level. The rally comes as investors largely brushed off the recently announced US-UK trade agreement, calling it an "empty shell" with limited economic impact.
This lukewarm deal failed to inspire market confidence, thereby supporting demand for the precious metal amid persistent trade policy uncertainties.
Gold Strengthens as Markets Shrug Off Weak US-UK Trade Deal
Despite claims of progress, the US-UK trade deal fell short of expectations, offering only modest improvements such as faster customs processing and better market access for US exporters.
Notably, 10% tariffs remain intact, and the UK is expected to fulfill $10 billion in Boeing purchases, according to Bloomberg.
This underwhelming agreement cast doubts over Washington’s broader trade strategy, prompting investors to seek the relative safety of gold as a hedge against future economic uncertainty.
Market analysts view the deal as a missed opportunity to form a comprehensive bilateral framework, reinforcing skepticism about upcoming negotiations with China.
Tim Waterer, Chief Market Analyst at KCM Trade, noted that "buying gold on dips is still in vogue," suggesting that investor confidence in safe-haven assets remains intact even as some traditional risk-off drivers fade.
XAU/USD Buoyed by Investor Focus on Geneva US-China Tariff Talks
All eyes now turn to Geneva, where crucial US-China tariff talks are set to begin this weekend. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will lead the discussions, with sources suggesting that the US may reduce tariffs from 145% to below 60% as an initial step—an offer Beijing could potentially match.
Any substantial progress could be followed by the implementation of tariff cuts as early as next week, Bloomberg reported.
Ahead of the talks, US President Donald Trump expressed optimism, stating that negotiations could yield “tangible progress” and even hinted at lowering existing tariffs if discussions proceed smoothly.
Meanwhile, China reiterated its stance that all unilateral tariffs must be rolled back for any serious negotiation to begin. These signals of possible de-escalation in trade tensions are contributing to gold’s appeal, as traders prepare for volatility in the days ahead.
Gold Supported by Policy Uncertainty and Hawkish Signals from Trump
President Trump’s latest comments encouraging Americans to “go out and buy stocks” have added another layer of market unpredictability.
While his remarks suggest confidence in the economic outlook, they also contrast sharply with lingering uncertainties over trade policy and central bank direction.
With safe-haven demand still present, gold remains resilient, especially amid doubts about the Fed’s next moves and potential disruptions from geopolitical developments.
Looking ahead, traders will closely monitor the Geneva summit outcome and its impact on global trade flows.
Until clearer signs of resolution emerge, gold is likely to remain supported near current levels, with the $3,330 threshold serving as a key technical pivot for short-term momentum.
GOLD (XAU/USD) – Technical Analysis
Gold is attempting to recover after finding support at $3,300, aligning with a key ascending trendline that has held since late April. This level coincides with a psychological support zone, providing a potential base for a bullish rebound.
The 50 SMA at $3,355 is acting as immediate resistance, with the next target at $3,352, followed by a more significant barrier at $3,357.
If prices can clear this zone, a move toward $3,385 is possible. However, a break below $3,300 could expose the metal to a deeper decline toward $3,273, aligning with the broader trendline support.
The RSI is currently at 46.68, indicating a neutral stance but with room for further upside if momentum picks up. The recent higher lows pattern suggests building bullish momentum, but the 50 SMA still caps near-term gains.
Notably, the recent candlestick pattern shows a mix of spinning tops and small-bodied candles, reflecting market indecision as traders await a clearer direction.
A break above $3,352 could trigger a push toward $3,385, while a drop below $3,300 risks a retest of $3,273. Traders should watch for a decisive move to confirm the next trend.
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EUR/USD Price Analysis – May 09, 2025
Daily Price Outlook
During the European trading session on Friday, the EUR/USD pair rebounded sharply to 1.1260, recovering from a more than three-week low near 1.1200 earlier in the day.
This recovery was driven by a retreat in the US dollar, which saw the US Dollar Index (DXY) correct to around 100.40 from its recent high of 100.85.
The pullback in the Greenback came amid growing caution ahead of the highly anticipated US-China trade talks scheduled for Saturday, with investors adopting a wait-and-see approach.
US-China Trade Talks in Switzerland Raise Hopes for Tariff De-escalation
However, the market is closely watching the trade negotiations between the US and China, which are set to take place in Switzerland.
These talks have significant implications for global trade, as China is the second-largest importer of US goods.
Any potential de-escalation in the ongoing trade war between Washington and Beijing could have widespread economic ramifications, particularly in light of the downward revisions in global growth projections that have stemmed from these tensions.
US Commerce Secretary Howard Lutnick expressed optimism that the tariff war would de-escalate after the talks, while also noting that reducing tariffs is a primary goal for China.
This sentiment was echoed by reports suggesting that President Trump may soon lower tariffs on China to around 50-54%, though this has not yet been confirmed by the White House.
EUR/USD Strength Driven by ECB Confidence Amid Economic Concerns
On the EUR front. the Euro’s outperformance also played a key role in pushing EUR/USD higher. Despite concerns surrounding the Eurozone's economic outlook, the Euro advanced against its peers.
European Central Bank (ECB) officials showed confidence that inflation would return to the ECB’s target of 2%, but acknowledged challenges in achieving this goal.
Finnish central bank governor and ECB policymaker Olli Rehn remarked that the inflation target might require a more accommodative monetary policy if growth conditions worsen.
Although the Euro typically underperforms when ECB officials lean towards policy easing, the current resilience in the Euro was bolstered by Rehn’s belief that inflation is on track.
However, this sentiment was tempered by concerns over the economic outlook, with Rehn suggesting that further rate cuts could be necessary to hit the ECB’s inflation target.
EU Tariff Countermeasures Against the US Heighten Geopolitical Tensions
On the flip side, the Euro also faces potential headwinds due to the ongoing tariff disputes between the US and the EU.
On Thursday, the European Commission launched a consultation paper outlining possible countermeasures against US tariffs, with the EU considering retaliatory measures on up to €95 billion of US imports.
This move comes amid heightened geopolitical risks, as any failure to resolve trade tensions between the EU and the US could have implications for the Eurozone’s inflation and growth outlook.
EUR/USD – Technical Analysis
EUR/USD has staged a sharp recovery from the $1.11990 support, forming a bullish engulfing candle that signals potential upside.
The pair is now approaching the $1.12701 pivot point, with the 50 SMA at $1.12937 acting as immediate resistance. This area aligns closely with the recent breakdown level, making it a critical test for bullish momentum.
If buyers can push through this zone, the next resistance is at $1.12809, followed by a more significant barrier around $1.13058.
Technically, the RSI is climbing from oversold levels, currently at 44.81, indicating a potential momentum shift. The recent series of higher lows adds to the bullish case, suggesting the pair may attempt a larger recovery.
However, the overall trend remains bearish, as the 50 SMA continues to cap gains, and a break below $1.12332 could expose the pair to deeper losses toward $1.11990 and $1.11683.
In the short term, a move above the 50 SMA at $1.12937 is needed to confirm a more meaningful recovery, potentially opening the door to $1.13361.
However, failure to clear this barrier could see the pair resume its broader downtrend, with the $1.11990 support acting as a critical floor.
A sustained move above $1.12701 could trigger a push toward $1.12809, while a drop below $1.12332 risks a retest of $1.11990.
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USD/JPY Price Analysis – May 08, 2025
Daily Price Outlook
During the European trading session, the USD/JPY currency pair has seen a notable uptrend, propelled by persistent JPY weakness and a series of factors, including the Federal Reserve's hawkish stance and growing optimism surrounding a potential US-China trade deal.
At the time of writing, the pair hit the 145.00, driven by the ongoing outperformance of the US Dollar, which has remained supported by the Fed’s decision to pause on rate cuts.
JPY Weakness Fueled by Geopolitical Optimism and Safe-Haven Shift
On the JPY front, the Japanese Yen's decline can be largely attributed to market optimism around US President Donald Trump's comments regarding an upcoming trade deal, which is expected to boost the US-China trade talks scheduled for later in the week.
Trump’s remarks have helped shift risk sentiment, undermining the demand for traditional safe-haven assets such as the Yen. Investors are increasingly optimistic about the potential for progress in global trade, which has translated into a weaker Yen for the second consecutive day.
Despite Trump’s cautious stance on tariff talks, his trade comments have boosted market sentiment, increasing confidence in riskier assets and putting pressure on the Yen.
This supports the ongoing strength of the USD, as the market expects the Fed to keep rates steady and avoid cuts in the near future.
Fed’s Hawkish Pause Adds to USD Strength Amid JPY Weakness
On the US front, the broad-based US dollar remains strong due to the Federal Reserve's recent hawkish signals.
The Fed’s decision to keep interest rates steady without hinting at cuts has supported the USD. Despite growing uncertainty over Trump’s trade policies, the Fed's cautious approach has helped the dollar stay strong, even amid geopolitical risks.
Hence, the Fed's hawkish pause comes as trade tariff concerns grow, with Jerome Powell acknowledging the uncertainty around trade policies.
However, Powell emphasized that the current approach is the best given the unclear global trade situation.
Therefore, this mix of strong domestic policy and optimism about trade talks has helped the USD continue its rally against the JPY.
Geopolitical Tensions and Market Uncertainty Limit JPY Losses
On the flip side, the ongoing concerns over geopolitical tensions have tempered the extent of JPY's losses. Russia and Ukraine's ongoing conflict, along with heightened instability in the Middle East, including Israel's recent military actions, have kept investors wary.
These geopolitical risks, combined with Trump’s uncertain tariff stance, have created an environment of volatility, limiting JPY’s slide and keeping the market in a state of cautious optimism.
Therefore, the Bank of Japan (BoJ) has also weighed in on the situation. The BoJ’s minutes from its March meeting indicated that the central bank remains ready to tighten policy further if inflation trends hold.
However, the BoJ expressed caution due to the global volatility stemming from US tariff policies. BoJ Governor Kazuo Ueda’s remarks on the rising food prices and the potential impact on inflation further suggest that the bank may not abandon its rate hike plans, which could help mitigate deeper JPY losses.
Looking forward, investors are closely watching US economic data, like the Weekly Initial Jobless Claims report, to gauge the economy.
The mix of the Fed's hawkish pause, trade deal optimism, and geopolitical uncertainty is likely to keep causing fluctuations in the USD/JPY pair. The US Dollar should stay strong, while the Japanese Yen remains sensitive to shifts in market sentiment.
USD/JPY – Technical Analysis
USD/JPY is trading around 144.389, maintaining its upward momentum within a well-defined ascending channel on the 1-hour chart. The pair has recently cleared the 50-period Simple Moving Average (SMA) at 143.242, reinforcing the bullish structure.
This move above the 50 SMA indicates strong buying interest, as this level often acts as a dynamic support in trending markets.
From a price action perspective, the recent candles have formed a sequence of higher lows, confirming the bullish trend.
The sharp upward move from the 143.000 region has been supported by a bullish engulfing candle, which provided the initial breakout above the 143.242 support.
This bullish momentum has carried the price towards the critical resistance at 144.640, the upper boundary of the ascending channel.
A successful break above this level could open the door to the next major resistance at 145.110, aligning with the take profit target.
Momentum indicators further support the bullish outlook. The Relative Strength Index (RSI) has surged to 69.82, indicating strong positive momentum, but without yet entering the overbought territory, suggesting room for further upside.
Additionally, the 50-period SMA remains a key support level, currently holding the bullish structure intact.
However, a failure to break above 144.640 could lead to a pullback towards the 144.002 mid-channel support or even the critical 143.424 stop loss level, where buyers are expected to re-enter aggressively.
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AUD/USD Price Analysis – May 08, 2025
Daily Price Outlook
During Thursday’s European trading session, the AUD/USD currency pair bounced back modestly, edging higher toward the 0.6450 mark after experiencing a sharp decline of over 1% in the previous session.
The rebound comes after renewed optimism surrounding US-China trade relations. In contrast to this, the modest strength in the US dollar was seen as a key factor that limits gains in the AUD/USD pair.
Fed’s Wait-and-See Approach Adds Pressure on USD but Limits AUD/USD Recovery
As widely anticipated, the Federal Reserve kept interest rates unchanged at 4.25%–4.50%, but the tone of its statement introduced renewed uncertainty. The Fed cited increased risks to both inflation and employment and emphasized a continued data-dependent approach.
Fed Chair Jerome Powell’s remarks during the press conference added to the cautious sentiment, especially when he highlighted that persistent trade tariffs could obstruct the Fed’s inflation and employment objectives well into 2025.
These comments raised concerns about policy instability and hinted that the Fed may delay future rate adjustments, pushing the US Dollar higher and capping the AUD/USD rebound.
AUD/USD Finds Support on US-China Trade Talks and China’s Economic Stimulus Plans
Despite the broader US Dollar strength, the Australian Dollar found support amid renewed optimism surrounding US-China trade relations.
Although, the upcoming high-level talks in Geneva between US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng are seen as a potential turning point in the prolonged trade conflict.
Further supporting the Australian Dollar is China’s recent announcement to cut key lending rates and reduce bank reserve requirements to stimulate growth.
These efforts by the People’s Bank of China aim to stabilize the economy and improve demand for Australian exports, particularly in the commodity sector.
RBA Rate Cut Speculation Grows Despite Ai Group Index Improvement
On the domestic front, market participants continue to price in a potential 25-basis-point interest rate cut by the Reserve Bank of Australia (RBA), which would lower the cash rate to 3.85%. This expectation persists despite a slight improvement in the Ai Group Industry Index for April.
The index, however, still marked its 33rd consecutive month of contraction, especially in export-reliant manufacturing sectors, underscoring persistent economic softness. This reinforces the belief that the RBA may act to support growth, even as external conditions gradually improve.
AUD/USD – Technical Analysis
The AUD/USD pair is currently trading around $0.64122, breaking below a critical ascending trendline that had supported the recent bullish structure. This trendline breach, combined with the drop below the 50-hour simple moving average (SMA) at $0.64670, indicates a potential bearish reversal.
The price action has formed a clear bearish engulfing candle, confirming the downward momentum, while the RSI is hovering near 36.73, signaling increasing bearish pressure but not yet oversold.
The break below the ascending trendline and 50-hour SMA signals a potential bearish continuation, with a possible sell entry below $0.64211, targeting the $0.63855 support. A protective stop-loss above $0.64436 helps manage risk in case of a bullish rebound.
Traders should watch for a potential three black crows pattern, signaling continued bearish dominance if the next few candles close lower.
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- GOLD Price Analysis – May 08, 2025
GOLD Price Analysis – May 08, 2025
Daily Price Outlook
Gold (XAU/USD) failed to stop its downward trend and slipped to $3,331, marking a 1% decline as the safe haven appeal weakened ahead of the anticipated announcement of a major trade deal between the United States (US) and the United Kingdom (UK).
Thus, the decline came after expectations of reduced uncertainty, as US President Donald Trump was set to confirm a trade deal with the UK at a 14:00 GMT news conference in Washington. Although the details of the deal were not confirmed, the UK government had already stated that an agreement would be revealed.
Gold Weakens Amid Safe Haven Outflows as Trade Deal Expectations Rise
However, the possible US-UK trade deal has pressured gold prices, as investors move away from safe-haven assets. With hopes for reduced trade tensions, markets have become more optimistic, shifting capital away from gold.
Investors are preparing for a less uncertain environment, expecting the deal to be part of a broader solution in global trade. President Trump's social media posts about the deal have also boosted optimism in the markets.
Fed’s Steady Rates and Strong US Outlook Weigh on Gold Prices
In addition to the trade deal, gold prices fell after the Federal Reserve kept interest rates between 4.25% and 4.50%. Fed Chairman Jerome Powell said the US economy remains strong but warned that the full impact of tariffs and uncertainty will be clearer later this year.
He also said the Fed isn’t in a hurry to cut rates, and markets don’t expect any cuts before summer, which made gold less attractive to investors.
Gold's Long-Term Appeal Remains Strong Amid Global Uncertainty
Despite short-term drops in gold, it remains attractive in the long run, with many hedge funds still seeing it as a safe haven due to global trade uncertainties.
Waratah Capital Advisors Ltd. has a strong position in gold, expecting more demand for it as a way to protect wealth during trade disruptions.
Investors are also looking to gold for growth as they seek to safeguard their assets amid global instability.
GOLD (XAU/USD) – Technical Analysis
Gold is trading near $3,337, struggling to hold the 50-hour simple moving average (SMA) at $3,384 after a sharp rejection from the 23.6% Fibonacci retracement level at $3,381.
The price is currently testing the 50% Fibonacci retracement at $3,325, a critical support level, with the 61.8% level at $3,301 acting as a potential next downside target if selling pressure continues.
The short-term outlook remains bearish, with a potential sell entry below $3,350 targeting $3,300, while a protective stop-loss above $3,382 reduces downside risk.
A close below the 61.8% level at $3,301 could accelerate the decline toward the $3,265 support, completing a potential three black crows pattern on lower timeframes, confirming further weakness.
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GBP/USD Price Analysis – May 07, 2025
Daily Price Outlook
During the mid-European trading hours, the GBP/USD currency pair steadied around the 1.3350 mark after a sharp upward move on Tuesday.
The pair found solid support as investors reacted positively to news that the United Kingdom and the United States are nearing a bilateral trade deal.
This development sparked optimism that a reduction in trade barriers could boost transatlantic commerce and support UK exports, particularly in steel and automobiles.
According to the Financial Times, the deal would see the US lower tariffs on UK steel and cars, while the UK would ease duties on US agricultural products and amend its digital services tax.
This mutual concession is seen as a step forward in strengthening UK-US trade ties post-Brexit and has provided the British Pound with a buffer amid global economic uncertainties.
GBP/USD Reacts Cautiously Ahead of BoE Decision and Fed’s Steady Outlook
Despite the positive trade developments, the GBP/USD pair faced mild pressure as the US Dollar gained some traction ahead of the Federal Reserve’s monetary policy announcement.
The Fed is widely expected to keep interest rates unchanged in the 4.25–4.50% range for a third consecutive meeting.
Fed Chair Jerome Powell and other officials have maintained a cautious stance, preferring to assess the economic impact of new tariff policies and elevated inflation expectations before making any adjustments.
Meanwhile, investors are closely watching the Bank of England’s upcoming policy decision, scheduled for Thursday. The BoE is expected to lower interest rates by 25 basis points to 4.25%, marking its fourth rate cut since the easing cycle began in August last year.
Market participants are especially focused on the BoE’s guidance, with speculation mounting that the central bank could adopt a more aggressive easing tone given rising global trade concerns and competitive pressures from China.
Pound Supported by Trade Hopes but Faces Pressure from Rate Cut Outlook
On the other side, the GBP remains broadly supported on the back of UK-US trade optimism, yet the growing anticipation of monetary easing by the BoE is capping further gains.
Investors worry that a global shift in supply chains—particularly an increase in Chinese exports—could hurt the competitiveness of UK products. As a result, policymakers may feel increased urgency to support the domestic economy with looser financial conditions.
Meanwhile, US-China trade discussions are also on the radar, with US officials set to meet their Chinese counterparts in Geneva later this week.
Thus, the positive breakthrough in those talks could lift broader risk sentiment, potentially providing further near-term direction for the GBP/USD pair.
GBP/USD – Technical Analysis
GBP/USD is trading near $1.3351, maintaining its recent upward momentum within a rising trendline that has supported the pair since early May.
The 50-day Simple Moving Average (SMA) at $1.3324 is providing critical dynamic support, aligning closely with the recent swing low, reinforcing the short-term bullish bias. The pair's steady climb is characterized by a series of higher lows, indicating sustained buying interest.
The recent pullback found support around the $1.3324 level, coinciding with the trendline and the 50-SMA, confirming this as a key pivot zone.
A break above the immediate resistance at $1.3385 could trigger further gains toward the next significant resistance at $1.3413, a level that aligns with a previous consolidation area. Beyond this, the $1.3442 mark represents a major swing high, acting as the next key target for bulls.
The Relative Strength Index (RSI) is currently at 55.86, suggesting mild bullish momentum with room for further upside before hitting overbought levels.
However, a break below the trendline and the $1.3324 support could expose the pair to a deeper correction, potentially targeting the next support at $1.3309, followed by the $1.3258 level.
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- GOLD Price Analysis – May 07, 2025
GOLD Price Analysis – May 07, 2025
Daily Price Outlook
During Wednesday’s session, gold (XAU/USD) pulled back from its recent gains, slipping to $3,380 as traders weighed the impact of renewed US-China trade optimism and awaited the outcome of the Federal Reserve’s policy meeting.
The yellow metal snapped a two-day winning streak as investors took profits and shifted focus to improving diplomatic signals between the world’s two largest economies.
Gold Pressured by US-China Trade Talks and Diminished Safe-Haven Demand
However, the latest retreat in gold prices was driven by fresh hopes of progress in US-China trade relations. Statements from both Washington and Beijing confirmed that trade discussions are set to resume this weekend in Switzerland.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with China’s Vice Premier He Lifeng.
Though the talks are initially aimed at de-escalating tensions rather than finalizing trade agreements, the move was interpreted as a positive step toward easing tariff-related uncertainties.
This development reduced demand for traditional safe-haven assets like gold, even amid heightened geopolitical risks in South Asia.
Reports from Pakistan indicated it had shot down five Indian fighter jets and captured soldiers in retaliation for Indian air strikes.
However, the market reaction to the military escalation was muted, as optimism surrounding trade talks took center stage, offsetting the usual bullish impact of geopolitical tensions on gold.
Traders Cautious Ahead of Fed's Interest Rate Decision Amid Political Pressure and Economic Uncertainty
Traders also remained cautious ahead of the Federal Reserve's upcoming interest rate decision scheduled for later in the day.
According to the CME FedWatch Tool, markets are pricing in a 95.6% probability that the Fed will hold rates steady.
This suggests that a rate cut would come as a significant surprise, especially amid persistent political pressure from President Donald Trump urging the central bank to ease monetary policy.
Fed officials have signaled that future decisions will be guided by data and the broader economic outlook.
With inflation still being monitored closely and the full impact of tariffs yet to be felt, policymakers appear inclined to maintain the current stance, keeping investors on edge.
GOLD (XAU/USD) – Technical Analysis
Gold is trading near $3,393, consolidating just above the 23.6% Fibonacci retracement at $3,381, a key level after its recent bullish surge.
The 50-day Simple Moving Average (SMA) at $3,302 is providing a robust support base, aligning with the 61.8% Fibonacci level at $3,301, reinforcing the bullish structure.
The recent uptrend is marked by a series of higher lows, supported by a rising trendline from late April, indicating continued buying interest.
Candlestick analysis reveals a potential Doji near the $3,393 resistance, reflecting market indecision at this critical level.
A break above this zone could pave the way for a rally toward the next resistance at $3,430, followed by the psychological $3,450 mark, aligning with the recent swing high.
However, a failure to clear this resistance could trigger a pullback toward the 38.2% Fibonacci level at $3,350, with deeper support at $3,326 and $3,302, the latter aligning with the 50-SMA.
Momentum indicators are mixed. The Relative Strength Index (RSI) is hovering near 71, suggesting overbought conditions, which may prompt short-term profit-taking.
However, the overall trend remains bullish as long as prices hold above the key support at $3,348, a critical pivot point.
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EUR/USD Price Analysis – May 07, 2025
Daily Price Outlook
During the European trading session on Wednesday, the EUR/USD pair remained flat near the 1.1370 mark, consolidating within a tight range as investors awaited the highly anticipated US Federal Reserve’s monetary policy decision. The pair's movement reflects broader market indecision, driven by both political stabilization in Europe and economic uncertainties in the US.
EUR/USD Stability Backed by German Political Clarity and Euro Strength
On the EUR front, the shared currency found some support following the confirmation of Conservative leader Friedrich Merz as Germany’s new Chancellor. Merz's successful second bid has reduced fears of political instability in the Eurozone’s largest economy.
Markets reacted positively to expectations that his leadership will advance previously approved defense spending and economic support measures, potentially strengthening the Euro and German assets.
Despite this, the Euro's upside remains capped, as the European Central Bank (ECB) is widely expected to continue its rate-cutting cycle in June. Policymakers remain focused on supporting the economy in the face of fresh trade-related shocks, particularly from the US.
ECB officials are prioritizing economic resilience over inflation concerns, especially with Eurozone inflation expected to return to the 2% target this year.
Weak EU Retail Sales and Tariff Concerns Weigh on the Euro
On the data front, the march EU Retail Sales disappointed, falling 0.1% month-on-month against expectations for flat growth.
The year-on-year figure also underperformed, growing only 1.5% versus a forecast of 1.6%, with previous data revised lower. These figures reflect slowing consumer activity, adding to concerns about Eurozone economic momentum.
Moreover, the European Commission is considering retaliatory tariffs in response to new US trade measures. EU Trade Commissioner Maros Sefcovic confirmed that Brussels is exploring countermeasures against approximately €100 billion worth of US goods if talks fail.
Although US President Trump has delayed reciprocal tariffs by 90 days, uncertainty continues to linger, limiting EUR/USD gains.
EUR/USD Awaits Fed Decision Amid US Economic Tensions and Trump Pressure
Looking forward, traders will keep a close eye on the US Federal Reserve, as markets expect interest rates to stay at 4.25%-4.50%. The CME FedWatch Tool fully prices in a pause, but traders will focus on Chair Jerome Powell’s press conference for hints about future policy.
The Fed has made it clear that there won’t be any immediate changes unless there are signs of weakness in the labor market or economic growth.
On the data front, April’s Nonfarm Payrolls (NFP) report showed steady job gains, which makes rate cuts less likely. Meanwhile, the US economy contracted by 0.3% in Q1, mainly due to a rise in imports ahead of new tariffs.
Former President Trump continues to push the Fed for rate cuts, criticizing Powell’s stance even with inflation easing in food and energy sectors, and even threatening Powell's removal.
Therefore, the Fed’s decision to keep rates steady and the mixed economic data could strengthen the US dollar, pressuring the EUR/USD pair.
EUR/USD – Technical Analysis
EUR/USD is trading around $1.1365, consolidating within a descending wedge pattern, a structure typically associated with potential bullish reversals.
The pair is testing the 50-day Simple Moving Average (SMA) at $1.1323, which has acted as dynamic support in recent sessions.
A series of higher lows on the recent bounce from the $1.1265 level suggests building bullish momentum, supported by a minor trendline connecting recent lows.
Candlestick analysis reveals a potential bullish engulfing pattern forming just above the $1.1323 support, reinforcing the bullish case.
However, the pair faces immediate resistance at $1.1380, where a bearish shooting star formed recently, indicating possible short-term selling pressure.
A break above this level could open the door to the next resistance at $1.1421, aligning with the recent swing high. Beyond this, the $1.1452 level stands as a key barrier, representing a critical psychological level for bulls.
The Relative Strength Index (RSI) is currently at 58.75, just below the 60 level, suggesting the pair has room to extend its recovery before entering overbought territory.
However, a break below the immediate support at $1.1323 could trigger a deeper pullback toward $1.1298 or even the critical $1.1265 support, aligning with the lower wedge boundary.
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AUD/USD Price Analysis – May 06, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair has pulled back from a five-month high of 0.6493, slipping to around 0.6450 level. However, this decline comes as the US dollar strengthens ahead of the Federal Reserve’s (Fed) anticipated monetary policy decision on Wednesday.
Although a pause in interest rate hikes is expected, market attention remains on Fed Chair Jerome Powell’s remarks, especially amid uncertainties surrounding trade negotiations and President Donald Trump's calls for rate cuts.
US Dollar Strengthens Amid Fed Uncertainty and Trade Negotiation Hopes
Investor sentiment surrounding the dollar has remained strong in anticipation of the Fed's upcoming policy meeting, where it is widely expected to hold rates steady.
However, market participants are focused on Powell’s comments, particularly in light of ongoing tariff-related uncertainties.
President Trump is pushing for aggressive rate cuts, urging the Fed to change policies. Treasury Secretary Scott Bessent hinted that trade deals with other countries are close, but Trump ruled out talks with China's President Xi this week. China's Commerce Ministry is reviewing US trade proposals.
On the data front, the US ISM Services PMI showed a rise to 51.6 in April, beating expectations of 50.6.
This increase is reflective of stronger demand, with the New Orders Index climbing to 52.3, signaling optimism about economic activity despite looming trade risks.
Australia Faces Rate Cut Expectations Amid Economic Recovery Signals
On the Australian front, the Australian Dollar (AUD) has gained support after Prime Minister Anthony Albanese won a second term in the 2025 Federal Election.
His victory promises a government focused on addressing cost-of-living issues, investing in renewable energy, and implementing tax cuts and healthcare reforms.
These policies are expected to aid economic recovery. However, pressure is still on the Reserve Bank of Australia (RBA) to consider rate cuts.
Meanwhile, Westpac’s CEO believes that the worst of consumer and business stress is over, supporting optimism about Australia’s economic outlook.
However, the National Australia Bank (NAB) forecasts a 50 basis point rate cut by the RBA in May, which could put downward pressure on the AUD.
AUD/USD – Technical Analysis
AUD/USD is trading just above its ascending trendline support at $0.64436, attempting to hold its recent bullish structure after forming a series of higher lows throughout early May.
The pair surged from the $0.63737 low, forming a minor ascending channel, and recently printed a bearish engulfing candle after stalling below resistance at $0.64788.
Despite that rejection, price remains supported by both the trendline and the 50-period EMA at $0.64569, with bulls defending this confluence area aggressively.
From a candlestick perspective, the current pause is characterized by a spinning top and long wicks to both sides, suggesting indecision. The RSI, currently at 43.46, shows mild bearish pressure but no divergence.
A move back above the $0.64699 pivot would tilt the structure in favor of another push higher, particularly if accompanied by a bullish engulfing or a breakout candle with volume confirmation.
Should AUD/USD hold above the $0.64436 area and break above the $0.64788 ceiling, the next major resistance lies at $0.64933, followed by $0.65151. Conversely, a break below $0.64436 would expose the pair to downside risks toward $0.64234 and $0.64193.
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