A Pullback that Holds above Key Support Levels Will Lead to a Retest of the 200-day SMA

Forex

Economic

Summary:

The AUDUSD experienced a pullback on Wednesday. The Australian Composite PMI for April declined to 51.4, indicating emerging cost pressures. The AUDUSD encountered significant resistance at its 200-day SMA.

BUY AUDUSD

Close Time

CLOSED

0.64341

Entry Price

0.68000

0.62000

0.66438 +0.00055 +0.08%

17.2

Pips

Loss

0.62000

0.64169

Exit Price

0.64341

Entry Price

0.68000

Fundamentals

The preliminary readings for Australia's April PMI, released on Wednesday, indicated a sustained expansion in the private sector, thereby providing support for the Australian dollar, albeit at a decelerated pace. The Manufacturing PMI declined to 51.7 from 52.1, while the Services PMI decreased to 51.4 from 51.6. Consequently, the Composite PMI also experienced a slight dip, moving from 51.6 to 51.4.

Despite this marginal contraction, S&P Global's Jingyi Pan highlighted that domestic demand continues to serve as a "robust underpinning" for business activity, fostering further job creation across various sectors. The data suggests a solid start to the second quarter, buoyed by internal momentum despite increasing external headwinds.

However, the impact of U.S. tariffs is beginning to surface. Export performance has weakened, with manufacturers reporting "intensified cost pressures" due to exchange rate volatility.

In response, numerous companies are passing on these elevated costs to consumers, resulting in the highest increase in overall selling prices in nine months.

MARKET WATCH: We anticipate that the market will encounter considerable challenges within this environment, as investors must assess the capacity of the Australian economy to perform effectively under these conditions. This is particularly crucial given the potential ramifications of a large-scale tariff war on global trade, which may not be advantageous for Australia, primarily due to its close economic ties with China. China supplies substantial raw materials to this extensive manufacturing economy, which are utilized not only for the production of goods but also for the development of this rapidly expanding emerging market over the past few decades.

A Pullback that Holds above Key Support Levels Will Lead to a Retest of the 200-day SMA_1

Technical Analysis

The AUDUSD has staged a robust recovery following its early-month dip to a post-pandemic low of 0.5910. Currently, the bulls have breached the February peak but are encountering resistance at the 200-day SMA, positioned at 0.6470. A successful breach of this SMA could catalyze a more substantial rally.

The subsequent target is 0.6550, representing the 61.8% Fibonacci retracement from the previous year, and 0.6640. The short-term support level is identified at last week's low of 0.6270.

That being said, given the overbought daily stochastic and the presence of significant resistance levels, a temporary pullback in the AUDUSD is anticipated, potentially towards the 0.6348 level, or the 0.38 retracement at 0.6300. A hold above these levels would likely see the market resume its upward trajectory.

Trading Recommendations

Trading Direction: Buy

Entry Price: 0.6366

Target Price: 0.6800

Stop Loss: 0.6200

Valid Until: May 8, 2025 23:55:00

Support: 0.6300, 0.6274, 0.6219

Resistance: 0.6430, 0.6471, 0.6550

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

A bearish setup in GBP/USD charts further compounds the currency’s woes amid rising expectations of a Bank of England rate cut in May.

SELL GBPUSD

Close Time

CLOSED

1.33000

Entry Price

1.31500

1.34000

1.33335 +0.00023 +0.02%

100.0

Pips

Loss

1.31500

1.34008

Exit Price

1.33000

Entry Price

1.34000

The British Pound (GBP) sharply underperformed on Wednesday, sliding against most of its G10 peers after preliminary April PMI data painted a bleak picture of the United Kingdom's economic health. The latest S&P Global/CIPS flash Purchasing Managers’ Index (PMI) surprised markets by indicating a contraction in overall business activity, marking the first decline in six months and fueling growing concerns about the UK's economic trajectory.

The Composite PMI, which aggregates manufacturing and services data, plunged to 48.2 in April, sharply missing consensus expectations of 50.4 and falling from 51.5 in March. This marks the first sub-50 reading since October 2023, a level that signifies economic contraction. The data triggered immediate reactions across the FX market, with GBP falling notably against the US Dollar and Euro.

In particular, the Services PMI traditionally a pillar of the UK economy unexpectedly slipped into contraction territory at 48.9, well below the forecast of 51.3 and the previous month’s reading of 52.5. The Manufacturing PMI came in at a dismal 44.0, slightly worse than the previous 44.9, maintaining its long-standing contraction trend.

Survey respondents cited growing global economic uncertainty, weakening domestic demand, and intensifying geopolitical tensions as key drags on sentiment and output. Worryingly, forward-looking business confidence has also slumped to its lowest level in two and a half years, with companies increasingly nervous about looming recession risks in both domestic and global markets.

Adding to the grim sentiment, investors now turn their attention to UK retail sales data for March, due this Friday. Expectations are subdued, with a projected monthly decline of 0.4% after a 1.0% gain in February. Given the PMI shock, any further sign of consumer fatigue could accelerate calls for monetary policy easing.

Indeed, the Bank of England is facing mounting pressure to pivot dovish at its upcoming May policy meeting. While UK inflation has moderated—March’s CPI came in softer than anticipated—slowing wage growth is reinforcing the argument for rate cuts. According to Brightmine, a leading HR data firm, UK pay awards rose by just 3% for the fourth consecutive quarter—its slowest pace since December 2021. This cooling in labor cost pressures gives policymakers additional breathing room to stimulate growth without stoking inflationary fears.

Market pricing now shows growing conviction that a BoE rate cut is not just possible, but probable, by May—potentially making the central bank one of the first in the G10 to pivot toward easing this year.

While UK-specific factors dominate Sterling’s outlook, political developments abroad are also shaping sentiment. Former U.S. President Donald Trump, now campaigning on a hawkish economic agenda, told reporters he is “confident of finalizing bilateral trade deals with various nations soon.” Though lacking in specifics, such comments hint at a more protectionist, deal-by-deal trade policy should Trump return to office—adding to global trade uncertainty that already has UK exporters on edge.

Investors are also closely watching for the U.S. preliminary PMI prints later today, which could offer further clues about the direction of the USD and global economic momentum. Should U.S. data come in strong, it could add to Sterling’s struggles by reinforcing the Dollar’s yield advantage and safe-haven appeal.

Technical Analysis

From a technical perspective, the GBP/USD pair has formed a clear Double Top pattern on the hourly chart—one of the most reliable bearish reversal signals in classical chart analysis. The twin peaks, followed by a neckline breach, suggest a weakening bullish momentum and a likely shift toward a broader downside correction.

The neckline, previously acting as support near 1.3350, has been broken with conviction, and price is currently retesting this level as new resistance. Should the market fail to reclaim the neckline, a further slide toward the 1.3250 psychological zone and possibly 1.3150 could materialize.

Momentum indicators support the bearish case, with the Relative Strength Index (RSI) trending lower below the midline and MACD showing widening negative divergence. With market fundamentals and technicals now aligned, the path of least resistance appears skewed to the downside.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.3300

STOP LOSS: 1.3400

TAKE PROFIT: 1.3150

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

This key technical level may act as a springboard for a bullish continuation, especially since the broader trend remains upward.

BUY EURCAD

Close Time

CLOSED

1.57340

Entry Price

1.59300

1.56250

1.61182 +0.00319 +0.20%

43.9

Pips

Profit

1.56250

1.57779

Exit Price

1.57340

Entry Price

1.59300

Consumer confidence in the eurozone took a sharp hit in April, falling by 2.2 points to -16.7 in the preliminary reading, down from -14.5 in March, according to data released by the European Commission. This marks the lowest level of confidence in 17 months, dating back to November 2023. The decline was steeper than economists had expected, with market consensus anticipating a softer drop to -15.6.

The euro continues to feel pressure amid growing expectations that the European Central Bank (ECB) may lower interest rates again at its June policy meeting. Traders are now pricing in nearly a 75% chance of a rate cut in June, up from around 60% prior to the ECB's most recent decision, according to LSEG data.

Market participants will closely watch the upcoming flash PMI reports from HCOB for both the eurozone and Germany, due later on Wednesday. In the U.S., S&P Global will also release its preliminary manufacturing and services PMIs for April, which could offer further insight into global economic trends.

In its latest policy statement, the ECB reaffirmed that the disinflation process remains on track, though it carefully avoided providing any forward guidance. Instead, the central bank stressed that it would continue to assess the economic landscape “meeting by meeting,” given what it described as an environment of “exceptional uncertainty.” Much of that uncertainty, officials suggested, is rooted in the unpredictable nature of former U.S. President Donald Trump’s evolving trade policies, which continue to cast a shadow over Europe’s export-heavy economy.

During her press briefing, ECB President Christine Lagarde voiced concerns that mounting global trade tensions could hamper growth in the euro area by weakening external demand. Since exports remain a central driver of the eurozone economy, any prolonged disruption could delay recovery efforts across the region.

Further remarks from Governing Council member François Villeroy de Galhau downplayed inflationary risks tied to trade frictions, noting they may even tilt to the downside. Meanwhile, ECB policymaker Madis Müller attributed the recent 25-basis-point rate cut largely to falling energy prices and rising tariff-related pressures. He also pointed out that interest rates are no longer acting as a drag on economic activity, as underlying indicators continue to show slow but steady improvement. However, Müller cautioned that global fragmentation and the reshaping of supply chains could eventually introduce renewed inflationary pressures if production becomes increasingly localized.

Across the Atlantic, investors expect the Bank of Canada (BoC) to maintain a neutral stance on monetary policy. The BoC left interest rates unchanged at 2.75% last week amid lingering uncertainty over how Donald Trump’s new international trade policies may shape the global economic outlook.

This week, Canadian retail sales data for February—scheduled for release on Friday—will be in focus as investors seek further clarity on domestic demand conditions. Euro Slips on Weak Data, But Technical Setup Suggests a Bounce_1

Euro Slips on Weak Data, But Technical Setup Suggests a Bounce_1

Technical Analysis

EUR/CAD has pulled back from its recent high of 1.5960, reached on April 21, and is currently hovering around the 200-day moving average near 1.5665. This key technical level may act as a springboard for a bullish continuation, especially since the broader trend remains upward. If this support holds, a fresh push toward the recent highs could materialize. However, a decisive break below it may open the door for a deeper retracement, with the rising trendline near 1.5575 emerging as the next level of interest.

The Relative Strength Index (RSI) has also dropped to 28, signaling oversold conditions. This could attract buyers looking to align with the prevailing trend, making a bounce from this support zone a potential catalyst for a renewed bullish leg.

Trading Recommendations

Trading direction: Buy

Entry price: 1.5734

Target price: 1.5930

Stop loss: 1.5625

Validity: Apr 30, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This upward pressure has continued into the new trading session, boosted by Trump’s comments made after the market close.

BUY USDCHF

Close Time

CLOSED

0.82651

Entry Price

0.86200

0.80200

0.80316 -0.00139 -0.17%

21.9

Pips

Profit

0.80200

0.82870

Exit Price

0.82651

Entry Price

0.86200

In a recent press conference, U.S. President Donald Trump stated that negotiations with China were “going well,” adding that he believes a deal will eventually be reached. He clarified that while tariffs on Chinese goods would not reach as high as 145%, they also wouldn't be reduced to zero, suggesting a middle ground is likely as part of ongoing trade talks.

Trump also addressed speculation about the leadership at the Federal Reserve, stating that he has no intention of firing Fed Chair Jerome Powell, despite his frustration over persistently high interest rates. “The media likes to speculate,” Trump said. “No, I’m not planning to remove him. I would just like to see more decisive action in terms of lowering interest rates.”

The White House echoed a positive tone on trade progress, with spokesperson Karoline Leavitt noting that “the ball is moving in the right direction with China.” Meanwhile, Politico reported that U.S. officials are nearing separate trade agreements with both Japan and India, signaling a broader push to reduce global trade tensions.

Federal Reserve Governor Adriana Kugler commented Tuesday evening that given the higher-than-expected levels of U.S. import tariffs—likely to exert upward pressure on prices—the Fed should keep short-term borrowing costs steady until inflation risks show clearer signs of easing.

Minneapolis Fed President Neel Kashkari echoed those concerns, emphasizing that tariffs are acting as a headwind for economic growth and warning that it is the central bank’s responsibility to prevent these trade measures from fueling long-term inflationary pressures.

On the economic data front, U.S. manufacturing activity continued to grow in March, although signs of waning momentum emerged amid persistent global trade tensions. According to the Federal Reserve, industrial output rose 0.3% in March, in line with economists’ forecasts, following a revised 1.0% gain in February. On an annual basis, industrial production increased 1.0% in March. The manufacturing sector, which comprises roughly 10.2% of the U.S. economy, recorded an annualized expansion of 5.1% in Q1—marking a sharp rebound after contracting by 1.5% in the previous quarter.

Additionally, the Empire State Manufacturing Index saw a notable rebound in April, rising by 11.9 points to -8.1 from -20 in March. Though the index remained negative, it exceeded expectations and posted its highest reading in two months, suggesting modest signs of recovery.

Meanwhile, the recent strength of the Swiss franc against the euro has fueled speculation that the Swiss National Bank (SNB) may consider stepping into the foreign exchange markets or revisiting its stance on negative interest rates if currency appreciation continues to weigh on exports. Bullish Momentum Could Extend After Trump Comments_1

Bullish Momentum Could Extend After Trump Comments_1

Technical Analysis

USD/CHF has rebounded from levels not seen since 2015, after reaching a multi-year low of 0.8040 in the previous session. This price level triggered a strong bullish reaction, as evidenced by two consecutive bullish daily candles—one of which engulfed the prior bearish candle. This upward pressure has continued into the new trading session, boosted by Trump’s comments made after the market close, which injected a renewed bullish sentiment into the U.S. dollar.

The Relative Strength Index (RSI) also supports the possibility of further upside, having reached 18.41—deep in oversold territory. This technical setup increases the likelihood of an extended bullish correction in the near term.

Looking at the daily chart, the 100- and 200-day moving averages are positioned at 0.8866 and 0.8756 respectively, leaving significant room for a potential retracement. After recently breaking below a prolonged period of consolidation, a pullback toward the 0.50 or even the 0.618 Fibonacci retracement levels may serve as key targets to the upside.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8262

Target price: 0.8620

Stop loss: 0.8020

Validity: May 02, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

The U.S. Dollar Index (USDX) extended its decline on Tuesday, touching approximately 98.15, a level not seen since March 2022. The dollar's broad-based weakness was fueled by escalating market concerns regarding U.S. trade policies and the Federal Reserve's independence.

BUY USDX

Close Time

CLOSED

98.540

Entry Price

102.000

97.300

98.800 -0.150 -0.15%

65.0

Pips

Profit

97.300

99.190

Exit Price

98.540

Entry Price

102.000

Fundamentals

The USDX has experienced a significant decline since the escalation of global trade tensions stemming from President Trump's tariff war. The USDX has exhibited a clear bearish sequence since peaking on September 26, 2022.

The primary driver behind the dollar's weakness is the persistent public criticism of the Federal Reserve by former President Trump, which has eroded perceptions of the Fed's independence and undermined investor confidence in U.S. policy credibility.

Overnight, the USDX breached a critical support level, suggesting a potential acceleration of the downtrend. This sell-off reflects an intensification of investor selling pressure on U.S. assets as market sentiment continues to deteriorate.

Furthermore, the weaponization of the dollar, including its use to coerce other nations to abandon dollar-denominated settlements and its interference in trade through the leveraging of its dominant position, is compelling other countries to gradually move away from using the dollar for international transactions, opting for alternative currencies.

As the U.S.'s share in the global economy diminishes over time, the dollar's status as the world's primary reserve currency is increasingly under threat, a trend that appears irreversible.

Oversold Indicators May Trigger a Market Rebound_1

Technical Analysis

Technically, the quote at 99.57 (2023 low) confirms the resumption of the downtrend from 114.77 (2022 high). The short-term outlook remains bearish as long as the 101.91 resistance level holds. The next target is the 100% Fibonacci retracement of 99.57 - 114.77 at 94.97.

For the USDX, the support range near the 95.00 psychological level is particularly important, as it coincides with the long-term ascending channel support dating back to 2011.

A decisive break below the 95.00 level in the future could initially trigger a further acceleration of the medium-term decline to around 94.42. (This level may see an equivalent rebound after the end of the AB=CD pattern). More importantly, this could also signal the end of the broader uptrend that began from the 2008 low of 70.69.

Such a structural collapse would lead to sustained weakness, with a medium-term downside target in the 89.20-90.00 range, and the risk of entering a new long-term downtrend in the coming years.

Trading Recommendations

Trading Direction: Buy

Entry Price: 98.30

Target Price: 102.00

Stop Loss: 97.30

Valid Until: May 7, 2025 23:55:00

Support: 98.00, 97.95, 97.69

Resistance: 99.21, 100.30, 101.27

Risk Warnings and Disclaimers

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Eva Chen

Cryptocurrency

Summary:

he appeal of Bitcoin as a hedge against volatility in traditional markets is increasing.

SELL BTC-USDT

Close Time

CLOSED

88678.4

Entry Price

84705.0

91000.0

91429.9 +1875.1 +2.09%

2321.6

Pips

Loss

84705.0

91027.9

Exit Price

88678.4

Entry Price

91000.0

Fundamentals

Following President Trump's renewed calls for immediate Federal Reserve rate cuts, investors sought alternatives to the U.S. dollar, leading to an increase in Bitcoin's price. Trump's statements have demonstrably impacted Bitcoin's price dynamics.

Recent weak U.S. economic data has also amplified concerns about a potential economic slowdown, bolstering Bitcoin's appeal as a hedge against volatility in traditional markets.

The rise in Bitcoin's price underscores its sensitivity to macroeconomic indicators and political rhetoric. Market sentiment is also improving, with relevant indices rising to 47, matching the high of March 27. This signifies a shift from the fear zone to a neutral range, suggesting a promising outlook. Such a transition typically precedes sustained market strength following a correction.

Over the past seven days, the cryptocurrency market has risen by approximately 2%, largely consolidating. The cryptocurrency market capitalization has reached US$2.76 trillion, hitting the upper bound of the April range. Currently, it's noteworthy that the market has found support at the critical US$2.45 trillion level - a resistance level last year that later served as the launchpad for the rally that began in November.

This Tuesday, Bitcoin's price continued its ascent within the consolidation range of the previous week, around US$85,000. Currently, its price is on the verge of breaking through the prior high of US$88,878. However, before breaching this level, market quotes are being resisted by the 200-day SMA. A short-term pullback is expected.

Pullback Is Expected as Short-term Indicators Are Overbought_1

Technical Analysis

Technically, Bitcoin is currently trading within an ascending channel in the 1H timeframe, although the market is exhibiting overbought conditions. Consequently, bears will likely attempt to seize control, potentially driving a downward trend or a retracement to the US$86,410 level, or even lower, towards the US$84,765 range.

In the 1D timeframe, which represents a broader timeframe, Bitcoin's price action remains within an ascending channel. Therefore, bulls are targeting the recent sell-off's origin at US$95,223 or higher, with a long-term target of US$96,464.

Conversely, bears will aim to profit from a pullback towards the US$78,761 range or potentially lower, around US$72,595. However, given the current market sentiment, a significant bearish move appears unlikely. The market seems to be favoring only a minor correction.

Trading Recommendations

Trading Direction: Sell

Entry Price: 89000

Target Price: 84705

Stop Loss: 91000

Valid Until: May 7, 2025 23:55:00

Support: 87603, 86476, 85349

Resistance: 89052, 90018, 91092

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Kiwi rallies near 0.6000 but faces looming policy headwinds from RBNZ rate cut expectations.

BUY NZDUSD

Close Time

CLOSED

0.60002

Entry Price

0.62000

0.58700

0.57846 +0.00092 +0.16%

34.8

Pips

Loss

0.58700

0.59654

Exit Price

0.60002

Entry Price

0.62000

The New Zealand dollar continued its upward march against the US dollar on Tuesday, extending gains that began earlier this month, as mounting economic and political instability in the United States kept the greenback under pressure. The NZD/USD pair hovered near the key psychological level of 0.6000 during the early European trading session, bolstered by a combination of broad-based dollar weakness, strong domestic trade data, and technical bullish momentum. However, the rally may face near-term resistance as markets brace for a likely interest rate cut by the Reserve Bank of New Zealand (RBNZ) in May.

The current weakness in the US dollar is being driven primarily by intensifying concerns over Washington’s economic and political trajectory. A slew of recent developments has undermined investor confidence in the world’s largest economy. Chief among them is President Donald Trump’s renewed antagonism toward Federal Reserve Chair Jerome Powell, which has once again raised alarms over the central bank’s independence.

Trump’s latest barrage of criticism, delivered through his Truth Social platform, included warnings that unless the Fed slashes rates soon, the US economy could be headed for a sharp downturn. These remarks have stoked fears among market participants that the Fed could be forced into a politically motivated easing cycle, rather than one based on data-driven economic assessment.

White House economic advisor Kevin Hassett further stirred the pot by revealing that the administration is exploring legal avenues to potentially remove Powell—a move that would represent an unprecedented breach of the Fed’s autonomy and could severely damage US financial credibility.

Adding to the uncertainty are escalating trade frictions. The White House recently imposed tariffs on Chinese cargo ships docking at American ports—a decision that could disrupt global supply chains and worsen trade flows. Beijing, a major trading partner for both the US and New Zealand, has refused to back down, maintaining a hardline stance in response to Washington’s pressure tactics.

Moreover, Trump's proposal for an investigation into imports of critical minerals has sparked fears of additional tariffs, further rattling already fragile global trade dynamics. The standoff with China, especially over high-value mineral trade, has only exacerbated concerns of a protracted slowdown in global growth.

Against this backdrop of geopolitical tension, the New Zealand dollar has found some support in its robust macroeconomic fundamentals. Data released last week revealed a sharp improvement in the country’s external sector. In March, New Zealand posted a trade surplus of NZD 970 million its highest since the onset of the COVID-19 pandemic in 2020. Exports rose an impressive 19% year-on-year, while imports increased by 12%, reflecting strong domestic and international demand.

Yet, this economic strength may not be enough to keep the Kiwi buoyed for long. The RBNZ is widely expected to cut its Official Cash Rate by 25 basis points at its next policy meeting in May. Markets have already priced in a move from 3.5% to 3.25%, with further reductions anticipated later in the year, potentially bringing the rate to 2.75% by December. The dovish tilt in RBNZ policy guidance is largely in response to cooling inflation pressures and a softening housing market.

The divergence between RBNZ's easing bias and the Federal Reserve’s more hawkish posture even under political pressure could eventually weigh on the NZD, despite its current momentum.

Technical Analysis

From a technical standpoint, NZD/USD remains in an intraday bullish phase, supported by sustained trading above the 50-period Exponential Moving Average (EMA50). The pair has shown resilience since April 9, consistently posting higher lows, and managed to alleviate overbought pressures on the Relative Strength Index (RSI) without breaking trend structure.

The Kiwi recently touched a pullback support level around 0.5971, a key area that could provide another leg higher if sustained. A break below this support, however, may trigger a retracement toward the overlap support near 0.5875 a level also aligned with the 23.6% Fibonacci retracement of the recent bullish leg.

Upside targets remain intact, with the next major resistance seen at 0.6082, which coincides with the 161.8% Fibonacci extension marking a potential take-profit zone for short-term bulls.

TRADE RECOMMENDATION

BUY NZDUSD

ENTRY PRICE: 0.6000

STOP LOSS: 0.5870

TAKE PROFIT:0.6200

Risk Warnings and Disclaimers

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