Important calendar events
The dollar edged higher last week, and the dollar index rose from 99.6 to 100.1. U.S. Treasury yields also gained strength, supporting the dollar, with the US 10-year bond yield rising from 4.24% to 4.34%.
The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate in a target range of 4.25% to 4.50%. Policymakers remained cautious and opted to keep interest rates steady under a climate of economic and inflationary conditions.
Fed Chair Jerome Powell has stated that the central bank is not hurrying to lower interest rates. This coming week, all eyes will be on the Fed interest rate decision on May 7. The Fed is expected to keep interest rates steady this week, and market participants will focus mostly on the central bank’s forward guidance. Markets are currently pricing in two more rate cuts this year, with the first rate cut in July, while a third rate cut is also considered possible.
On the data front, the April Nonfarm Payrolls report beat expectations, coming in at 177K versus 138K forecasted. The US unemployment rate remained steady at 4.2% in April as anticipated, confirming tight labor market conditions.
Wage growth held steady, with average hourly earnings rising 0.2% in April, down from 0.3% in March. The combination of robust hiring and low wage inflation leaves little urgency for the Fed to cut interest rates this month.
JOLTS job openings, however, dipped to 7.19M in March, down from 7.48M in February. Initial jobless claims rose to 241K for the week to April 25 from 223K the week before.
Advance GDP data on Wednesday for the first quarter of the year were disappointing. The US contracted by 0.3% in Q1 of 2025 against an expansion of 0.2% anticipated. The US economy had expanded by 2.4% in the final quarter of 2024, following a 3.1% expansion in the third quarter of 2024.
The ISM Manufacturing PMI dropped to 48.7 in April, down from 49.0 in March. The ISM Manufacturing PMI remained in contractionary territory with a print below the threshold of 50.0, but beat expectations of a 48.0 reading.
Headline inflation in the US rose by 2.4% year-on-year in March after rising by 2.8% in February against expectations of a 2.5% print. Monthly inflation dropped by 0.1% in March, after rising by 0.2% in February against a 0.1% rise anticipated. Core CPI, which excludes food and energy, rose by 0.1% in March, which was lower than February’s reading of 0.2% and fell below expectations of 0.3%. Annual Core CPI rose by 2.8% in March, below the 3.0% estimate, down from 3.1% in February.
Global trade war concerns have been causing turmoil in markets. Investor confidence is low, raising the appeal of safe-haven assets. The dollar, which has been traditionally considered a safe-haven asset, however, plummeted. The uncertainty of US policies and trade tariffs has undermined investor confidence in the dollar, putting its safe-haven status in question.
US President Donald Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. Concerns that US economic growth will slow down are putting pressure on the dollar, and many analysts are already expressing concerns that the US will enter recession. Markets this week will continue to focus on Trump’s economic policies and trade tariffs, a nd Trump’s statements are likely to cause volatility in the price of the dollar.
EUR/USD dropped from 1.137 to 1.129 last week, as the dollar gained strength. If the EUR/USD pair declines, it may find support at 1.077, while resistance may be encountered near 1.157.
The ECB delivered another 25-basis-point rate cut at its April meeting, lowering its main refinancing rate to 2.40%, down from 2.65%. This decision marked the seventh rate cut within a year, bringing the ECB’s interest rate to its lowest point in over two years. The central bank is intensifying its efforts to support economic growth in a fragile environment.
ECB President Christine Lagarde once again emphasized the need for a data-dependent policy going forward, keeping all options open. Lagarde described the economic outlook as highly uncertain, pointing to ongoing trade disruptions and tightening financial conditions as key risks. She noted that while inflation appears to be stabilizing near the 2% target, the broader impact of recent US tariffs is still unfolding and may weigh further on sentiment and activity.
The Euro traded lower last week as Eurozone inflation and GDP data raised expectations of another ECB rate cut in June.
Eurozone inflation data for April surprised on the upside, indicating that inflationary pressures in the EU remain sticky. Flash CPI data for April showed that headline inflation remained steady at 2.2% year-on-year, exceeding estimates of 2.1%. Core CPI, which excludes food and energy, rose to 2.7% annually in April from 2.4% in March against 2.5% anticipated.
Preliminary Flash GDP data showed that the Eurozone economy expanded by 0.4% in Q1 of 2025, exceeding expectations of 0.2% growth. The EU economy expanded by 0.2% in the final quarter of 2024 after expanding by 0.3% in the second quarter and is showing signs of slow recovery.
GBP/USD gained strength early last week, testing the 1.344 resistance but paring gains later in the week, dropping to 1.326. If the GBP/USD rate goes up, it may encounter resistance at 1.344, while support may be found near 1.270.
The Sterling was rangebound last week ahead of the highly anticipated BOE policy meeting this coming week on May 9. BOE policymakers kept interest rates steady in March, and the Official Bank Rate was maintained at 4.5%. MPC members voted 8-1 to keep rates on hold, with only one member voting for a 25-basis point rate cut.
Bank of England Governor Andrew Bailey has stated that there is a lot of uncertainty at the momen,t but still thinks that interest rates are on a declining path. The BOE currently anticipates that the British economy will grow by 0.25% in the current quarter, up from 0.1% previously.
The BOE has signaled growing confidence that inflation is coming down, but remains cautious about cutting interest rates. A rate cut this week is considered unlikely, and markets will focus mostly on the vote split and updated UK inflation forecasts. Market participants will scrutinize Bailey’s speech after the meeting carefully, looking for hints on the BOE’s policy outlook. Market expectations of future rate cuts are currently split. Market odds of a rate cut in June are still low, while a rate cut in August is priced in, depending on how quickly core inflation and wage growth cool.
Final GDP data for the fourth quarter of 2024 showed that the British economy expanded by 0.1%, matching previous estimates and following economic stagnation in the third quarter of 2024. Monthly GDP data released on Friday showed that the British economy expanded by 0.5% in February, after contracting by 0.1% in January, exceeding expectations of 0.1% growth.
Headline inflation in the UK eased to 2.6% year-on-year in March, down from 2.8% in February, against expectations of 2.7%. Monthly CPI dropped to 0.3% in March from 0.4% in February against estimates of 0.4%. Core inflation, which excludes food and energy, rose by 3.4% annually in March, slightly lower than February’s 3.5% reading.
USD/JPY rose from 143.3 to 145.9 last week as the Yen dipped after the BOJ policy decision on Thursday. If the USD/JPY pair declines, it may find support at 139.9. If the pair climbs, it may find resistance at 150.8.
The yen came under pressure last week, with USD/JPY pushing toward the 145.0 level following the Bank of Japan’s policy announcement. The BOJ left rates unchanged in April at 0.50%, as expected, but its overall tone was more dovish than anticipated. The BOJ’s slightly more cautious tone on growth and inflation reinforced the view that any further tightening is likely to be gradual.
BOJ Governor Kazuo Ueda acknowledged that while inflation remains above target for now, weaker external demand and recent trading developments have complicated the outlook. Ueda emphasized the need for flexibility moving forward, suggesting that the BOJ is not in a rush to adjust its policy settings further.
Markets anticipate that the BOJ will raise interest rates at least one more time this year, and there is a high probability of a second 25-bp rate hike within the year. The BOJ is expected to raise interest rates by approximately 75 basis points in the next two years, which will bring the central bank’s peak rate to 1.25%.
The BOJ has expressed concerns over Japan's economy, as the effect of US tariffs is likely to affect the country’s industries and economic stability. The BOJ has warned that Trump's tariffs could undermine the wage and price cycle necessary for future interest rate hikes.
On the data front, the Japanese economy expanded by only 0.6% in the final quarter of 2024 against expectations of 0.7% growth and 0.3% expansion in the third quarter.
Inflation in Japan is on the rise, raising the odds of future rate hikes and providing support for the Yen. Tokyo Core CPI rose sharply to 3.4% year-on-year in April from 2.4% in March against expectations of a 3.2% reading. National Core CPI rose to 3.2% in March from 3.%0 % in February, which was in line with expectations.
Gold prices were bearish last week, retreating further from their recent all-time high of $3,500 per ounce, closing near $3,240 per ounce on Friday. Gold prices have been trading in overbought territory and are beginning to deflate. If gold prices rise, they may encounter resistance at $3,500 per ounce, while if gold prices decline, support may be encountered near $2,970 per ounce.
Gold prices hit an all-time high of $3,500 per ounce in April, boosted by the dollar’s decline and trade war concerns. Gold prices pulled back last week, however, as strong US employment data and steady wage growth dampened hopes for near-term Fed rate cuts. Demand for safe-haven assets remains elevated, however, and gold prices are sensitive to geopolitical risks and global trading developments.
Gold prices have typically been directed by the dollar’s movement, as the competing dollar typically loses appeal as an investment when the dollar rises. The dollar edged higher last week, and the dollar index rose from 99.6 to 100.1. U.S. Treasury yields also gained strength, providing support for the dollar, with the US 10-year bond yield rising from 4.24% to 4.34%.
Global trade war concerns have been causing turmoil in markets. Investor confidence is low, raising the appeal of safe-haven assets. Trump’s tariffs are likely to raise global inflation and lower the economic outlook, promoting a risk-averse sentiment.
Gold prices are supported by rising Fed rate cut expectations. The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate in a target range of 4.25% to 4.50%.
This coming week, all eyes will be on the Fed interest rate decision on May 7. Fed Chair Jerome Powell has stated that the central bank is not in a hurry to lower interest rates, and the Fed is expected to keep interest rates steady this week. Markets are currently pricing in two more rate cuts this year, with the first rate cut in July, while a third rate cut is also considered possible.
The April Nonfarm Payrolls report last week beat expectations, coming in at 177K versus 138K forecasted. Wage growth held steady, with average hourly earnings rising 0.2% in April, down from 0.3% in March. The combination of robust hiring and low wage inflation leaves little urgency for the Fed to cut interest rates this month.
Oil prices dipped last week, and the WTI price dropped from $63.6 to $58.7 per barrel. If oil prices retreat, they may encounter support near $55.1 per barrel, while resistance may be found near $65.0 per barrel.
Oil prices slid sharply last week, with WTI settling just above $58.0 per barrel, after OPEC+ announced a second consecutive monthly production increase, adding 411,000 barrels per day in June. The move, led by Saudi Arabia, signaled a strategic shift toward reclaiming market share, even at the expense of lower prices. OPEC’s decision to raise oil output defied already softening demand and growing global economic concerns. Markets will closely monitor the upcoming OPEC+ ministerial meeting on May 28 for further guidance on output policy.
US crude oil inventories came in lower than expected last week, pushing oil prices down. US stockpiles dropped by 2.7 million barrels for the week ending April 25, against a smaller draw of 0.6 million barrels anticipated.
Oil prices are kept in check by high central bank interest rates. The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate at a target range of 4.25% to 4.50%.
This coming week, all eyes will be on the Fed interest rate decision on May 7. Fed Chair Jerome Powell has stated that the central bank is not in a hurry to lower interest rates and the Fed is expected to keep interest rates steady this week. Markets are currently pricing in two more rate cuts this year, with the first rate cut in July, while a third rate cut is also considered possible.
Bitcoin rallied last week, rising above the $97,500 level during the weekend as risk appetite improved. Bitcoin price rallied later in the week, trading above $84,000 over the weekend. If BTC price declines, support can be found at $91,500, while resistance may be encountered at $98,000.
Ethereum held steady near the $1,800 mark last week, with no major catalysts but stable demand from both institutional and retail market participants. If the Ethereum price declines, it may encounter support near $1,720, while if it increases, it may encounter resistance near $1,870.
Bitcoin traded in a relatively tight range last week, between $93,800 and $96,900, rising above the $97,500 mark over the weekend. Crypto markets showed resilience, supported by continued inflows of spot Bitcoin ETFs and an overall positive risk environment.
This coming week, traders will focus on the US Congressional hearing related to digital asset regulation on May 6, which is likely to cause volatility in crypto markets. This hearing will feature testimony from key industry figures and is expected to focus on the evolving regulatory landscape for digital assets.
Crypto markets remain under pressure from ongoing concerns that US President Donald Trump’s trade policies may start global trading wars. Trump’s tariffs are likely to raise global inflation and lower the economic outlook, promoting a risk-averse sentiment that puts pressure on crypto markets.
Trump has announced the creation of a national Bitcoin reserve, stressing his determination to make the US the crypto capital of the world. The US government will cease selling Bitcoin and will stockpile it instead as a store of value.
Cryptocurrency prices are also affected by central banks’ interest rates. High interest rates stifle economic growth, putting pressure on crypto markets. The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate in a target range of 4.25% to 4.50%.
This coming week, all eyes will be on the Fed interest rate decision on May 7. Fed Chair Jerome Powell has stated that the central bank is not in a hurry to lower interest rate,s and the Fed is expected to keep interest rates steady this week. Markets are currently pricing in two more rate cuts this year, with the first rate cut in July, while a third rate cut is also considered possible.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Written by:
Myrsini Giannouli
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