ATFX Market Outlook 5th May 2025

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ATFX Market Outlook 5th May 2025

US Jobs Surprise Lifts Markets but Growth Fears Linger

Market HighlightLast Friday, the April Nonfarm Payrolls report in the U.S. surpassed expectations, indicating a resilient labor market. However, signs of slowing economic momentum, such as a contraction in Q1 GDP and rising jobless claims, raised concerns about a broader slowdown. Consequently, expectations for a June Federal Reserve rate cut were slightly reduced, despite President Trump calling for immediate easing.

The U.S. equity markets continued to rally after U.S. job data beat market expectations. Dow, S&P and Nasdaq rose 1.39%,1.47% and 1.51% respectively on Friday. The DXY index fell 0.15% to 100.03, while Treasury yields rose, with the 10-year yield up 9.1bps, reaching 4.308%. Gold prices saw significant intraday swings, closing near $3,240 amid ongoing optimism over U.S.-China trade talks, which supported safe-haven demand despite reduced rate cut expectations. OPEC+ confirmed a June output hike, and the Crude price fell on Monday's Asia trading session.

Key Outlook

Markets are quieter today due to holidays in Japan, China, and the UK, and reduced liquidity heightens volatility risks. The key focus will be on the US ISM Non-Manufacturing and S&P Services PMIs, which may shift Fed rate expectations. In Europe, the Sentix Confidence Index could impact the euro and equities. Oil prices remain sensitive ahead of the OPEC+ meeting, while any progress in US-China trade talks may boost risk appetite.

Key Data and Events Today:

Japan, China, Hong Kong, UK Holiday

16:30 EU Sentix Investor Confidence MAY **

22:00 US ISM Services PMI APR ***

Tomorrow:

Japan Holiday

09:45 Caixin Services PMI APR **

15:55 EU GERMANY Services & Composite PMI Final APR **

16:00 EU Services & Composite PMI Final APR **

16:30 GB Services & Composite PMI Final APR **

17:00 EU PPI MAR **

20:30 US Balance of Trade MAR **

EURUSD

· Resistance: 1.1345 / 1.1381

· Support: 1.1227 / 1.1190

EUR/USD slips toward 1.1300 as fears of trade tensions weigh on sentiment following Trump's proposal of 100% tariffs on foreign films. While strong US jobs data supports the dollar, markets await the ISM Services PMI for further cues. Eurozone inflation has surprised on the upside, but the ECB is still expected to cut rates by 60bps this year, which will limit the euro's upward movement. 

GBPUSD

· Resistance: 1.3312 / 1.3337

· Support: 1.3230 / 1.3205

GBP/USD hovers around 1.3260 as markets await the BoE meeting, with a 25-bps rate cut anticipated. The USD remains limited by Fed rate cut expectations despite strong NFP data. Attention now shifts to today’s ISM Services PMI and the upcoming FOMC Minutes for clearer direction.

USDJPY

· Resistance: 146.06 / 147.04

· Support: 144.10/ 143.11

USD/JPY slips to 144.60 amid a weaker dollar and Japan’s tariff stance. Despite stronger anticipated NFP, markets expect a Fed rate cut in June. The pair remains within an uptrend channel, with key support at 143.87. Holding this level could lead to a rebound toward 146.00; a break below may trigger further downside.

US Crude Oil Futures (JUNE)

· Resistance: 57.68/ 58.82

· Support: 55.11/ 53.98

WTI crude dropped sharply on Monday, falling to as low as $54.97 after OPEC+ confirmed a June output hike of 411,000 bpd. The move added to supply glut fears, pushing prices below the key $57.87 support, shifting the short-term bias to bearish. On the 4-hour chart, failure to reclaim the $57.87 level suggests a downside toward $53 or lower. However, if bulls recover and close above $57.87, WTI could retest resistance near $60.78.

Spot Gold

· Resistance: 3274/3310

· Support: 3194/3158

Spot Silver

· Resistance: 32.29/32.51

· Support: 31.79/31.57

Gold prices rise toward $3,270 as US-China trade uncertainty lingers and bets on rising Fed rate cuts increase. While strong US jobs data slightly dampens expectations for immediate easing, safe-haven demand remains robust due to unclear tariff developments. Technically, XAU/USD stays supported above $3,230, with upside potential toward $3,310 if risk sentiment deteriorates after the ISM Services PMI.

Dow Futures

· Resistance: 41931/42269

· Support: 40790/40352

Dow futures gain 1.39%, closing at 41317 on Friday, driven by better-than-expected U.S. jobs data. Investors remained cautious as they expected progress in U.S.-China trade talks and hoped for clear guidance from the Federal Reserve's policy meeting this week.

NAS100

· Resistance: 20728/21177

· Support: 19741/19307

NAS100 futures extended rally and rose by 1.51% on Friday. However, traders turned cautious ahead of possible U.S.-China trade talks and this week’s Fed meeting. The Fed is expected to keep rates unchanged due to inflation risks linked to Trump’s tariffs.

BTC

· Resistance: 96035/ 96763

· Support: 93693 / 92955

Bitcoin is pulling back to $93,000 after dropping below $95,000. Traders are cautious ahead of the Fed’s rate decision. Despite solid U.S. jobs data, ongoing U.S.-China tariff concerns keep volatility high. BTC needs to stay above the 20-day EMA to remain bullish at around $92,000; falling below could lead to a drop toward $86,000.

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