ATFX Market Outlook 4th June 2025

ATFX Market Outlook 4th June 2025

Fed Strikes Cautious Tone as Markets Eye Key ADP Jobs Report Tonight

Market HighlightSeveral Federal Reserve policymakers conveyed cautious messages, indicating a wait-and-see approach. Meanwhile, data revealed a cooling U.S. labor market amid tariff-related uncertainty, with layoffs registering the largest increase in nine months. U.S. equities ended higher on Tuesday, bolstered by gains in Nvidia and other chipmakers, as investors awaited further developments in Washington's tariff discussions with trade partners. The Dow Jones fell by 0.51%, the S&P 500 rose by 0.58%, and the Nasdaq gained 0.8%.

Long-dated U.S. Treasury yields fell as markets awaited updates on tariff talks and budget negotiations, though yields slightly rebounded from intraday lows following the jobs data. The U.S. Dollar Index recovered from a six-week low, despite ongoing concerns regarding the Trump administration’s aggressive trade stance. The euro briefly reached a six-week high against the dollar before retreating.

Gold fell by nearly 1% to $3,351.98 as a stronger dollar and caution ahead of a potential Trump-China call weighed on sentiment. Oil rose by 2% to a two-week high amid Russia-Ukraine and U.S.-Iran tensions, raising concerns over prolonged OPEC+ sanctions.

Key Outlook

Tonight’s focus is on the U.S. May ADP employment report, with forecasts indicating a rebound to 110,000 from 62,000, which may alleviate labour market concerns. The Bank of Canada is also anticipated to cut rates by 25 bps to 2.50%, amid a weaker economic outlook and ongoing tariff uncertainty. Markets will watch for signs of a continued dovish stance.

Key Data and Events Today:

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

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

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

20:15 US ADP Employment Change MAY *** 

21:45 BoC Interest Rate Decision *** 

22:00 US ISM Services PMI MAY *** 

22:30 BoC Press Conference *** 

Tomorrow

02:00 Fed Beige Book *** 

09:45 CN Caixin Services & Composite PMI MAY ** 

14:00 EU German Factory Orders APR ** 

17:00 EU PPI APR ** 

20:15 ECB Interest Rate Decision *** 

20:30 US Initial Jobless Claims *** 

20:45 ECB Press Conference *** (Watch ECB Economic Outlook and Rate Path) Impact on EUR and GER30

EURUSD

· Resistance: 1.1444 / 1.1469

· Support: 1.1339 / 1.1314

EUR/USD dropped 0.6% to 1.1371 as eurozone inflation missed forecasts, fuelling ECB rate cut bets. Technically, the pair is testing support around 1.1339 and the retest zone of a broken trendline. Holding this area could trigger a rebound towards 1.1444. Tonight’s U.S. ADP jobs data (forecast: 111K) may bolster the dollar if it is strong, or support EUR/USD if it is weaker than expected.

GBPUSD

· Resistance: 1.3566 / 1.3592

· Support: 1.3481 / 1.3455

GBP/USD fell 0.2% to 1.3519 as markets await this evening’s U.S. ADP jobs report (forecast: 110K). A strong reading may boost the dollar. In the UK, attention is on BoE speakers and gilt auctions. From a technical perspective, the pair remains above trendline support; a break above 1.3566 could indicate further gains.

USDJPY

· Resistance: 144.68 / 145.29

· Support: 143.21/142.73

USD/JPY rose 0.9% to 144.00, bolstered by dollar strength and safe-haven flows. From a technical perspective, the pair may test key resistance at 144.68–145.29. A confirmed breakout above this resistance could target higher levels, while a rejection may prompt a pullback toward 143.21 and the trendline support. Tonight’s U.S. ADP jobs report will serve as a key driver, with strong data potentially further boosting the dollar.

US Crude Oil Futures (JULY)

· Resistance: 63.82/ 64.31

· Support: 62.56/ 62.19

WTI crude rose by approximately 2% to $63.41 amidst geopolitical tensions (Russia-Ukraine, U.S.-Iran), raising expectations for prolonged sanctions on OPEC+ members. Technically, the price has broken above a descending trendline and is currently testing resistance between $63.80 and $64.31. A breakout could target the $65 area, while a pullback may find support in the $62.56–$62.19 range.

Spot Gold

· Resistance: 3380/3394

· Support: 3334/3320

Spot Silver

· Resistance: 34.80/34.93

· Support: 34.25/34.12

Gold retraced from a 4-week high as the USD strengthened, and traders became cautious ahead of today's ADP data. Spot gold declined by nearly 1% to around $3,357. Technically, the price broke out of a wedge formation and retested the $3,334 support level before rebounding. Staying above $3,380 maintains the focus on resistance at $3,394, with further upside potential if that level is breached.

Dow Futures

· Resistance: 42843/43016

· Support: 42275/42100

The Dow Futures rose 0.51% to 42,519.64 as softer trade rhetoric bolstered optimism about avoiding a recession. Technically, the index has broken out of a converging wedge and is pushing higher. A successful retest of the 42,520 zone could pave the way for a move towards the 42,843 resistance area and potential yearly highs.

NAS100

· Resistance: 22171/22613

· Support: 21180/20729

NAS100 rose by 0.81% to 19,398.96, driven by substantial gains in AI stocks, with Nvidia climbing 2.9% and Broadcom surging 3.2% to a record high. Technically, the index remains within a rising channel and is testing resistance around 21,780. A successful retest of the lower channel boundary may pave the way for a move towards the 22,171 zone.

 BTC

· Resistance: 107714/109357

· Support: 103730/102425

Bitcoin is trading near $105,750, forming a bullish structure with key resistance at $107,714. A breakout could target $110,000, while a failure may trigger a pullback towards $103,730. Markets are awaiting tonight’s U.S. ADP jobs report (forecast: 111K). Strong data may lift the dollar and weigh on BTC, while weak data could support a breakout.

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