This article was written by Greg Michalowski at www.forexlive.com.

May is normally the strongest month for crude oil but it certainly hasn’t started out that way.

WTI crude fell another 57-cents today to bring the weekly decline to $5.50 in five straight days of selling. The weekly chart is set to post the lowest close since the week ending March 8 while the daily chart has traced out a head-and-shoulders top.

The measured target of the move is $74.

Some of the geopolitical risks are coming out of oil with reports that a ceasefire in Gaza is possible this weekend. There’s also a report about a security deal between the US and Saudi Arabia. You have to wonder if part of that deal would involve bringing back some barrels ahead of the US election.

Talk has begun to circulate about the June 1 OPEC+ decision on extending quotas beyond the end of June. The consenus is for no change and that’s what the early leaks show but it’s still very early and OPEC is tough to predict. The chance of more barrels will lead to some position squaring among longs, which have gotten a bit crowded on the way up.

Finally, economic growth signals are mixed. Today’s non-farm payrolls data and softer ISM services show the US could be slowing but at the same time there are mounting signs that China’s economy is picking up.

This article was written by Adam Button at www.forexlive.com.

As a whole for this year, traders are now looking at 40 bps worth of rate cuts. That is a step up from earlier this week, where it was roughly 31 bps. As for the timing of the first rate cut, a 25 bps move is now fully priced in for November at least. The odds of a move in September are at ~78% currently and that will be the one to watch.

The US jobs report will be the first key hurdle today followed by the ISM services PMI. Those will be two key drivers that will influence the Fed pricing above.

A move in June and July can be safely ruled out at this stage. So, all eyes will be on whether the Fed will have enough to work with to start acting in September. And if not, we’ll have to see if they might act in November instead.

In the bigger picture, I still think it’s too early to be moving on the data we’re getting today. It’s only May and what matters more will be the next few inflation data releases.

But Powell did say that they are watching for any weakness in the labour market closely. As such, the unemployment rate and the wages numbers might be the more crucial points to focus on later.

This article was written by Justin Low at www.forexlive.com.

The S&P 500 has been consolidating around the 5000-5100 range for more than two weeks now with the market awaiting the key US data as it’s getting more and more wary of the inflation risk that could lead to more tightening. The more dovish than expected Fed’s decision and Powell’s press conference led to a short term spike that got faded soon after as the focus shifted towards the US data.

Now, the big rally in Q1 was supported by rate cuts expectations and a reacceleration in economic activity that led to positive risk sentiment all around. These expectations started to collide with inflation risks after the third consecutive hot US CPI report and a hawkish repricing in interest rates expectations.

The market might keep on going up as long as the Fed remains unwilling to tighten further, but that will need to be supported by benign economic data and less inflationary risks. The first test will come today with the release of the US NFP report and the ISM Services PMI. The next will come in two weeks with the release of the US CPI on May 15th.

S&P 500 E-mini Futures Technical Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500 topped more or less with the latest US CPI release and corrected into the 5000 level with geopolitical events exacerbating the selloff. We have a good support zone around the 4835 level where we can also find the confluence of the 38.2% Fibonacci retracement level. If the market falls into that zone, it would effectively erase the entire Q1 rally. That’s also where the buyers will start to pile in more aggressively, while the sellers will look for a further break lower to target the trendline around the 4600 level.

S&P 500 E-mini Futures Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see the rangebound price action of the last two weeks. We have a strong resistance around the 5120 level and a short term support around the 5040 level. The data today will likely trigger a breakout on either side, so buckle up!

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The
recent decision by the Federal Open Market Committee (FOMC) to keep interest
rates steady has ignited a wave of speculation in financial markets.

Federal Reserve Chair, Jay Powell, provided insights into the current state of
the US economy and its trajectory. However, market reactions have been
characterized by initial unease, followed by fluctuating sentiments, reflecting
ongoing uncertainty regarding the implications of the Fed’s stance.

The
decision to maintain rates at 5.5% was accompanied by a cautionary note from
Fed policymakers, highlighting the persistent challenge of inflation. Despite
efforts to curb price growth, the Fed acknowledged limited progress in recent
months. Consequently, the central bank intends to closely monitor economic data
to determine future policy adjustments, including the possibility of rate cuts
or maintaining the current elevated levels.

In
response to the news DXY tumbled early on Thursday, diving below
106.00 to a session low of 105.44, though it’s been making solid progress
across the forex board this week, exerting pressure on rival currencies such as
the euro and the Japanese yen.

Meanwhile,
Bitcoin
experienced a notable decline following Powell’s remarks. The
cryptocurrency depreciated by 7% within a single trading session, illustrating
its sensitivity to market sentiment and policy developments. Nonetheless,
Bitcoin has shown signs of recovery, hovering around $59,000 per coin at this
writing.

Similarly,
gold prices faced downward pressure. Spot gold fell 0.9% at $2,297.39 per
ounce.

As a
non-yielding asset, gold’s appeal diminishes in a high-interest-rate
environment, contrasting with the income-generating nature of the US dollar.
Consequently, investors may reassess their asset allocation strategies,
favoring dollar-denominated assets over gold.

The
decline in gold prices follows a period of heightened volatility, during which
the precious metal surged to record highs in April. Factors such as geopolitical tensions and inflation concerns
propelled gold’s ascent. However, the recent pullback reflects shifting market
dynamics and evolving investor preferences.

Looking
ahead, market participants eagerly anticipate the release of the US non-farm payrolls report for further
insights into the US economy health. The outcome of this report is poised to
influence market sentiment and shape future decisions by policymakers.

This article was written by FL Contributors at www.forexlive.com.

If you go and ask any successful trader or investor what’s the most important thing in trading, he/she will tell you that it’s capital preservation. In fact, the hardest part in the markets is not making money, it’s being able to keep it, and over the long term increase it.

How many times have you made profits just to give them back to the market the next day, week or month? That can be very frustrating and lead to even more mistakes that eventually end in blowouts.

Now, there’s no secret formula that will give you the ability to keep the money you make and never give it back because losses are a natural part of trading. There are some advices that can help though.

One of the most important thing is to select only the trades where you have a very high conviction. Those trades where you can see almost everything stacked in your favour. When you find those opportunities, you won’t feel any fear of pulling the trigger or even risking more money. You won’t even feel the pressure of taking the trade off if the price starts to pull back.

How many times you had a trade going and at the first pullback you took the trade off leaving money on the table? That happens a lot, and even if it’s natural, most of the time it’s caused by inexperience and emotion-led mistakes.

That’s why conviction is important. The best traders/investors in the world don’t risk the same amount of money on any given trade. They size their trades based on their conviction in a particular idea.

Can you find those trades with technical analysis only? The answer is no. Technical analysis is just a risk management tool. It just shows you what happened in the past, not what might happen in the future. And the markets move based on future expectations.

You should know what moves the asset you are trading, the economic cycle you are in, the risk sentiment regime and so on. But when you really see the ball, go for it.

Will you find those opportunities often? Hell no, and that’s why you should maximise your returns when you find them. You might be thinking „that looks boring“. Yes, it is. Good trading is not fun. There is a trick though to maintain the discipline to wait for good trading opportunities while also increase the number of them: trading different asset classes.

This way not only you will find more opportunities, but you will also have a broad fundamental picture which might give you even more conviction in some ideas.

Lastly, keep learning, keep reading, keep increasing your experience. Don’t fear mistakes or failures, because they will be the best lessons. People study for years to become lawyers, doctors and so on. Trading is no different. You are joining an arena full of smart and experience poeple, so be prepared for it.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior 6.5%

No change to the jobless rate as the euro area labour market continues to hold up in light of the economic slowdown since last year. With the economy on the up now, that will be added comfort for the ECB as the impact on employment conditions have been rather minimal.

This article was written by Justin Low at www.forexlive.com.

Headlines:

• Swiss franc gains after inflation data beat
• Switzerland April CPI +1.4% vs +1.1% y/y expected
• BOJ accounts suggest Japan intervened in FX market on 1 May
• Japan top currency diplomat says cannot overlook excessive FX moves
• Eurozone Final April Manufacturing PMI 45.7 vs. 45.6 expected
• Swiss April Manufacturing PMI 41.4 vs. 45.5 expected
• Swiss March Retail Sales Y/Y -0.1% vs. 0.2% expected and 0.2% prior.
• US April Challenger layoffs 64.79k vs 90.31k prior
• OECD upgrades global growth forecast on stronger US outlook
• OPEC+ reportedly could extend voluntary cuts beyond Q2

Markets:

• CHF leads, JPY lags on the day
• European equities mixed; S&P 500 futures up 0.6%
• US 10-year yields up 1.3 bps to 4.603%
• Gold down 0.8% to $2,298.84
• WTI crude up 0.6% to $79.52
• Bitcoin up 1.9% to $58,391

The session started with renewed focus in the yen again after Japan intervened once more right after the US market close. USD/JPY was sticking around 155.70-80 before slowly tumbling down now to just under 155.00 on the day. The pair is still up from the intervention lows of 153.00 though. But it looks like Japan is starting to chip at dip buyers‘ resolve on the week.

The dollar was steadier throughout amid some light pushing and pulling. But it was the franc that saw a decent move higher with USD/CHF falling from 0.9160 to a low of 0.9100 after Swiss inflation data came in with a beat. The pair is now trading around 0.9120, still down 0.4% on the day.

Besides that, other dollar pairs saw limited movement as we get settled into the pre-NFP lull.

In the equities space, US futures are looking to bounce back after the late selling yesterday. S&P 500 futures held gains throughout the session and are seen up 0.6% now.

In other markets, gold is being pressured lower as the post-Fed jump fades in a drop under $2,300 now. Meanwhile, oil is keeping just under $80 after the slide yesterday with offers at the figure level and the 200-day moving average at $80.09 keeping a lid on things.

This article was written by Justin Low at www.forexlive.com.

Crude Oil has been falling steadily lately with analysts citing the peace deals in the Middle East. That looks like noise to me and the majority of the selloff might have been more about the combination of the de-escalation between Israel and Iran, and fears of the Fed opening the door for more tightening as that would be a headwind for demand on a forward looking basis.

Yesterday, the Fed decided to keep a neutral stance with strong pushbacks against a rate hike from Fed Chair Powell. Moreover, the US ISM Manufacturing PMI missed slightly with generally positive commentary, so the fears about some big slowdown should be set aside for the moment. This morning, we got a report saying that OPEC+ could extend the volunatry output cuts beyond Q2. Overall, the global growth impulse should continue as long as the data remains supportive and the central banks are not intentioned to hike anytime soon.

Crude Oil Technical Analysis – Daily Timeframe

On the daily chart, we can see that the price is now bouncing right around the key support zone in the $79-80 range and the long term trendline. This is where the buyers are stepping in with a defined risk below the trendline to position for a rally into the $90 region. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and start targeting the lows around the $68 level.

Crude Oil Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have another downward trendline defining the current downward momentum. Now, if the price breaks above it and continues past the $80.30 swing level, we can expect the buyers to gain more conviction and increase the bullish bets into new highs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

US-based employers announced 64,789 job cuts in April this year, which is just a little over 3% less than the year before. The sector with the most layoffs on the month was auto makers, primarily after Tesla’s announcement that it would slash 14,000 of its global workforce.

This article was written by Justin Low at www.forexlive.com.