Forex Signals Brief, May 6: Risk Off, Trump Threatens to Increase Tariffs
Arslan Butt • 2 min read
On Monday, the markets opened with huge gaps, especially the safe haven assets which priced in Trump’s threats to hike tariffs. On Sunday, Trump intensified pressure on China to reach a trade agreement by stating he will raise the US tariffs on $200 billion worth of Chinese products this week. Besides, Trump also aims to target hundreds of billions more soon.
Consequently, investors fueled the demand for safe-haven assets such as gold, silver, and Japanese Yen, which is why you can see a massive gap on gold and Japanese Yen charts. Futures markets are lower across the board with S&P contracts down over 1.6% at one point, and gold has rallied in early trade.
This week, traders will be shifting their focus to the US inflation reports after the Federal Reserve said last week that it is likely to keep interest rates unchanged for a prolonged period. Today, the investor’s focus will be on the technical trade setups, as the UK banks will be closed in observance of May Day.
Forex Signal Update
The FX Leaders Team finished a volatile week in green, marking a 60% success rate. The Chinese economic events help close AUD/USD signal in profit, while BTC/USD floats in profit.
USD/JPY – Get Ready Signal
USD/JPY has shown a lot of fluctuations during the Asian session. Risk currency pairs gapped lower with JPY crosses taking significant hits as well as the Yuan. We’ve seen a bit of a recovery since the initial move, but traders are braced for further volatility.
Technically, the gap fills itself within the same day or in the upcoming days. That’s what USD/JPY seems to do now. It’s heading upward to test the descending channel’s resistance at 110.740. Bullish crossover of this level can trigger buying until 111.180. So let’s wait and see as we already have a get ready signal for USD/JPY.
USD/JPY – 240min.
BTC made a bullish crossover on Friday at $5,765 to place a high around $6,200. Lately, the price had been stuck between $5,000 and $5,400, for some time, but the range is violated now, and Bitcoin is floating below $6,200 resistance now.
Team FX Leaders has a sell position below $6,200 level as the BTC/USD pair has formed reversal candles on the daily timeframe. The leading crypto pair is very likely to dip towards 38.2% Fibo levels of $5,750. The immediate support prevails around $5,925.
BTC – Daily