Errante’s The Week Ahead: 5^th – 9^th May 2025 

Weekly Highlights: 

• Fed is expected to hold rates; Powell’s tone could shift USD sentiment. 

• BoE may cut rates as the UK economy falters. 

• CAD jobs data expected to show a rebound. 

What Now: Central Banks in the Spotlight 

Markets brace for another high-volatility week as the Federal Reserve and Bank of England take center stage. The U.S. labor market once again defied concerns in April, with stronger-than-expected payroll growth and a steady unemployment rate reinforcing the narrative of economic resilience despite ongoing trade tensions and fiscal headwinds.  

While wage growth eased slightly, reducing immediate inflation risks, the data effectively dampened expectations for imminent Fed rate cuts and left the dollar broadly range bound. Meanwhile, China’s signal of openness to resume trade talks with the U.S. has injected optimism into global markets, lifting equities and fuelling a risk-on tone that benefited risk-sensitive currencies like AUD and NZD, while pressuring safe havens such as JPY, CHF, and gold.  

However, with unresolved geopolitical frictions and lingering tariff threats, FX and commodity markets may remain volatile as traders await clearer signals from both central banks and policymakers. 

In equities, the Dow Jones Industrial Average is attempting to reclaim its recent breakdown zone, while the US Dollar struggles to regain footing after breaking below 100 in April. The May 7 FOMC rate decision and Powell’s press conference will be the key catalyst for USD pairs. On the UK side, Thursday’s Bank of England policy decision will offer critical insight into the BoE’s balancing act between persistent inflation and stagnant growth. 

Investors should also watch Canadian and New Zealand labor market reports, and Swiss CPI data early in the week for clues on regional economic momentum. 

Bottom Line: 

The convergence of FOMC and BoE policy meetings sets the tone for a data-driven week. With inflation cooling and labor data mixed, central banks are likely to sound cautiously dovish. For traders, expect volatility around USD, GBP, and CAD pairs, while equity indices and risk sentiment react to forward guidance. 

Upcoming Data and Events (GMT+3): 

Monday 5^th May 

9:30 am – CHF CPI m/m: Swiss inflation expected to rise to 0.20%, indicating stable domestic price pressures. 

• 5:00 pm – USD ISM Services PMI: Projected at 50.2, just above expansion threshold; a key pulse check for the US services sector. 

Tuesday 6^th May 

• No high-impact events. 

Wednesday 7th May 

• 1:45 am – NZD Employment Change q/q & Unemployment Rate: Job market recovery expected; unemployment seen ticking higher to 5.30%. 

• 9:00 pm – USD Federal Funds Rate: Fed expected to hold at 4.50%; dovish tone may emerge amid softening macro data. 

• 9:00 pm – USD FOMC Statement 

• 9:30 pm – USD FOMC Press Conference: Powell’s remarks will be pivotal for dollar direction. 

Thursday 8^th May 

• 2:00 pm – GBP BoE Monetary Policy Statement & Bank Rate Decision: Rate expected to be cut to 4.25%; vote split will be closely scrutinized. 

• 3:30 pm – USD Unemployment Claims: Forecast remains elevated at 241K, signaling cooling labor market. 

Friday 9^th May 

• 11:40 am – GBP BoE Gov Bailey Speaks: Post-decision remarks could offer forward guidance. 

• 3:30 pm – CAD Employment Change & Unemployment Rate: Employment rebound expected after sharp drop in previous month. 

Market Insights: Key Charts to Watch 

AUD/CHF – Daily Chart 

Technical Outlook: 

AUD/CHF is staging a recovery after plunging to multi-year lows in April. Price is consolidating above the 61.8% Fibonacci level of 0.5297 and just below key resistance at 0.5340. RSI is neutral around 51 and MACD has crossed bullishly above the signal line, suggesting upward momentum. 

Key Levels: 

• Resistance: 0.5340, 0.5372, 0.5411 

• Support: 0.5297, 0.5226 

Bias:  

Bullish above 0.5297; watch for breakouts toward 0.5411. 

US30 (Dow Jones) – Daily Chart 

Technical Outlook:  

The Dow has broken above the last market top at 40,915 and is testing 41,233 resistance. RSI at 55 indicates room to climb, and MACD is positive, hinting at continuation toward 127.2% extension at 41,756. A failure to hold above 41,000 may lead to a pullback. 

Key Levels: 

• Resistance: 41,233, 41,756, 42,827 

• Support: 40,915, 39,733 

Bias:  

Bullish while above 40,915; trend resumption possible. 

Errante’s Weekly Newsletter brings you critical market insights to keep you ahead in the financial world. Stay informed and make strategic decisions with Errante. 

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