New Zealand’s Business NZ Performance of Services Index (PSI) was reported at 48.5 for April, down slightly from 49.1 in March. This index gauges activity in the country’s service sector, with any number below 50 signaling a decline. Forward-looking statements come with risks and uncertainties. The markets discussed here are for informational purposes only, so it’s crucial to do thorough research before making financial decisions.

Accuracy And Responsibility

FXStreet and the authors are not responsible for any errors, omissions, or losses related to this information. They do not guarantee accuracy and do not provide personalized investment advice. This article is not intended to recommend buying or selling any assets. The PSI reading of 48.5 shows that service activity in New Zealand was under pressure in April. A score lower than 50 indicates a decrease in output for the month. This is the second month in a row below that level. While the drop from March’s 49.1 is small, it highlights a continuing decline in the service sector, suggesting that weaker domestic demand is impacting non-goods-producing industries.

Economic Indicators And Implications

To understand the implications for short-term interest rate derivatives or currency pairs linked to the New Zealand dollar, we need to consider the timing and extent of any potential changes in rates. The Reserve Bank is taking a cautious approach due to persistent inflation, particularly in non-tradable goods. However, a slowdown in the service sector could lead to expectations of an earlier change in policy. Wheeler and his team at the RBNZ have emphasized the need to keep medium-term inflation expectations stable while still encouraging growth. Although inflation is above the target, indicators from surveys are showing signs of easing in the job market. This creates a growing gap between the RBNZ’s preferred policies and what the market expects. The drop in service sector activity adds to the situation. Traders should pay close attention to upcoming domestic data—especially regarding business confidence, wage growth, and inflation—since surprises in the data are becoming more important. Confidence in the next rate move is waning. While it is unlikely the RBNZ will change its stance based on one data point, a third consecutive decline in the PSI next month could be significant, especially if accompanied by weakness in the PMI. If several indicators show a downturn, the short-term rates market may adjust. Currently, there’s a noticeable gap between market predictions and central bank forecasts for the cash rate. If expectations for future rates drop, particularly in relation to AUD or USD swaps, market spreads could realign. Derivatives traders should be vigilant for flattening in the kiwi curve if the trend of contraction continues through mid-year. This scenario may create opportunities, especially around important policy meetings. Increased volatility could arise in the two-to-five-year segments of the curve if data suggests that the highest policy rates have been reached. We need to stay flexible—macro data often leads to unexpected moves this year. Even minor shifts in the service sector can have greater impacts than during expansionary periods, especially as banks navigate between fostering growth and ensuring stability. The effects are more significant than the headline figures suggest. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Federal Reserve Bank of New York President John Williams will speak at Hofstra University. However, no policy changes are expected to come from this speech. It is scheduled for 2120 GMT, which is 1720 US Eastern time. In Asia, everyone is watching China’s economic data for April. Retail sales are likely to drop compared to March. Fixed-asset investment is expected to stay the same, and industrial production is also predicted to decline, based on the April purchasing managers’ index and trade data.

Asian Economic Calendar

The Asian economic calendar outlines these expectations along with previous month or quarter results and general consensus estimates. Times are shown in GMT. This information comes from the ForexLive economic calendar, which sheds light on recent trends in the region. Williams’ speech may not change near-term monetary policy, but market participants usually pay close attention to the tone and details for hints on future thinking. His role at the New York Fed gives his comments added importance, even if nothing concrete is announced. When central bank officials speak, especially between scheduled policy decisions, it can provide indications about whether future tightening or easing may happen sooner or later. If he emphasizes inflation risks or labor market weakness, that could affect attitudes towards longer-term yields. Meanwhile, developments in Asia are important to watch this week. The Chinese data mentioned earlier present a concerning outlook. Retail sales are not rebounding as expected following seasonal patterns, indicating weak household demand. Additionally, stagnation in fixed-asset investment suggests that both public and private sectors may hesitate to increase spending due to uncertain returns. Furthermore, weaker industrial output, as shown by recent PMI surveys and trade data, raises doubts about any near-term boost to manufacturing from external demand.

Economic Momentum Reflection

These data trends show an economy struggling with a lack of domestic growth. For those trading futures and options tied to regional assets, these developments indicate relative weakness in economic activity, which could affect strategies involving Asian equity indexes or currency volatility, especially with the yuan facing pressure from differing policies. While Williams’ remarks may not shift the market on their own, the broader backdrop of slow economic progress in China reminds us to keep an eye on upcoming inflation reports from both sides of the Pacific. It’s often not the main reports that shape sentiment—revisions and secondary trends can lead to changes in global rates and FX markets, especially when disinflation creates uncertainty around carry trades. This does not mean immediate reversals or major adjustments, but it helps us understand which instruments might be more sensitive to global sentiment. Making clear positioning now is more crucial than usual, especially as economic surprises from China continue to disappoint early-year expectations. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Bloomberg reported that Binance and Kraken were targets of hacking attempts similar to those faced by Coinbase. These attacks might have led to some loss of customer data. Reports are mixed, though. Some sources claim both Binance and Kraken were able to fend off the attacks successfully, protecting customer data. Current information indicates that there were attempts to take advantage of security weaknesses in major exchanges. These breaches align with previous attempts targeting Coinbase. These were not minor trials; they involved crafted scripts and misleading prompts designed to collect sensitive data, possibly through leaked credentials or altered user interfaces. Both Binance and Kraken felt the pressure from these attempts. Unlike Coinbase, which acknowledged its incident, Binance and Kraken say they successfully defended against the attacks. Similar situations have happened before, especially concerning API tokens and recovery processes. When systems are accessible but lack central monitoring, it opens up opportunities for attacks that can bypass user alerts. Comments from Zhao’s company and Powell’s team show confidence in their defenses. They deserve credit for keeping their systems secure against targeted intrusions. However, third-party analyses of user behavior during the attacks reveal unusual login patterns that haven’t been linked to specific accounts. This introduces uncertainty—not about stolen funds, but about the extent of the attackers’ presence. In the short term, we shouldn’t feel fear but rather focus on precision. The real issue isn’t just the news itself but the uncertainty surrounding whether these attacks could have accessed schema-level data, session logs, or device fingerprints. These details remain hidden from the average user. Given the nature of the attacks, future attempts might explore new angles, like wallet integrations or automated trading tools that do not always require manual session limits. These aren’t protected by the same security measures as customer-facing applications. Moving forward, we need to analyze data from these events to understand potential future risks, not just past ones. Recovery systems may seem effective when everything is working, but they only show their true value during crises. If backend processes are too trusting, just enforcing stronger password rules won’t fix the flaw. Volatility products linked to these exchanges won’t adjust their risk assessments based on data loss in real-time. That’s beyond their scope. Instead, pricing shifts may occur as indirect consequences. Platforms based on margin rather than asset storage often highlight disruptions first. This is where tightening spreads or slippage is noticed early on. It’s easy to misjudge what attackers truly want. Typically, money isn’t their primary goal. They often seek to understand internal routing, identify caching flaws, or develop scripts that can fool identity checks at deeper levels—far more valuable than stolen coins, as they avoid triggering alarms. Events like these are tests of clarity and typically increase pressure on everyone else for weeks to come.

here to set up a live account on VT Markets now

The Japanese yen and euro have both increased in early foreign exchange trading on Monday, following a weekend filled with unsettling news that impacted market confidence. UK Prime Minister Starmer is expected to announce a new Brexit deal, while Australian Prime Minister Albanese is open to a free trade agreement with Europe. ECB President Lagarde states that the rise in the euro against the dollar is justified due to uncertainty and declining confidence in US policies. ECB officials are cautious about potential interest rate cuts, with some believing that cuts may soon be coming to an end. A significant event this weekend was Moody’s downgrade of the United States’ credit rating from ‘AAA’ to ‘Aa1.’ This marks the first change in Moody’s perfect US credit rating since 1917, citing rising deficits and interest costs as key reasons. In Romania, centrist candidate Nicușor Dan is leading the presidential election with 54.3% of the votes counted, which is seen positively for Europe as he supports the EU and NATO. Additionally, former President Joe Biden has been diagnosed with “aggressive” prostate cancer. Currently, the yen and euro have both gained slightly, with USD/JPY at around 145.32. The early gains in the yen and euro indicate that traders are reacting to recent events that have disrupted a previously stable environment. This reaction is based on policy shifts, health disclosures, and recalibrations in the macroeconomic landscape. We are seeing currency strength where there is perceived stability or less vulnerability to domestic issues. While fluctuations in exchange rates are common after politically charged weekends, the combination of these events has heightened short-term volatility across key dollar pairs. Moody’s downgrade is not only historic—but it also affects bond yields and international capital flows. Increased debt servicing costs in the US, coupled with uncertain policy directions, are prompting a reevaluation of value among major currencies. Lagarde’s statements confirm that policymakers are no longer united on the need for further easing, a sentiment already reflected in short-term euro pricing. This suggests that any immediate reaction toward a more dovish stance may lack lasting support unless economic data fuels concerns about stagnation. Consequently, front-month contracts will likely remain sensitive to macroeconomic releases, particularly those from Germany and surrounding regions. Regarding the US downgrade, what matters now is how funds will reallocate. Risk models have quickly adjusted in response to the credit rating drop, leading capital to move away from assets that were previously deemed risk-free. This shift could affect short-term Treasury bills and longer-term notes, encouraging a steepening trend in the near term. Adjustments in derivative pricing connected to yield curves will be necessary based on these new expectations. Dan’s potential win in Romania is positive for European investors. His alignment with broader EU goals reduces political uncertainty in Eastern Europe. For the pricing of eastern sovereign debt, especially where values are still tight, this provides a stabilizing factor amid a generally shaky period. Biden’s health news introduces uncertainty. Health concerns, especially involving leaders of major countries, often lead to sudden adjustments in trader positions. Traders are more likely to hedge when a head of state faces serious health issues. This could increase option volatility for contracts expiring in November, especially if there’s uncertainty about succession. The rise of EUR/USD is more than just verbal commentary; it signals a broader reassessment of political stability. While this rally may not last forever, dollar-long positions must recognize that resistance to upward movements is not just technical—it’s rooted in structural factors. In conclusion, market pricing needs to incorporate a new level of risk associated with anything linked to the US. This means adjusting expectations for short-term volatility and maintaining cautious positions ahead of potential market shifts. Next week’s trading could amplify thinner market conditions, especially if liquidity remains low. Holding positions without defined hedges during these sessions carries more risk than it did just two weeks ago. In practical terms, the implied volatility for USD/JPY appears too low given recent macroeconomic disruptions. Adjustments will not happen all at once, but when they do, they may be chaotic. We’ve seen similar situations before. Staying adaptable is the best strategy.

here to set up a live account on VT Markets now

US Treasury Secretary Bessent told CNN that if trade agreements aren’t reached, tariffs will increase to a “reciprocal” level. He said that Trump warned foreign countries that if they don’t negotiate honestly, tariffs could return to their April 2 levels. Bessent pointed out that deals with 18 trading partners are in progress, but he didn’t specify when these agreements will happen. Initially, Trump’s tariffs were set to take effect on April 9, raising concerns with rates as high as 30%, 40%, and 50%. After a market drop, Trump paused the tariffs for 90 days to allow time for negotiations. This pause created an opportunity to explore discussions and possibly avoid the planned tariff increases. For those in the derivatives market, Bessent’s statements are more than just words; they set a timeline, whether explicitly or not. The mention of returning to April 2 tariffs, with rates from 30% to 50%, highlights potential cost impacts on international goods. According to Bessent, these tariffs will activate if negotiations collapse, hinting at possible future market volatility for import-heavy sectors. Even though discussions are ongoing with 18 partners and no specific dates have been provided, it suggests that timelines are still flexible. This uncertainty doesn’t indicate inactivity; instead, traders should prepare for gradual developments, likely influenced by political events rather than economic ones. Without fixed deadlines, synchronized announcements can’t be assumed. Trump’s earlier choice to halt tariffs after market reactions illustrates a tendency for responsive policies rather than preventative ones. We saw a 90-day pause after sharp market reactions, which now serves as a reference point. Moving forward, it would be unwise to expect the same level of leniency without similar backlash. This indicates a need to closely monitor shifts in momentum, especially in sectors with hedges related to industrial inputs, consumer electronics, and high-volume retail goods. We should not only anticipate policy changes but also recognize that fiscal adjustments will likely align with media coverage, not precede it. The markets revealed the story last time, and they will have to do so again. Derivatives tied to international shipping indexes, freight forwarders, and Asia-Pacific exporters face heightened risk. Some may advocate for low-delta positioning, but this approach overlooks the directional signals present in this new wave of warnings. There is a history of partially following through when diplomatic delays are made public. What Bessent didn’t say might be more significant. By avoiding a specific date or season, he creates room for unpredictability. This uncertainty pushes those with daily or weekly pricing exposure to prepare for wider fluctuations. Position management must adapt, as events are unfolding clearly enough that ignoring them could be costly, even if actual rate changes end up being more moderate. Finally, even paused measures can have lasting effects. Ongoing negotiations suggest movement, but not guarantees. History shows that tariffs can serve both as punishment and as bargaining tools. We see this as a time for multi-layered risk models. This approach should not only consider different sectors but also various jurisdictions. Static hedging is insufficient—understanding momentum correlation is now more crucial than relying on basic assumptions.

here to set up a live account on VT Markets now

**Market Sentiment and Stability** This weekend brought disappointing news for market confidence. UK Prime Minister Starmer is expected to reveal a new Brexit deal. In Australia, Prime Minister Albanese is ready to move forward with a free trade agreement with Europe. The European Central Bank (ECB) has been active, with President Lagarde stating that the rise of the EUR/USD is linked to uncertainty about US policy. Meanwhile, ECB Board Member Schnabel is cautious about possible rate cuts in June, and Kazaks mentions upcoming rate cuts but highlights an uncertain outlook. On Friday, Moody’s downgraded the US credit rating, impacting market sentiment, especially in currency markets tied to the USD. **Market Volatility and Liquidity** The article starts by discussing how financial markets usually behave on Monday mornings. As many Asian financial centers are still opening, trading volume is low, which can lead to sharper price changes than normal. These fluctuations might give traders a misleading sense of direction, so it’s wise to remain cautious early in the day. Currency pairs are showing only small changes from last Friday’s closing rates. This indicates no major surprises occurred over the weekend, yet it doesn’t mean the situation is calm. The EUR/USD is near 1.1186 and USD/JPY is slightly above 145. The British pound is relatively strong, trading around 1.3280, while the USD/CHF pair is at 0.8367, reflecting some pressure on the dollar. Commodity-linked currencies like AUD and NZD are a bit lower, with both pairs resting below their historical averages, suggesting investors remain cautious. Political developments are happening on both sides of the globe. In Britain, Starmer’s expected Brexit initiative has sparked early conversations and raised new uncertainties. His proposals, while not fully disclosed yet, could hint at changes in trading relationships. Though the impact isn’t immediate, such changes could influence long-term expectations around the pound’s stability and its policy alignment with Europe. Meanwhile, in Australia, Albanese has expressed a desire to finalize a trade deal with Europe, which supports risk sentiment for Australian assets. Although this is just a verbal commitment right now, it could help stabilize AUD pairs during low liquidity periods. However, real impact will require specific timelines and details. In the eurozone, the ECB’s messaging is firm but somewhat divided. Lagarde linked euro gains to less clarity about the US, while Schnabel’s caution is more concerning. Her reluctance to loosen policy in June suggests differing opinions within the governing council, raising the potential for increased volatility as more board members share their views in the coming weeks. Kazaks, while acknowledging the idea of rate cuts, emphasized that the data lacks strength, indicating traders should focus on gradual signs from macroeconomic releases rather than exact timelines. Then there’s the ratings downgrade. Moody’s decision to lower the US credit outlook last week could influence the dollar’s moves, especially against safer currencies like the franc and yen. The lack of yield increases following the announcement shows underlying uncertainty, with markets taking time to process this development. If this signals a crack in broader US fiscal confidence, maintaining dollar strength in the medium term may become more difficult. Given all this, it’s important not to base strategies just on headlines or assume stability. The macro backdrop is shifting in multiple directions. Risk should be managed in shorter timeframes while waiting for clearer signals. Keep a close eye on any unexpected reactions to upcoming policy announcements or trade updates. Rates are unlikely to move without reason, and thin volumes early in the week can lead to larger shifts than data alone would suggest. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The weekend started with Moody’s downgrading the US credit rating, creating a tough atmosphere for financial markets. Reactions to this downgrade have been mixed. Scott Bessent, who had pointed out the US’s fiscal trends before, now downplays the downgrade’s importance. Bessent believes that GDP growth will lower the debt-to-GDP ratio, even though the deficit is expected to exceed 7% of GDP. This shows a lack of concern for deficits among top officials. He also mentioned that Walmart would absorb some of the tariffs, which could affect its profits. Last year, Walmart had global sales of $648.1 billion and earnings of $15.5 billion, giving it a profit margin of just 2.4%. Walmart now faces challenges from tariffs on low-margin products, many made in China. Bessent also announced that Liberation Day tariffs have been reinstated for several countries. Recently, Japan delayed tariff talks until after the July elections, and agreements with other nations have not been finalized. While there are reports of progress in US-EU negotiations, there’s doubt about whether the US can maintain a 10% tariff without triggering retaliation, suggesting that the trade war is only on hold. This article highlights key developments that affect those involved in options and futures markets. The US credit rating downgrade indicates that even the world’s biggest economy can face changing risk assessments, and policy responses may be unconventional. Initial reactions—mixed and uncertain—could mean that markets have become numb to ratings changes. However, the actions of long-term fund managers may reveal a different outlook in the coming weeks. Bessent’s dismissal of the downgrade suggests he is confident that GDP growth will outpace rising debt. This perspective depends on the expectation that monetary policy won’t tighten dramatically and that inflation stays manageable. But with the deficit above 7% of GDP and no political appetite for fiscal tightening, there are doubts about how sustainable this growth really is. We should remember that when costs shift, even slightly, companies with very thin profit margins are the first to feel the strain. Walmart, with only a 2.4% margin on $648 billion in revenue, might have to either cut earnings or raise prices if tariffs are imposed. Either scenario raises inflation expectations and could influence future rate predictions. With tariffs reinstated, it appears we are returning to a protectionist approach rather than moving into a new phase. The pushback or delays from large economies like Japan—waiting until after elections—show that trade negotiation power is unevenly distributed. While there are hints of progress with European partners, the main concern is the US insistence on a minimum tariff level. Setting such a floor unilaterally could lead to friction. Markets may not be fully accounting for the risk of retaliation, especially in low-volatility situations. We are not seeing coordinated policy actions or even synchronized timelines among global economic powers. This inconsistency adds more complexity to derivative pricing, especially for hedging against cross-border risks or sector-specific downturns. Rates and commodities teams should stay alert for spikes in volatility caused by news, as simple calendar spreads might not be effective under sudden changes. While Bessent tries to frame the downgrade and tariff decisions as manageable within a strong growth narrative, it’s important not to overlook the roles of deficit financing and cost pressures. We are witnessing a blend of political timing, electoral strategies, and margin management coming together, which complicates predictions about market volatility. Be mindful that delays, particularly in fiscal or trade matters, do not mean these issues are resolved. As timelines extend, uncertainty can quietly increase.

here to set up a live account on VT Markets now

The AUD/NZD pair is currently trading around 1.0900, showing slight losses but still keeping a generally positive outlook. The key support level is just below 1.0880, while resistance is near 1.0920. While there is some selling pressure, the overall technical outlook is still encouraging, with various indicators suggesting upward movement. However, mixed short-term signals may present challenges for further gains as traders navigate changing pressures.

Bullish Structure

The bullish outlook is supported by short-term moving averages. The 20-day simple moving average (SMA), 10-day exponential moving average (EMA), and the 10-day SMA all indicate upward momentum. On the other hand, the 100-day and 200-day SMAs suggest selling pressure, pointing towards possible pullbacks if momentum slows down. Momentum indicators show mixed results. The Relative Strength Index (RSI) is around 50, indicating neutral conditions. The MACD suggests a buying trend, while the Stochastic %K and Stochastic RSI Fast indicate overbought conditions. Immediate support is expected at approximately 1.0871, with resistance levels at 1.0914, 1.0923, and 1.0945, which may hinder recovery efforts. Currently, the AUD/NZD pair is holding close to the 1.0900 level with only minor intraday losses. The overall trend leans upward, though not aggressively. At these levels, there’s no sign of a dramatic change in direction, but the mixed technical signals suggest we should be cautious in short-term trading approaches. Examining the overall price structure shows a slight preference for buying pressure. This is because the faster-moving averages, linked to short-term price movements, are rising, indicating ongoing near-term strength. Specifically, both the 20-day simple moving average and the 10-day exponential average are moving upward, confirming that recent dips are being bought. However, the decline in the 100-day and 200-day SMAs should not be overlooked. This difference between short-term and long-term trends is significant. It shows that while there is upward movement now, it may not last unless current levels become stable.

Momentum Readings

Momentum readings are somewhat unclear. The RSI remains around the midline, indicating a standoff between buyers and sellers. The MACD leans bullish, remaining above the signal line, which typically suggests underlying buying trends are intact. However, the Stochastic indicators raise red flags, as both the %K line and the fast RSI are in overbought territory. When this happens, we should be more alert for potential reversals. Support levels are present but fragile. The first support lies near 1.0871, just below the current price. If the price drops under that level, we may see action around the 1.0850 area, which aligns with recent swing points. Resistance levels are closer together, with the nearest at 1.0914, followed by levels at 1.0923 and a stronger barrier near 1.0945. This ceiling has been tough to break in recent weeks, and it’s reasonable to expect price action may struggle there again. Without renewed momentum, rallies might slow down before hitting this upper limit. There’s no urgent need to chase a bullish trend unless a clear trigger appears. It’s better to wait for a daily close above 1.0925, ideally accompanied by increased volume or confirmation from lagging indicators. On the downside, risks are limited unless sellers push prices below 1.0850 convincingly, which we haven’t seen so far. Pullbacks are part of the broader trend and shouldn’t be concerning unless they become deeper and faster. For now, we favor shorter-term strategies for more flexibility and quicker responses around support and resistance levels. The outlook is still positive, but we need to be cautious. We will closely monitor price structure and momentum readings in the upcoming sessions and will engage only when conditions align favorably. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The AUD/USD pair is currently trading around 0.6400 during European hours as traders wait for the Reserve Bank of Australia’s interest rate decision next week. The US Dollar Index remains near 101.00, having risen slightly due to mixed US economic data, while the Australian Dollar is under pressure from trade concerns and risk sentiment. The US Dollar is showing limited movement following new economic data. The University of Michigan’s Consumer Sentiment Index dropped to 50.8 in May from 52.2 in April, indicating low consumer confidence alongside rising inflation expectations. The one-year inflation forecast is up to 7.3%, and the five-year outlook increased to 4.6%.

Trade Tensions And Economic Signals

US President Donald Trump’s recent hints about tariffs add uncertainty and may deepen global trade impacts. Atlanta Fed President Raphael Bostic suggests the US could see slower growth, but not fall into recession. From a technical perspective, AUD/USD is testing support near 0.6399 and facing resistance at 0.6414, limited by mixed momentum signals. The RSI and MACD indicators suggest a neutral to mild selling trend, with short-term volatility expected. The RBA’s rate decision could significantly affect the pair’s direction as it continues to trade in a tight range, depending on whether it breaks through current resistance. As AUD/USD hovers around 0.6400, we are at a crucial point influenced by domestic issues in Australia and broader economic signals from the US. The Reserve Bank of Australia’s upcoming monetary policy announcement may shake up the tight range in which the pair has been trading. The recent downward pressure on the Aussie has stemmed from weak sentiment around commodities and trade, along with China’s slower import demand. If the RBA surprises with a hawkish approach, short positions could face a quick squeeze. However, if they remain patient, the currency may not experience much upward movement. On the US side, markets remain cautious. While the Dollar Index is moving up, there’s no strong momentum behind it. Economic sentiment from the University of Michigan highlights consumer concerns, especially with rising inflation expectations. These changes are significant, with one-year expectations jumping to 7.3% and the long-term outlook rising to 4.6%. Inflation is a real concern for consumers, which impacts market behavior.

Technical Analysis And Economic Risks

Bostic’s comments carry weight. A slowing US economy that avoids recession usually leads to range-bound behavior for the USD, especially when yields aren’t changing significantly. Traders may not feel motivated to adjust their positions unless hard inflation numbers or policy signals contradict this outlook. Expect volatility in USD pairs if the upcoming US CPI data shifts in either direction. Until then, the dollar might drift rather than trend consistently. Technically, the AUD/USD pair is stuck between short-range support and resistance with only 15 pips separating critical levels. Current indicators show indecision. The momentum hasn’t leaned strongly in either direction, consistent with a nearly flat RSI and a MACD without clear movement. This often leads to choppy intraday trading. Historically, when the RSI remains muted with a sideways MACD, breakouts tend to be sudden. Therefore, it’s risky to take strong positions without tight stop-loss measures. Risk goes beyond economic data. Trump’s recent talk of tariffs introduces new geopolitical tensions, echoing past trade war worries. Markets haven’t fully reacted, possibly viewing it as political posturing, but even early mentions of tariffs can create added caution. These risks often catch traders off guard, especially when positions are not well-hedged. In the coming sessions, pay close attention to how the AUD behaves around 0.6395–0.6415. This range has absorbed pressure from both sides. If a breakout occurs, it is unlikely to be slow. This week is not just about central bank announcements; it’s about how the pair responds to this guidance within the current market landscape. Expect low volatility to be deceiving, as sudden directional movements may be closer than anticipated. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Silver prices dropped by over 1% on Friday, finishing the week on a low note due to rising US Treasury yields. The XAG/USD pair was around $32.26, having reached highs of $32.68 earlier. The technical analysis for Silver shows it is trading within the 50 and 100-day Simple Moving Averages, which are at $32.73 and $31.88, respectively. The Relative Strength Index is flat near the neutral 50 mark, indicating that Silver lacks a clear direction.

Possible Movements and Goals

If Silver surpasses $33.00, it could aim for targets at $33.50 and $34.51. However, if it drops below $32.00, it may reach the 100-day SMA at $31.88, with lower targets at $31.65 and $31.23. Historically, Silver serves as a store of value and a medium of exchange, appealing to those diversifying their portfolios or seeking currency alternatives. Its price is driven by factors like geopolitical stability, interest rates, and US Dollar strength. Industrial demand, especially from electronics and solar energy sectors, also influences Silver prices. Economic changes in the US, China, and India play a significant role. Additionally, Gold’s performance affects Silver, as both are seen as safe-haven investments. Recently, Silver pulled back slightly after nearing recent highs, coinciding with rising US Treasury yields. Selling pressure emerged around the $32.68 level, and prices eased to about $32.26, reversing earlier week’s gains.

Key Influencers and Predictions

Currently, Silver is caught between two important moving averages—the 50-day at $32.73 and the 100-day at $31.88. The Relative Strength Index, close to 50, indicates there is no strong momentum in either buying or selling. We seem to be in a temporary pause. If Silver breaks above $33.00 with strong volume, targets at $33.50 and $34.51 might attract attention, as sellers have previously entered around those levels. However, downward pressure remains. A solid drop below $32.00 would lead us to monitor support at $31.88, with possible targets at $31.65 and $31.23 if that support fails. To understand price movements, it’s important to consider broader factors. Silver reacts to economic forces like interest rate changes, US Dollar fluctuations, and central bank activities. When yields rise, metals become less appealing, as other assets with guaranteed returns may seem more attractive. Silver is not only a safe haven; it is also vital in industrial use. Steady demand from solar panel and tech manufacturers influences prices. When production increases in nations like China or the US, Silver prices often reflect this. Currently, signals from these economies are mixed—not weak, but also not showing significant growth. Gold also impacts Silver’s movement. They usually move in tandem, with Silver following Gold’s lead. Trends indicate that if Gold shows significant movement, Silver typically reacts, especially during changes in risk sentiment after major economic data or market volatility. Next week, Silver’s price action may depend on market reactions rather than predictions. If yields rise further, prices may struggle; if yields drop, bullish traders might eye the $33 level again. We’ll closely observe Silver’s behavior around moving averages, as any significant break above or below could dictate future positioning. In practical terms, when prices fluctuate and momentum is stagnant, it’s crucial to be flexible. Reacting remains more effective than trying to predict movements unless there’s a clear trend with volume backing it. Monitoring interest rate futures, central bank statements, and manufacturing activity in key economies will provide better clarity. Timing entries and exits with technical confirmations, especially near $33 and $32, is essential. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now