Forex Analysis & Reviews: 07.05.2025 - Is It Worth Hoping for a...

Live Chat

InstaForex - Official partner of Dragon Racing

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

07.05.2025 09:28 AM

Is It Worth Hoping for a Strong Market Rally? (There is a high probability of continued growth in #SPX and #NDX)

Equity markets have improved, demand for cryptocurrencies has risen, yet gold prices dropped sharply after a local rally. Meanwhile, the U.S. dollar has remained almost unchanged against major currencies in the Forex market.

Markets continue to be driven by expectations and newsflow, having nearly stopped reacting to key economic data releases—reports that, in the pre-Trump era, would have long established solid trend formations.

News that Chinese Vice Premier He Lifeng is scheduled to meet with U.S. Treasury Secretary Scott Bessent this week to discuss tariffs and trade has revived hopes for a breakthrough in negotiations. Additional optimism came from the People's Bank of China, which plans to cut its key interest rate by 0.10% and lower reserve requirements by 0.50% to stimulate economic growth.

These developments were enthusiastically received and helped boost equity markets in Asia, potentially setting the stage for a wave of optimism in the U.S. session. A slight easing of tariff-related tensions has pressured gold, triggering profit-taking and a sharp price drop. Meanwhile, the U.S. dollar index remains stuck in a narrow range between 90 and 100 points. However, this stagnation isn't only about trade talks but also the looming Federal Reserve rate decision.

Why Has the Forex Market Stalled?

As I previously mentioned, many in the market believe that the latest inflation and labor market data in the U.S., combined with Trump's mounting pressure on the Fed to cut interest rates, could push the central bank to act as early as this May meeting. While the consensus forecast still points to the Fed holding its key rate steady at 4.50%, and Fed funds futures imply a 96% probability of that outcome, such things have changed suddenly in the past.

What Could Happen If the Fed Unexpectedly Cuts Rates by 0.25%?

Such a move would almost certainly weaken the dollar. Its index could fall to 98, and any dovish signals from Jerome Powell, such as suggesting further rate cuts if inflation continues to ease and labor market pressures persist, would amplify the dollar's bearish trend.

This scenario could also ignite a further recovery in U.S. stock indices. Cryptocurrencies would likely rally. Commodities may benefit from renewed demand expectations. However, gold might not necessarily continue rising unless new or lingering geopolitical risks emerge.

Daily Forecast:

#SPX

The CFD on the S&P 500 futures is consolidating just below the resistance level of 5655.50. Optimism around a potential trade compromise between the U.S. and China, along with the possibility of monetary policy easing by the Fed, could trigger a new rally in U.S. equity markets, pushing the contract toward 5783.00. A suitable buy level may be found at 5676.85.

#NDX

The CFD on NASDAQ 100 futures is also consolidating below resistance at 20012.0. A breakthrough in U.S.-China trade negotiations and expectations of a more dovish Fed could drive renewed demand in the U.S. stock market, possibly lifting the contract to 20609.0. The 20087.4 level could serve as an entry point for long positions.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.