Global markets opened Thursday on edge as Washington drama grips traders. Billionaire tech mogul Elon Musk abruptly quit his Trump administration role overnight, and a U.S. court struck down most of President Trump’s controversial tariffs. These bombshell headlines have sent shockwaves through FX, with the dollar surging while equities rallying on “trade relief” optimism. In Europe, sentiment is cautious amid Italy’s confidence data today. Meanwhile, Fed minutes and looming U.S. GDP/jobless data loom in the wings. Against this volatile backdrop, EUR/USD, USD/CAD, and NZD/USD technicals warrant close attention for today’s trade setups.
EUR/USD
Technicals in Focus
EUR/USD has slid into clear bearish territory on the intraday charts. Recent candles have carved lower highs and lows as price broke below its 50-day EMA. The pair failed to hold above the 1.1290 pivot; a sharp bearish candle closed the Asian session around 1.1250 (daily close 1.1246 on May 29), confirming a downtrend. The 5-min chart shows sellers dominating – red candles eroded support zones and wiped out a short-term bullish trendline. Bears now eye the 1.1210–1.1200 area (near today’s low of 1.1211) as next support. In short, EUR/USD faces negative pressure unless bulls claw back above 1.1290.
Trading Strategy
- Entry (Short): Consider a short entry near 1.1260–1.1270 on a brief pullback (just under the 1.1290 pivot).
- Target: Aim for 1.1200 (psychological support) and potentially 1.1140 if momentum continues.
- Stop: Place a stop above the recent swing high, e.g. around 1.1300 to 1.1320, invalidating the bearish setup if broken.
USD/CAD
Technicals in Focus
USD/CAD is showing a bullish breakout on the charts. The intraday candles have climbed steadily, breaking a short-term downward bias. Notably, price pierced through the 1.3840 resistance level (today’s high ~1.3862) with a firm green candle. RSI is rising, and the pair has now cleared the 50-day EMA to reinforce buyers. Chart patterns suggest USD/CAD is attempting a breakout from last week’s range; bulls are in charge as long as price holds above the 1.3840–1.3820 zone. Near-term resistance sits around 1.3900 (recent minor highs), but the bias is skewed higher as long as USD strength persists.
Trading Strategy
- Entry (Long): Look to go long on a dip near 1.3820–1.3830 (support cluster), or on a break above 1.3860.
- Target: Initial targets around 1.3900 and 1.3950, with an aggressive secondary target near 1.4000.
- Stop: Set a stop below the recent support – e.g. 1.3790, which would invalidate the breakout if broken.
NZD/USD
Technicals in Focus
NZD/USD is at an inflection point on its chart. After reaching a 2025 high around 0.6009 last week, the pair retraced on Thursday. Candles are showing a pullback: the latest red bar dipped to about 0.5935 before finding buyers (daily close 0.5933). Economies.com notes NZD/USD is now leaning on its short-term uptrend line and 50-day EMA after overbought RSI signals. In other words, the decline appears to have paused on support. The chart suggests a potential rebound could be brewing; a bounce from the trendline (around 0.5930–0.5940) might trigger a fresh push higher toward 0.6000 again.
Trading Strategy
- Entry (Long): Consider buying NZD/USD near 0.5930–0.5940 (trendline/EMA support).
- Target: Target 0.5980 initially, then 0.6000 (recent high).
- Stop: A stop below 0.5910 is prudent – if broken, the bullish bias is negated.
Market Outlook
Volatility is likely to remain elevated. U.S. headline risk dominates: Thursday brings the initial GDP (Q1) and jobless claims at 8:30am ET, which could jolt the dollar especially since forecasts are tepid (-0.3% GDP QoQ). Any surprise in these figures will amplify moves. Also watch the U.S. Pending Home Sales release at 10:00am as a minor driver. Europe’s calendar is lighter – Italy’s business/consumer confidence at 4:00am GMT may stir EUR short-term. Ahead of Friday, traders should eye the Fed minutes (due May 28 release) and Friday’s Core PCE inflation report – the Fed’s inflation gauge – for clues on policy. Canada’s Q1 GDP (May 30) could nudge USD/CAD. Note: Switzerland and Norway observe Ascension Day today (markets holiday), so liquidity may be thinner. In sum, political news out of DC coupled with these economic releases should keep FX swings sharp in the immediate term.