Forex Analysis & Reviews: 05.05.2025 - Could the Fed Deliver 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 Loprais Team - Official participant of the Dakar rally

05.05.2025 09:50 AM

Could the Fed Deliver a Surprise Following Its Meeting? (Possible Renewed Decline in Oil Prices and GBP/USD Pair)

The turbulence of recent months, driven by Donald Trump's actions and the release of fresh U.S. economic data, has done little to help investors understand the true direction of asset prices. This uncertainty has only increased market volatility and heightened trader anxiety.

For example, last week's statement from China's Ministry of Economy that it is ready to enter into negotiations was interpreted by markets as a light at the end of the tunnel. This news supported the continued recovery of stock indices. Talks with other major trade partners—India, Japan, and others—only fueled the fire of growing optimism. Additional supportive news came from inflation data, which showed a continued trend of slowing inflation overall.

All these factors have heightened expectations that the Federal Reserve may cut the key interest rate from 4.50% to 4.25%, if not at the current May meeting, then potentially in June. The current consensus forecast suggests the Fed will likely leave the rate unchanged at the May meeting. Fed Chair Jerome Powell may again explain this decision by referencing the ongoing uncertainty around the economic and geopolitical impact of the U.S. president's policies. However, if Powell confirms a high likelihood of mutually beneficial trade agreements—particularly with China—and resilience in the labor market and continued inflation moderation, this could drive further demand for equities and push stock indices back toward recent highs.

What to Expect in Today's Markets

I believe that in the lead-up to the Fed's May meeting, investors will behave with extreme caution. There are two main reasons for this. The first is the presence of closed-door U.S.-China trade talks. Any semi-significant news—positive or negative—could trigger sharp market reactions. Second, the Fed's policy decision. An unexpected rate cut could occur if the central bank's members, led by the Chair, assess current economic conditions as favorable for such a move.

Considering this context, I anticipate market activity to stay quiet until the Fed's decision is announced.

Daily Forecast

#CL (Crude Oil Futures)

The price of U.S. crude oil gapped lower after Saudi Arabia decided to increase oil production and exports to the global market. At the open, prices dropped by 4% before beginning a rebound, currently attempting to close the gap. Prices could likely reach the 57.80 level before reversing downward again. Given the prevailing negative sentiment, a continued decline seems more probable than a sustained rise. I consider it reasonable to sell crude oil on the rebound, around the 57.63 level, targeting a decline toward 54.00.

GBP/USD

The pair is consolidating above the strong support level at 1.3255. The anticipated rate cut at the May 8 Bank of England meeting could increase pressure on the pound and lead the pair down to 1.3140. A potential level to enter short positions on the pair is 1.3247.

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.