When you dive into the world of cryptocurrency, you’ll encounter many new terms and metrics. One important measure is the Average Buy Profit (ABP), which helps you understand how profitable your investments are. The ABP shows the profit on a token based on its average purchase price. For example, if you buy Ethereum at $2,000 and again at $3,000, your average purchase price becomes $2,500. If Ethereum’s price then rises to $3,500, the ABP is $1,000 profit per token. ABP also offers insights into market sentiment. A positive ABP means a bullish market—tokens bought at lower prices are now making a profit. On the other hand, a negative ABP indicates a bearish sentiment, where tokens bought at higher prices could lead to losses. ABP charts use green and red bars to display profit and loss scenarios. Recent data on Ethereum shows that there were profit-taking actions early in the week, followed by losses midweek, and then a recovery later on, which indicates changes in the market. Ethereum’s current condition is linked to Bitcoin’s movement. Resistance zones like the $2,675 level may suggest temporary selling pressure. Traders should manage their positions carefully as dips can happen in the short term. Profit-taking is common in crypto markets. It helps to mitigate risk and doesn’t always signal a bearish trend. Instead, it often reflects market strength, with investors securing profits instead of panic-selling. This article explains the Average Buy Profit (ABP) as a helpful measure to see if asset holders are generally in profit or at a loss. In simple terms, ABP compares current prices with buyers’ average entry prices. When an asset trades above this average, green bars appear on an ABP chart, signaling profit. Conversely, when prices fall below the average purchase prices, red bars indicate unrealized losses. Recently, we’ve seen Ethereum’s ABP fluctuate. Early in the week, the chart showed green, suggesting investors were taking profits. Midweek, the chart turned red as prices fell below higher entry points. By the end of the week, green returned, signaling a recovery. This shifting pattern is significant, as it indicates a market responding not only to internal factors but also to external ones like Bitcoin’s performance. In concrete terms, the $2,675 level seems to serve as a short-term ceiling where sellers are willing to exit. Observing price movements in this zone can help shape expectations. If prices struggle to break through, it may suggest caution among traders. Earlier in the week, profit-taking occurred, but data shows there were no sharp liquidations following it. Instead, it reflected a disciplined strategy, which is characteristic of a healthier market. This suggests that investors are not panicking but are making careful adjustments. Reflecting on last week, the focus should now be on identifying where similar strategies might occur again. If prices retreat but don’t fall below prior lows with significant volume, it could indicate that selling pressure is light. Conversely, if there’s a quick drop below recent support with strong activity, a more conservative approach would be advisable. From a broader perspective, it’s crucial to watch whether prices can move consistently above the recent resistance zone, ideally with good breadth and volume. This could indicate sustained recovery and reduce the chance of larger pullbacks. Resistance only matters if it’s maintained—once it breaks and is confirmed by market structure, the risk-reward balance would change again. Regularly monitoring these indicators allows for ongoing adjustments. The ABP, when combined with price action and external signals, provides a solid overview of market sentiment. It reflects traders’ actions and their impact on the current market. Volatility may return soon, especially as we approach critical macro periods or when related assets hit key technical points. As we navigate through this phase, strategies that allow for low-risk re-entries while safeguarding against downsides will be particularly effective. Absent any major market shocks, this approach continues to effectively gauge real-time conviction.

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The dollar is slightly weaker this morning in Europe, with only small changes across the board. The EUR/USD has gone up by 0.3%, now just over 1.1400. Both GBP/USD and AUD/USD have gained 0.2%, reaching 1.3540 and 0.6475, respectively. The USD/JPY has dipped 0.1% to 143.90, showing no clear trend. Traders are watching updates, including a court decision on Trump’s tariffs and potential trade deals, along with ongoing discussions between the US and China. Trump indicated it’s challenging to reach an agreement with Xi. In other markets, US futures rose, with S&P 500 futures increasing by 0.2%, which had a positive impact on European indices. The DAX and CAC 40 indices rose by 0.8% and 0.7%, respectively. Currently, the dollar is easing against several currencies, suggesting lighter trading volumes and little momentum. The euro has slightly moved ahead, staying just above 1.1400, while the pound and Aussie dollar have made small gains. These changes might still be significant in the near term if they continue to build on existing support levels. The dollar-yen pair is slipping without displaying strong movement. This narrow trading hints that traders might be waiting for clearer signals regarding policies or upcoming data releases. Conversations around trade policy and US-China relations are still being processed, especially with potential obstacles between the US administration and Beijing officials. When Trump mentions difficulties in dealing with his counterpart, it often creates market uncertainty. This uncertainty gets factored into prices quickly, leading to cautious positions in currency markets. While leaders often speak broadly, their choice of words can significantly influence market direction. In the stock market, the rise in US futures seems to be helping European indices. The expected 0.2% increase in the S&P 500 is giving a slight boost to nearby markets like the DAX and CAC 40. This suggests a broadly positive risk sentiment, even if it’s somewhat fragile. Recent price movements indicate that traders are influenced more by news and sentiment than by solid economic data. Right now, implied volatility across major contracts is low, but this could change quickly if new trade decisions or legal rulings create fresh risks. Looking ahead, the dollar’s recent movements suggest that markets are not yet expecting major disruptions. However, correlations between different assets, particularly between indices and major currency pairs, are returning. This means we could see quick fluctuations again. If we get close to key resistance levels in pairs like EUR/USD or GBP/USD, this might trigger breakouts or reversals, depending on upcoming data and news. Given the close relationship between equity and forex markets, we’re closely monitoring the opening reactions from US futures. Right now, it’s not just the numbers we’re watching, but how short-term traders respond to them and whether liquidity remains steady throughout the week. Cautious hedging behavior continues, with low expectations for significant monetary changes. This means trading ranges could stay tight unless an unexpected force arises. Front-month options are pricing in low volatility, with a normal skew and no immediate signs of one-sided demand. However, quiet periods can change quickly if positions get skewed in one direction. Currently, there’s little interest in making bold bets. Most of the recent shifts appear to be due to short-covering rather than strong new convictions. Traders should pay attention to forward guidance not just from policymakers, but also from trading activity around auction or option expiry dates. It’s important to see how this sentiment develops into stronger beliefs—whichever direction that might be.

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UK’s service sector PMI for May has been revised to 50.9 from a preliminary 50.2, indicating a small improvement from April’s 49.0. The Composite PMI also increased to 50.3 from an initial estimate of 49.4, up from 48.5 in the previous month. Business activity has seen a slight uptick, with optimism reaching its highest level in seven months. However, new orders and employment numbers continue to decline, highlighting ongoing challenges in the sector.

Decline in New Orders

Total new orders have dropped due to cuts in business and consumer spending. The service sector has experienced eight consecutive months of employment declines, the longest stretch of job losses since 2008-10, excluding the pandemic years. Input costs rose mainly due to higher wages, although the inflation rate slowed from April’s peak. Competitive pressures led to the slowest increase in service prices since October 2024. This update shows that while overall activity in the service sector has slightly improved, demand remains weak and is putting pressure on businesses. A PMI reading above 50 indicates expansion, but just barely crossing that mark suggests more stability than strong growth. There’s a noticeable gap between business expectations and real demand. Confidence among service providers has risen, reaching its highest point in over six months. This optimism may be driven by hopes of lower interest rates or easing inflation in the future. However, this renewed confidence contrasts with ongoing job cuts and a further drop in new orders, indicating that businesses remain cautious about hiring and spending.

Continued Reduction in Employment

The ongoing reduction in employment has now lasted for eight months, signaling that profit margins are still under pressure and businesses are reluctant to increase wages. This level of sustained job loss hasn’t been seen in over a decade, excluding the unusual circumstances of 2020 and 2021, which highlights the stress in certain areas of the sector. Price data indicates a slight easing. Input costs have risen, mainly due to increased wage demands, but the pace of growth has slowed compared to April. Companies have also reduced price increases, resulting in the weakest rise in service charges in over six months. Many businesses are choosing to absorb higher costs rather than pass them on, aiming to maintain their position in a challenging demand environment. Looking ahead, it is essential not to be misled by the slight PMI increase. Focus on forward-looking factors such as hiring plans, pricing trends, and the gap between expectations and current activity will shape the coming weeks. While the PMI rise may temporarily boost sentiment, this is unlikely to last without confirmation from broader consumer spending or business investment data. As policy approaches a potential turning point, the response to minor economic data changes will be more sensitive. Volatility may increase with minor data fluctuations. It’s essential to stay agile until there are clear signs of improvement, rather than relying solely on appearances. Create your live VT Markets account and start trading now.

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The eurozone’s May services PMI reached 49.7, up from the preliminary 48.9. This suggests slight growth in business activity, but the overall outlook points to an economy close to stagnation. The composite PMI improved from 49.5 to 50.2, just above the point indicating growth, though May showed slower growth. Demand weakened, especially in Germany, and low business confidence due to uncertainty contributed to this slowdown. The eurozone economy has seen growth for five straight months. Manufacturing remained stable, while the services sector experienced a decline in activity. To counter rising tariffs and uncertainty, the European Central Bank (ECB) may consider interest rate cuts and fiscal measures, particularly in Germany. The ECB might lower interest rates on June 5, despite rising costs in the services sector, as prices for goods are falling. Southern Europe, with strong growth in Italy and moderate growth in Spain, offset losses in France and Germany. Supporting growth in southern Europe and Germany’s fiscal policies could strengthen the services sector this year. Confidence in recovery has improved slightly but is still weak when viewed historically. Although May’s final PMI readings showed a slight lift, the overall trend remains disappointing. The score just above the neutral 50 level suggests growth, but only barely. Much of the increase came from services, indicating unclear momentum in key economies. Germany has struggled again, facing weak domestic demand and declining business sentiment, both impacting output. France has not helped the situation. It showed further drops in private sector activity. On a positive note, Italy and Spain contributed more resilient services demand, likely due to stronger internal consumption and stable employment. However, this performance may not be enough to counter the overall softness in the euro area, especially as seasonal boosts, like early tourism demand, might diminish. Goods inflation has decreased significantly, providing the ECB with a possible reason to cut rates, even with high service input prices. Wage growth could still complicate efforts to manage inflation expectations, but trends support a slightly looser monetary policy. Traders in short-term rates have shifted their positioning. Price pressures vary across the region, increasing the sensitivity to regional data. The forward curve has steepened slightly in anticipation of a June rate cut, lowering short-term yields while maintaining caution for longer contracts. The difference between input costs and output prices in manufacturing and services suggests shrinking margins in some areas, limiting sustained profitability in certain sectors. From a strategy perspective, diversifying across regions seems more favorable, especially focusing on Southern markets where demand is stronger. What’s important is the difference in confidence levels. Although some areas have returned to positive sentiment, historically, confidence remains low. This might continue to restrict hiring plans and capital spending, especially in struggling service sectors. Expect month-to-month volatility moving forward, as PMIs hover around neutral levels. Any positive surprises in German orders or French consumer spending could change the growth outlook for Q3, especially with clear fiscal direction. Conversely, disappointments might reverse recent rate expectations. The focus should now be on regional data and second-tier indicators rather than just headline inflation and PMI numbers. Expanding the view to include wage settlements, industrial orders, and corporate lending could provide better insight for positioning. What mattered in the last cycle—early moves, reliance on guidance, and strong policy signals—has begun to fade. The risk-reward dynamic remains uneven. Positive revisions can lead to sharp increases in rate-sensitive products, but disappointing data often reinforces the ongoing trend of underperformance, particularly in Western Europe. There’s no need for strong convictions in either direction; liquidity is thin, and even slight changes in forward-looking indicators are impactful. As summer expectations build, tactical strategies may benefit from reassessing exposure to consumer-driven sectors. The stark difference in retail activity between North and South offers opportunities, especially if inflation driven by wages acts unevenly across the region. A close eye on upcoming ECB communications and national updates is crucial, but less significant data releases may also play a substantial role in shaping short-term sentiment.

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France’s May final services PMI was adjusted to 48.9 from an original 47.4. The last reading was 47.3. The composite PMI also increased to 49.3 from a preliminary 48.0, compared to the previous data of 47.8. The higher PMI indicates a slower decline in business activity. The drop in new orders and employment was less severe than in previous months, suggesting the private sector might soon exit this downturn. However, the composite PMI remains below the growth threshold.

Current Market Conditions

Market conditions are still tight as both domestic and foreign demand continues to decline, though at a slower rate. There are slight signs of increasing demand, but optimism for future improvements has faded, causing concern among service providers due to ongoing uncertainties. In May, profit margins in the service sector fell due to rising input costs, mainly due to wage pressures. At the same time, output prices decreased, indicating that companies struggled to pass these increased costs onto customers. This situation may lead the European Central Bank (ECB) to consider lowering rates further, with two more cuts expected this year. The upward revision in the French services and composite PMIs shows a small change in sentiment, indicating that the business environment remains tough but isn’t getting worse as quickly. Even though a figure below 50 indicates contraction, the narrowing gap suggests that this contraction is easing. The data indicates that businesses are not expanding yet, but the pace of decline has softened somewhat.

Potential Turning Point

When new orders and employment slow their decline, it often means we’re approaching a turning point. Morale may still be cautious, but signs of stabilization could be emerging. However, since the figures are still below the 50-mark, the risk of renewed weakness remains. These changes in indicators alone may not look promising, but they suggest that the downward trend is not worsening. We’ve noticed that pricing power in services is shrinking. Input costs, especially labor-related, continue to rise, while output prices are falling. This means firms struggle to pass higher costs to their customers. This squeeze on margins is an important sign, especially when considering future monetary policy. The mismatch between costs and prices might justify the ECB’s potential easing, especially if inflation pressures, like wage increases, persist. Realistically, if output prices keep showing weakness and wage inflation stays stubborn, a push for lower rates is more likely in the latter part of the year. Despite some providers hoping for better demand, the general feedback remains weak. With expectations for the future subdued and confidence not fully returning, we’re viewing these revisions as somewhat positive but not defining. The trends still carry significant uncertainty, and there’s little indication of a strong rebound soon. What’s crucial now is how activity performs in June and whether these contractions ease into neutral territory. We’re closely monitoring pricing strategies, as this will indicate how companies manage cost pressures without making deeper cuts to staff or investments. If margins continue to decline, monetary support may become more likely—not immediately, but in the coming quarters. Create your live VT Markets account and start trading now.

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The USDJPY pair is stable near recent lows as traders await important US data releases. The USD has slightly weakened because interest rate expectations have already been priced in. The market is in line with the Fed’s forecast, which predicts two rate cuts in 2025. However, strong US data is needed to change this view. Key upcoming data includes the ISM Services PMI, US Jobless Claims, the NFP report, and the CPI. Recently, the JPY weakened but regained some strength due to trade tensions. Japan is thinking about reducing super-long bond issuance, which could impact the yen’s value. There is still uncertainty about a potential rate hike, with an expectation of 18 basis points of tightening by the end of the year. Japanese inflation data supports this expectation, and the US-Japan trade deal will affect future policies. On the daily chart, USDJPY fluctuates around the 142.35 level. Buyers are looking to push the price up toward 148.32, while sellers aim for a drop below 142.35 to reach 140.00. On the 4-hour chart, resistance is seen at 144.44, with buyers wanting to break above this level. The 1-hour chart indicates minor support at 143.67, with strategies targeting a breakout above 144.44 or a drop to 142.35. The upcoming data includes US ADP, ISM Services PMI, Japanese wage data, and US Jobless Claims, culminating in the US NFP report on Friday. Currently, the USDJPY pair is near the lower end of its recent trading range, close to 142.35. This stability shows that markets are mostly in a wait-and-see mindset. With rate expectations on the dollar already accounted for, especially thoughts of no further hikes and a couple of small cuts next year, the dollar has found fewer reasons for strength recently. Traders seem cautious about taking strong positions until new US data creates fresh momentum. Several important indicators are on the horizon, including the ISM Services PMI and jobless numbers, along with the crucial non-farm payroll figures. Each data point will help build a clearer picture of whether the labor market is slowing down or remaining stable. If job numbers exceed expectations, markets might start questioning the timing of rate cuts, which could push the dollar higher. Conversely, weak payroll figures could confirm current pricing and gradually lower the dollar. Meanwhile, yen dynamics have changed slightly. Earlier weakness has shifted to a more balanced view, partly due to expectations of tighter policy by year’s end. Talks about changing bond issuance, especially for long-term bonds, have impacted JGB yields and the yen. Still, the idea of a 25-basis-point move in the coming months is not seen as certain. The market anticipates only 18 bps of tightening, indicating hesitation about how far the Bank of Japan will go without strong wage growth or an increase in domestic demand. On the technical front, the 4-hour chart reveals that bulls are looking for a break above 144.44 as a clear sign of regained momentum. Without this breakthrough, upward attempts may stall again. The daily chart shows a large consolidation range forming, and many traders are preparing for a wider range, possibly between 140.00 and 148.32. The narrow range near 143.67 on the 1-hour chart indicates that the market is waiting for a catalyst, which will come from the next major data release. Next week, the Japanese wage data should be watched carefully. A rebound here could strengthen domestic rate hike bets, which would likely put pressure on USDJPY, especially if paired with soft US data. Jobless claims are considered a mid-tier event, but consecutive higher readings could create noise around Fed expectations and add volatility to very short-term rate futures. As Friday’s payroll figure approaches, it’s not wise to take large positions based on speculation. Until USDJPY moves above 144.44 or below 142.35, most directional confidence is linked to these key levels. The focus remains on observing how these levels react to unexpected data. There’s a contradictory tone in the market where JPY strength could rise without dollar weakness. This situation would favor shorter-dated implied volatilities, especially leading into Thursday night. The week’s end might result in either a breakout or a return to previous levels, but significant reactions are expected.

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In the European session, the attention is on the final services PMIs for the UK and Europe. These reports are not expected to have a major impact on market prices. In the American session, important data includes the US ADP report, the Canadian Services PMI, and the US ISM Services PMI. Notably, the “prices paid” component in the ISM PMI is expected to draw particular interest.

Bank of Canada Policy Decision

The Bank of Canada will share its policy decision today, with rates likely staying the same. Recent inflation trends and improvements in some indicators suggest the bank may take a more neutral position. Currently, the market has priced in 43 bps of easing by year-end, but this number may decrease. Keep an eye on tariff news, as the White House has asked countries to submit trade offers by Wednesday. Fed’s Bostic, who leans hawkish and doesn’t vote, will speak at 12:30 GMT/08:30 ET. Later, Fed’s Cook, who is dovish and does have a vote, will speak at 17:00 GMT/13:00 ET. Overall, market analysts are navigating a mix of mild consumer data and future central bank comments. None of these seem likely to disturb pricing in the short term. The European PMI figures, which often indicate local sentiment in service sectors, are expected to remain stable and predictable, leading to minimal adjustments from market players. In North America, data releases suggest a similar tone—measured interest without immediate impact. Traders tend to view the ADP employment readings cautiously due to their inconsistent results, though they can still briefly affect sentiment. Canadian data should be considered alongside the forthcoming interest rate decision, which is expected to maintain current policy rates. Recent consumer price easing and rising activity indicators could allow monetary authorities to adopt a softer tone without changing rates.

Implication of ISM Prices Paid

The ISM Services PMI release is particularly intriguing, especially the “prices paid” category. This metric often signals inflation trends. If businesses report higher input costs, those expenses usually affect prices downstream soon after. A significant increase in this category could rapidly shift fixed-income pricing, especially at the front of the curve. As for trade developments, new policy changes could disrupt the markets. With the US government asking for trade offers by mid-week, there’s potential for fragmentation across asset classes. We need to stay alert for sudden changes that could affect multinationals and commodities, especially as news can break during quieter trading hours. Federal Reserve officials are also scheduled to speak. Bostic’s comments are not likely to influence the market much this year, given his known preference for tighter policies. Markets may listen but won’t change expectations based on his remarks alone. On the other hand, Cook, as an influential voter, can impact pricing with her commentary on the economy. If she expresses concern over inflation data or suggests delaying rate cuts, the two-year yield may increase quickly. For those using rate markets for trading positions, the time between the services PMI and Cook’s speeches is especially critical. Option pricing may rise with increased demand for hedging, particularly if the ISM report causes volatility. Expect a preference for yield protection if prices paid show strength. In conclusion, approach the market with caution—not hesitation, but with careful positioning. Adjust delta exposure rather than pursuing high-risk gamma plays. Be slightly quicker to respond ahead of macro speeches and watch for liquidity shifts that can impact fragile markets due to trade policy headlines. Create your live VT Markets account and start trading now.

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Dear Client,

To provide you with more diverse trading options, VT Markets will have a product launch. Please refer to the details:

Friendly reminders:

1. The above data is for reference only, please refer to the MT4/MT5 software for specific data.

2. The swap rate is subject to the MT4 and MT5 software.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

The dollar has been fluctuating, making it hard to identify clear trends. There is still trade uncertainty, but signs suggest major changes may not happen soon. Yesterday, both the dollar and stocks gained, but today feels more cautious. Changes in dollar pairs are minimal, with differences of less than 0.1%. This indicates a calm European trading session. With few events on the schedule, the trading day may be slow. Activity may pick up later when the ADP employment report is released in the US. In other markets, S&P 500 futures have dropped by 0.1%. Gold prices are slightly up, now at $3,359, a 0.2% increase. In simple terms, the dollar’s recent behavior has been unpredictable. Traders are looking for a clear direction, but that hasn’t happened yet. There’s speculation about major economic or policy changes, but it seems those sudden moves might not happen soon. This creates a steadier tone for the dollar and investors. Yesterday’s gains in the greenback and stocks have given way to a more cautious trading day today, with little movement in the early European session. The lack of significant movement—less than a 0.1% change—shows that traders are waiting before making commitments. They likely prefer to sit on the sidelines until more data arrives. With few scheduled events until US markets open, there may be narrow price ranges. Unless sentiment shifts or unexpected news comes out, the trading session could continue at this slow pace. The next important event will be the release of US private payroll data. This could bring back volatility. Jobs data are closely watched for what they might suggest about future monetary policy. If the numbers differ significantly from what’s expected, it could lead to reactions in foreign exchange, stocks, and bond markets. In other news, the recent 0.1% drop in US index futures suggests less enthusiasm from equity investors. They are neither selling a lot nor buying aggressively. It’s a quiet indication that aligns with recent trends: inconsistent price action without a clear direction. Gold is also climbing slightly again. At $3,359, it has gained 0.2%. While not a huge increase, it indicates that some investors are becoming more defensive. Such movements typically show that market participants are cautious, even if their appetite for risk isn’t fully diminished. As we move through these hours, patience is necessary. Clear signals are lacking. When faced with inconsistency, it’s often better to be opportunistic than overly committed. Use short-term levels as your guide; avoid chasing trends. Wait for stronger confirmation during the North American session. One important data release could shift the short-term balance. Until then, it’s best to react rather than preempt. Approach expectations for upcoming sessions with caution. The risk of overreacting is low, but being too complacent could be unwise. The environment has calmed for now. Whether this continues into the afternoon may depend on the labor data and how it aligns with current views on inflation and economic momentum.

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