Trading Week Ahead: GameStop’s $56B eBay Bid & US Jobs Week
US stock markets are sending mixed signals. Even though the S&P 500 is hitting new highs, only a few big stocks are driving the gains, making the rally look a bit weak. In the corporate world, Warren Buffett's Berkshire Hathaway reported strong profits under its new CEO, revealing a massive, record-breaking $397 billion cash pile. Meanwhile, GameStop completely shocked Wall Street with an unexpected $56 billion offer to buy out eBay.
Brace for this week's three key economic events:
👉US ISM Services PMI – 16:00, Tuesday (CEST)
A key health check for the US economy. Markets expect a slight dip to 53.8 (down from 54.0). A strong report from the services sector will show the economy is doing well, boost the US dollar, and lower the chances of early interest rate cuts.
👉 US JOLTS Job Openings – 16:00, Tuesday (CEST)
A close look at how many workers companies actually need. Forecasts suggest a tiny drop to 6.870 million (down from 6.882 million). A report showing a bigger drop in job openings would mean the job market is cooling down, which brings hope that the Fed will cut interest rates soon.
👉 US Nonfarm Payrolls – 14:30, Friday (CEST)
The biggest economic event of the week. Analysts expect a sharp slowdown in hiring, forecasting just 73,000 new jobs (down from 178,000). If this report shows surprisingly high job growth instead, it will force the Fed to wait longer before cutting rates and cause big swings in the market.
Date
Time
Instrument
Event
Tuesday, May. 5
RBA Interest Rate Decision
ISM Services PMI
JOLTS Job Openings
Wednesday, May. 6
ADP Nonfarm Employment Change
Friday, May. 8
Employment Change
Nonfarm Payrolls
Unemployment Rate
Prelim UoM Consumer Sentiment
Prelim UoM Inflation Expectations
*All times in the table are in CEST
Technical Analysis with FVG Strategy
This technical analysis uses the EMA 20 and EMA 50 to determine market trends, alongside the Fair Value Gap (FVG), which refers to price imbalances caused by aggressive movements, signalling key entry and exit points. This strategy applies to BTCUSD, EURUSD, GBPJPY, US100, and XAUUSD, providing insights into both last week’s market opportunities and the current one.
Opportunities to Watch This Week
EURUSD
Market Context: The price remains above the 20 EMA, indicating a presence of buyers. However, Friday's upper wick, which swept the liquidity above last week's high and subsequently closed as a smash bar, signals a bearish shift. This aligns with the historically strong negative seasonality for the EURUSD in May.
Bearish Scenario (Preferred): The preferred scenario requires a daily close below the 20 EMA. This would confirm the bearish sentiment and open the door for a drop down to the lower support level.
Bullish Scenario (Alternative): The alternative scenario involves the price defending the 20 EMA and continuing its upward push toward the marked swing high.
FVG Setup: No FVG setup formed this week or last week due to low market volatility.
GBPJPY
Market Context: The Pound broke through the first support level and dropped all the way to the next support zone, where a reaction finally occurred. Following this massive drop, Friday closed as an inside bar, signalling market indecision.
Bullish Scenario (Preferred): Following such an extreme drop, the preferred scenario anticipates a potential reversal and a retracement of the move. To confirm this setup, it is ideal to wait for a breakout of Friday's inside bar, with a potential target reaching the upper resistance zone.
Bearish Scenario (Alternative): A daily close below the lower support zone. This would indicate a continuation of the downward momentum.
FVG Setup: A bearish FVG did form; however, due to the extremely aggressive nature of the recent sell-off, it is not recommended to consider this setup as valid for execution.
XAUUSD
Market Context: Gold has dropped down to a major support level, where monitoring the market's reaction will be critical.
Bullish Scenario (Preferred): The preferred scenario remains long, aligning with the currently active FVG trade. A breakout above the nearest immediate resistance would significantly support this upward continuation.
Bearish Scenario (Alternative): A definitive daily close below the support zone. This would provide a clear signal for a structural shift to the downside.
FVG Setup: A short FVG formed this week, and entry is possible based on the alternative bearish scenario with a 2:1 RRR target. However, strict caution is advised, as this trade goes against the preferred scenario.
US100
Market Context: The market continues its incredible upward trend, heading toward the psychological 28,000 level. Looking at seasonality, the strongest months for the Nasdaq are still ahead, specifically June, July, and August, which have historically been among the most profitable months for this market over the last 20 years.
Bullish Scenario (Preferred): The preferred scenario is a continuation of this strong trend. An ideal entry would be a corrective pullback into the active long FVG, targeting a 2:1 RRR.
Bearish Scenario (Alternative): A daily close below structural support. This could indicate a short-term market shift, though the depth of such a correction would be difficult to estimate at this stage.
FVG Setup: A clean bullish FVG has formed in the direction of the trend, offering a potential 2:1 RRR target.
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