May 2025 brought a notable shift in global market sentiment, driven by signs of cooling inflation in the U.S. and stabilising trade relations following April’s tariff shocks. After a volatile start to Q2, markets found their footing as April’s aggressive trade tensions gave way to tentative diplomatic progress, including early-stage negotiations between the U.S. and key trade partners.
Additionally, U.S. CPI data released on May 14 showed inflation easing to 3.1% YoY, the lowest level since mid-2023, reinforcing expectations that the Federal Reserve could pivot to a more dovish stance in the second half of the year.
Equities responded positively to the macro backdrop, with growth and tech sectors driving a broad-based rally, while bond yields retreated modestly on reduced rate hike fears. Commodities and cryptocurrencies had a more mixed month, grappling with shifting demand expectations and continued sensitivity to policy signals. In the FX space, the dollar weakened across the board as risk appetite improved and yield differentials narrowed.
Amid these developments, our trading strategies benefitted from strong directional moves in equity indices and selected FX pairs, while choppier conditions in commodities and crypto required tighter risk management and a more selective approach.
Asset Class Summary
Forex
The dollar’s decline in May reflected improving risk sentiment and softer inflation data, which reduced expectations for further Fed tightening. EUR/USD advanced steadily, reaching highs near 1.1150 as traders priced in reduced transatlantic rate differentials and fading trade tensions. Meanwhile, AUD/USD rebounded on stronger Chinese PMI data and renewed appetite for risk assets. However, intraday volatility remained high across major pairs, particularly around U.S. economic data releases, requiring a nimble approach to FX positioning.
Indices
Global stock indices surged in May, reversing April’s deep losses. The Nasdaq led gains, climbing steadily amid strong earnings reports from tech giants and moderating inflation. The S&P 500 and US2000 also posted healthy advances, supported by reduced geopolitical risk and improving investor sentiment. Equity trading strategies that favoured trend-following and breakout setups performed particularly well in this environment of steady upward momentum.
Commodities
Commodity markets faced mixed conditions in May. Crude oil stabilised after April’s sharp sell-off, trading in a relatively tight range as OPEC+ refrained from further production changes and demand forecasts steadied. Gold prices dipped slightly as risk appetite returned, though they remained historically elevated above $2,900 per ounce. Industrial metals rebounded modestly on improving Chinese data, but remained sensitive to shifting global demand expectations.
Cryptocurrencies
Bitcoin and Ethereum posted modest gains in May, maintaining a positive correlation with tech equities but experiencing disruptive price action around key technical levels. Spikes above resistance and sudden dips below support created challenging conditions for trend and breakout traders. Nonetheless, the broader uptrend in digital assets remained intact, supported by improving macro sentiment and a weakening dollar.
The simulated performance statistics provided are based on the assumption of risking 1% of trading capital per trade. It is crucial to understand that past performance, whether actual or simulated, is not indicative of future results.
12 month simulated performance statistics
| Jun 24 | Jul 24 | Aug 24 | Sep 24 | Oct 24 | Nov 24 | Dec 24 | Jan 25 | Feb 25 | Mar 25 | Apr 25 | May 25 |
| -2.77% | -7.69% | -8.92% | 20.16% | -18.47% | -15.68% | 27.29% | 12.66% | 16.50% | -7.53% | -19.13% | 19.22% |
FX Crosses emerged as the top-performing asset class in March, delivering an 11.45% return with a solid 51.02% win rate across 98 trades. Despite a moderate drawdown of -6.94%, the results indicate strong profitability with manageable risk.
Indices followed closely, returning 10.74% with the highest win rate of 56.96% over 79 trades, and maintaining a relatively low drawdown of -5.14%, highlighting both consistent performance and effective risk control.
FX Majors posted modest gains, achieving a 3.72% return and a 49.30% win rate over 71 trades. The drawdown stood at -4.42%, suggesting balanced outcomes despite a sub-50% win rate.
Commodities saw minimal returns, up just 0.48%, though they had a respectable 54.55% win rate across 66 trades. A drawdown of -5.19% implies cautious gains amid controlled risk.
Cryptocurrencies were the only asset class to post losses, falling -4.01% despite a decent 51.43% win rate over 35 trades. A drawdown of -4.56% suggests mild underperformance with limited downside.
In summary, FX Crosses led the month with the highest returns, while Cryptocurrencies were the sole underperformer. Indices and FX Majors also posted respectable gains, whereas Commodities hovered near breakeven, reflecting a generally positive but uneven performance across asset classes.
| Asset Class | Trades | Win Rate | Returns | Drawdown |
| FX Majors | 71 | 49.30% | 3.72% | -4.42% |
| FX Crosses | 98 | 51.02% | 11.45% | -6.94% |
| Commodities | 66 | 54.55% | 0.48% | -5.19% |
| Indices | 79 | 56.96% | 10.74% | -5.14% |
| Cryptocurrencies | 35 | 51.43% | -4.01% | -4.56% |
The chart below highlights the contrasting performance between the Vanguard Total World Index (black), which represents Global Indices, and the Crypto 10 Index (blue), which includes the 10 largest Cryptocurrencies by market capitalisation. Throughout the month, the Vanguard Total World Index demonstrated a robust upward trajectory, offering predictable conditions for our analysts. In contrast, the Crypto 10 Index faced volatility and varied trading conditions. Despite a strong beginning, cryptocurrencies traded within a range, making it challenging to forecast future movements in May. We leveraged favourable conditions in FX Majors, FX Crosses, Indices, and Commodities during May, although the Crypto sector posed more significant challenges.
NASDAQ posted a strong return of 6.32% with a 70.00% win rate across 10 trades (6 long, 4 short), while keeping drawdown low at -1.01%.
USDTRY delivered a 4.51% return with a perfect 100.00% win rate from 4 long-only trades, and experienced no drawdown, reflecting highly efficient trade execution.
EURCHF returned 3.53% despite having the lowest win rate at 33.33% over 9 trades (3 long, 6 short), with a drawdown of -3.00%. This highlights how strong risk/reward setups can yield profits even with a low win rate.
| Best | Trades | Long | Short | Win Rate | Returns | Drawdown |
| NASDAQ | 10 | 6 | 4 | 70.00% | 6.32% | -1.01% |
| USDTRY | 4 | 4 | 0 | 100.00% | 4.51% | -0.00% |
| EURCHF | 9 | 3 | 6 | 33.33% | 3.53% | -3.00% |
Bitcoin was the poorest performer, recording a -4.15% return with a low win rate of 22.22% across 9 trades (6 long, 3 short), and a matching drawdown of -4.15%, reflecting weak trade execution and no recovery from losses.
Platinum also underperformed, posting a -4.14% return with the lowest win rate at 12.50% from 8 trades (3 long, 5 short). A drawdown of -5.25% indicates poor risk control and consistent negative outcomes.
US2000 showed slightly better results, but still ended with a -2.82% return and a 16.67% win rate over 6 trades (evenly split between 3 long and 3 short), with a drawdown of -3.32%, signalling limited success despite balanced positioning.
| Worst | Trades | Long | Short | Win Rate | Returns | Drawdown |
| Bitcoin | 9 | 6 | 3 | 22.22% | -4.15% | -4.15% |
| Platinum | 8 | 3 | 5 | 12.50% | -4.14% | -5.25% |
| US2000 | 6 | 3 | 3 | 16.67% | -2.82% | -3.32% |
As highlighted earlier, stock indices benefited from favourable conditions in May, with the NASDAQ showing a consistent uptrend throughout the month. Our strategy primarily focused on buying opportunities, though we also found some success trading countertrend setups.
Bitcoin also trended higher overall, making the long side our preferred direction. However, the trading environment was more challenging, with frequent fakeouts and breakdowns. Price spikes through resistance and dips below support often disrupted technical setups, making it difficult to rely solely on standard chart patterns.
Major Macroeconomic Data
Here is a snapshot of how our trade ideas performed on the day of key macroeconomic data.
| Event | Date | Trades Triggered | Win Rate | Return |
| Non Farm Payrolls | 02/05/2025 | 16 | 56.25% | -0.51% |
The May Non-Farm Payroll report surpassed expectations, registering 177k against the anticipated 133k. This initially triggered a sharp decline in the US Dollar's value, which then rebounded sharply to close at session highs. We experienced strong gains in NASDAQ and USDJPY, which helped offset losses in EURUSD, AUDUSD, GBPJPY, DOW, and Bitcoin.
| Event | Date | Trades Triggered | Win Rate | Return |
| US Interest Rate Decision | 07/05/2025 | 18 | 38.89% | -4.70% |
The US Interest Rate decision aligned with expectations. Following the announcement, comments from Fed Chair Powell, who has been under increasing pressure from President Trump to lower rates, led to an upward movement in the US Dollar. We achieved minor gains in GBPJPY, NASDAQ, and GBPCHF, but experienced losses on AUDUSD, Copper, and EURCHF.
| Event | Date | Trades Triggered | Win Rate | Return |
| US CPI (YoY) | 13/05/2025 | 16 | 37.50% | 1.03% |
The US CPI number aligned with forecasts at 0.2%. Prior to the announcement, the Dollar experienced a strong upward movement but lost some momentum following the data release. Prices remained elevated throughout most of the session. We recorded gains on China A50, GBPAUD, Litecoin, and Gold, which were slightly offset by losses in Platinum, EURCHF, and AUDUSD.
Trade of the Month
Our team of expert analysts conducts daily evaluations of the market to identify top-tier trading opportunities. Each analyst offers a unique perspective, leveraging their extensive expertise to produce accurate market predictions. In May, our featured trade centred on EURCHF. By recognizing a consistent downtrend in the charts, our analyst pinpointed the chance to sell during rallies, expecting a further price decline. They anticipated a slight upward correction to set an entry point with a favourable risk-to-reward ratio, employing traditional technical analysis to specify precise entry and exit points. This strategic method underscores our team's capability to pinpoint setups with optimal risk versus reward and crucial market turning points.
Here's a graphical depiction illustrating the trade setup and the analytical process behind EURCHF.
At approximately midday UK time, President Trump posted on his Truth Social platform, stating:
“Our discussions with [the EU] are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.”
This announcement came unexpectedly and caught financial markets off guard. Investors reacted swiftly, moving capital away from the euro and into the Swiss franc, which is traditionally considered a safe-haven currency during times of geopolitical and economic uncertainty.
Our analyst strategically positioned their entry at a bespoke resistance level. Although the news event was unforeseen, such occurrences have become commonplace in recent months, underscoring the challenges traders face. In this scenario, the risk was mitigated by setting the entry at a clearly defined resistance and offering substantial reward potential. The setup's structure facilitated a significant return relative to the risk. EURCHF hit our specified entry point at 10:55 (UK), experiencing a 3.5 pip drawdown before prices sharply declined. The price swiftly dropped from a high of 0.9379, reaching our initial target of 0.9315 within two hours and achieving our second target of 0.9300 just five minutes later.
Published: 06:58 UK (23rd May 2025)
Triggered at: 10:55 UK (23rd May 2025)
Exit at: 12:45 UK (23rd May 2025)
Duration: 1 Hours and 50 minutes
Outcome: 4R
May 2025 marked a turning point in global markets, as easing inflation and a pause in tariff escalation helped restore investor confidence following April’s turmoil. Risk assets rebounded strongly—particularly equity indices, with the Nasdaq leading the way—while FX Crosses delivered the highest returns across asset classes. Cryptocurrencies, although broadly trending higher, posed tactical challenges due to frequent technical breakdowns. Commodities remained mixed, and forex markets reflected improved sentiment and a weaker US dollar. Our trading strategies capitalised on clear directional moves in indices and FX, while applying tighter risk controls in more volatile sectors. As illustrated by our EURCHF trade of the month, success relied on identifying high-quality technical setups and remaining agile in the face of unexpected macro developments—a theme likely to continue amid ongoing geopolitical uncertainty.
Thank you for your continued trust in Acuity Trading. Stay tuned for more updates and insights in the coming months.