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Daily Pivots: (S1) 0.6407; (P) 0.6430; (R1) 0.6451; More...

AUD/USD is holding above 0.6406 support and intraday bias remains neutral. Further rally remains in favor. Break of 0.6536 will resume whole rally from 0.5913. However, firm break of 0.6406 will confirm short term topping, and turn bias back to the downside for 38.2% retracement of 0.5913 to 0.6536 at 0.6298.

In the bigger picture, 55 W EMA (now at 0.6439) is considered taken out. A medium term bottom should already be in place at 0.5913. Rise from there could either be a corrective move, or reversing whole down trend from 0.8006 (2021 high). In either case, further rise is now expected as long as 55 D EMA (now at 0.6376) holds. Next target is 38.2% retracement of 0.8006 to 0.5913 at 0.6713.

Daily Pivots: (S1) 144.12; (P) 144.60; (R1) 145.35; More...

Intraday bias in USD/JPY remains on the upside for the moment. Rise from 142.10 is in progress for 148.64 resistance first. Firm break there will resume the rebound from 139.87 to 100% projection of 139.87 to 148.64 from 142.10 at 150.87. On the downside, below 144.72 minor support will turn intraday bias neutral first.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.8247; (P) 0.8269; (R1) 0.8293; More….

USD/CHF's break of 0.8305 minor resistance suggests that pull back from 0.8475 has already completed at 0.8187. Corrective pattern from 0.8038 is now in another rising leg. Intraday bias is back on the upside for 0.8475 resistance first. Firm break there will target 100% projection of 0.8038 to 0.8475 from 0.8187 at 0.8624. For now, risk will stay on the upside as long as 0.8187 holds, in case of retreat.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8713) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

Daily Pivots: (S1) 1.3440; (P) 1.3481; (R1) 1.3512; More...

GBP/USD is holding above 1.3389 support and intraday bias remains neutral. Further rise is expected as long as 1.3389 minor support holds. On the upside, firm break of 1.3592 will resume larger rally for 100% projection of 1.2706 to 1.3442 from 1.3138 at 1.3874. However, decisive break of 1.3389 will confirm short term topping, and turn bias back to the downside for 1.3138 support instead.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2870) holds, even in case of deep pullback.

We don’t know how it does it, but it does it. Nvidia continues to defy gravity. It keeps announcing blowout results and advancing at an impressive pace, despite all the challenges the trade war throws its way. Again yesterday, the company managed to surpass revenue expectations by a comfortable margin. It earned $44.1bn, even after taking a $2.5bn hit on H20 chips it couldn’t sell to China. It printed a $4.5bn charge due to H20 inventories. And yet, revenue still came in almost $1bn above analyst expectations. Blackwell sales alone were about $3bn ahead of forecasts.

Profit rose 26%, while data center sales – Nvidia’s AI-related revenue – jumped 73% to $39.1bn. The company expects to sell $45bn worth next quarter, saying that Middle East deals will help fill the $8bn hole left by the loss of Chinese business. Voilà. Another breathtaking moment for Nvidia investors. The stock jumped nearly 5% in after-hours trading.

The broader market implications are positive, too. S&P 500 futures are up more than 1.5% as of this writing, and Nasdaq futures are up nearly 2%.

This earnings season finale has again been strong with Nvidia closing the dance. Looking back, the Q1 earnings growth rate is around 13%, almost double earlier estimates. The forward 12-month P/E ratio for the S&P 500 is now 21.1, above the 5-year average of 19.9 and the 10-year average of 18.4, according to FactSet.

Some companies, like Walmart, have warned they’ll pass on tariff costs across a broad range of products. Others are downplaying the impact. Macy’s, for instance, said it will raise prices on a surgical basis to offset tariffs. Dick’s Sporting Goods maintained its full-year guidance for both sales and earnings.

Stocks are climbing as a result. There’s one dark spot, though: earnings guidance for the current quarter has dimmed. 47 S&P 500 companies have issued negative EPS guidance for Q2 due to tariff uncertainties, while 40 have issued positive guidance. So the index performance and investor mood will continue to hinge on trade developments – the tariffs, their impact on prices in the US and beyond, and the broader effects of the global trade war on growth.

Speaking of which – there’s BIG news on the wire this morning: a panel of three judges at the US Court of International Trade in Manhattan issued a unanimous ruling Wednesday, declaring Trump’s tariffs illegal. The court found that Trump wrongfully invoked emergency laws without an actual emergency. Yes, the exploding US debt is a real issue – but slapping tariffs on everyone isn’t the answer.

The court gave the Trump administration 10 days to ‘effectuate’ the order but did not specify how the tariffs should be unwound. The whole thing felt like four-year-olds were playing in a room and an adult finally stepped in to stop the chaos.

Markets responded positively. The CSI 300 is up for the first time in six sessions, the Nikkei is up more than 1%, futures are higher, oil is rising: US crude is now testing the critical 50-DMA resistance, which has held since April 2 – the day the absurd (and now potentially illegal) tariffs were announced and could break it if they can’t be maintained.

Elsewhere: gold is down, the Swiss franc is down, the US dollar is up, and US yields are rising – not purely from debt worries (though that’s part of it), but mostly from a flight into risk-on assets.

Still, debt concerns aren’t going anywhere. A JP Morgan survey released Wednesday shows outright short positions on US Treasuries are at their highest levels since February. This is reportedly true across all client categories – central banks, sovereign wealth funds, real money accounts, and speculators – meaning pressure on yields will likely persist.

And the Federal Reserve (Fed) isn’t stepping in to calm market jitters. Understandably so. They don’t know what’s coming next on tariffs – and they’re right to stay put for now. Fed funds activity doesn’t suggest a rate cut before September, anyway.

But investors may not need the Fed if this tariff madness ends. If the court ruling holds and tariffs are blocked, brace for a global risk rally across major indices, the US dollar, and commodities on improved global growth expectations.

On the defense front, the US pulling back from protecting allies isn’t likely to change, even if the tariff chaos subsides. Defense spending will continue and even expand. NATO has proposed shifting spending toward cybersecurity and coastal security. Of the proposed 5% of GDP allocated to military spending, 1.5% would go toward these areas.

But investors didn’t need NATO to know that cybersecurity is a booming sector. In a world where more of our lives are lived online, online security is a growth story with long legs.

And one last word before we go: US and European leaders are scheduled to speak today, but the court ruling may shift the tone of those talks. At this point, it’s unclear whether trade negotiations are even necessary anymore.

Note: European markets are closed today due to Ascension Day, so while futures are trading higher, the thin volumes could exaggerate market moves – and it looks like the good news will get the support.

Daily Pivots: (S1) 1.1268; (P) 1.1307; (R1) 1.1329; More...

EUR/USD's break of 1.1255 support suggests that rebound 1.1064 has completed at 1.1417. Corrective pattern from 1.1572 is now extending with another falling leg. Intraday bias is back on the downside for 1.1064 first. Break there will target 100% projection of 1.1572 to 1.1064 from 1.1417 at 1.0909. For now, risk will stay on the downside as long as 1.1417 resistance holds, in case of recovery.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 55 W EMA (now at 1.0858) holds.

Dollar's rebound gather extra momentum today, after the US Court of International Trade struck down President Donald Trump’s sweeping reciprocal tariffs, giving markets a fresh catalyst. The court ruled that the reciprocal tariffs imposed in April across multiple countries under claims of correcting trade imbalances exceeded presidential authority under the International Emergency Economic Powers Act. The decision marks a significant legal blow to Trump’s aggressive trade agenda.

In a strongly worded decision, the three-judge panel concluded that the “Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.” The ruling also invalidated separate tariffs targeting Canada, Mexico, and China under the pretext of combating drug trafficking, stating those measures lacked a direct link to the threats cited. However, tariffs on specific items like steel and aluminum remain unaffected, as they were justified under different statutes not challenged in this case.

The Trump administration has ten days to comply with the ruling, though it has already filed an appeal to the US. Court of Appeals for the Federal Circuit. While the immediate legal outcome remains uncertain, markets responded decisively to the court’s move.

The decision sparked a broad risk-on reaction in financial markets, with DOW futures jumping over 500 points and Asian equities advancing, led by gains in Japan. Gold, which had been buoyed by safe-haven flows in recent sessions, fell below the 3250 level as investor sentiment improved. Nevertheless, 10-year Treasury yield remained steady around 4.5%, suggesting that bond markets are taking a more measured view, likely awaiting further clarity from the appeal process and ongoing trade negotiations.

Dollar dominated currency markets, emerging as the clear outperformer of the day. It was followed by the Aussie and Loonie, both benefiting from the upbeat mood. At the bottom end, Yen is staying at the bottom, while Swiss Franc and Euro also softened. Kiwi and Sterling are positing in the middle.

Technically, Gold's break of 3279.22 support suggests that rebound from 3120.34 has already completed at 3365.92. Corrective pattern from 3499.79 should have started another falling leg. Deeper decline should be seen to 55 D EMA (now at 3190.95) first. Strong rebound from there will keep the pattern from 3499.79 a sideway one. However, sustained break of the 55 D EMA will open up deeper fall through 3120.34 to 100% projection of 3449.79 to 3120.34 from 3365.92 at 2980.47, which is slightly below 3000 psychological level.

In Asia, at the time of writing, Nikkei is up 1.79%. Hong Kong HSI is up 1.07%. China Shanghai SSE is up 0.72%. Singapore Strait Times is down -0.30%. Japan 10-year JGB yield is up 0.003 at 1.521. Overnight, DOW fell -0.58%. S&P 500 fell -0.56%. NASDAQ fell -0.51%. 10-year yield rose 0.043 to 4.477.

Looking ahead, the European calendar is empty with Switzerland, France and Germany on holiday. Later in the day, US will release GDP revision, jobless claims and pending home sales.

RBNZ’s Hawkesby: OCR in neutral zone, July cut not a done deal

RBNZ Governor Christian Hawkesby told Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

With the OCR at 3.25% after this week's reduction, it's now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

NZ ANZ business confidence falls to 36.6, supporting case for further RBNZ easing

New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

FOMC minutes reveal deepening concerns over persistent inflation and trade-led slowdown

The FOMC minutes from the May 6–7 meeting highlighted growing anxiety among policymakers about the dual threat of persistent inflation and deteriorating growth prospects, largely stemming from US trade policies.

Nearly all participants flagged the risk that inflation could be "more persistent than expected" as the economy adjusts to elevated import tariffs. This situation, they warned, could force the Fed into "difficult tradeoffs" if inflation stays stubborn while growth and employment begin to falter.

The Committee agreed that uncertainty surrounding the economic outlook had "increased further", justifying a cautious stance on monetary policy, "until the net economic effects of the array of changes to government policies become clearer."

Fed staff revised their GDP projections lower for 2025 and 2026, citing a larger-than-anticipated drag from recent tariff announcements. Beyond the short-term impact, officials also warned of longer-term structural effects, with trade restrictions likely to slow productivity growth and reduce the economy’s potential "over the next few years."

The labor market outlook has also darkened, with staff forecasting the unemployment rate to rise above its "natural rate" by year-end and remain elevated through 2027.

Inflation forecast was revised higher, with tariffs seen boosting prices notably in 2025, before gradually easing. Inflation is still expected to return to 2% by 2027, but the path there is now more complicated.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.1268; (P) 1.1307; (R1) 1.1329; More...

EUR/USD's break of 1.1255 support suggests that rebound 1.1064 has completed at 1.1417. Corrective pattern from 1.1572 is now extending with another falling leg. Intraday bias is back on the downside for 1.1064 first. Break there will target 100% projection of 1.1572 to 1.1064 from 1.1417 at 1.0909. For now, risk will stay on the downside as long as 1.1417 resistance holds, in case of recovery.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 55 W EMA (now at 1.0858) holds.

RBNZ Governor Christian Hawkesby stold Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

With the OCR at 3.25% after this week's reduction, it's now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

Full NZ ANZ business confidence release here.

The FOMC minutes from the May 6–7 meeting highlighted growing anxiety among policymakers about the dual threat of persistent inflation and deteriorating growth prospects, largely stemming from US trade policies.

Nearly all participants flagged the risk that inflation could be "more persistent than expected" as the economy adjusts to elevated import tariffs. This situation, they warned, could force the Fed into "difficult tradeoffs" if inflation stays stubborn while growth and employment begin to falter.

The Committee agreed that uncertainty surrounding the economic outlook had "increased further", justifying a cautious stance on monetary policy, "until the net economic effects of the array of changes to government policies become clearer."

Fed staff revised their GDP projections lower for 2025 and 2026, citing a larger-than-anticipated drag from recent tariff announcements. Beyond the short-term impact, officials also warned of longer-term structural effects, with trade restrictions likely to slow productivity growth and reduce the economy’s potential "over the next few years."

The labor market outlook has also darkened, with staff forecasting the unemployment rate to rise above its "natural rate" by year-end and remain elevated through 2027.

Inflation forecast was revised higher, with tariffs seen boosting prices notably in 2025, before gradually easing. Inflation is still expected to return to 2% by 2027, but the path there is now more complicated.

Full FOMC minutes here.