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Daily Pivots: (S1) 162.27; (P) 163.01; (R1) 164.02; More...

Intraday bias in EUR/JPY remains neutral and outlook is unchanged. On the upside, firm break of 164.16 will resume whole rise from 154.77. Next target will be 100% projection of 154.77 to 164.16 from 158.27 at 167.66. However, break of 158.27 will bring deeper fall back to 154.40/77 support zone.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 190.53; (P) 191.04; (R1) 191.43; More...

Further rise remains mildly in favor in GBP/JPY as long as 189.28 minor support holds. Rebound from 184.35 would target 195.95 resistance next. However, break of 189.28 will suggest that the rebound has completed and turn bias back to the downside.

In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 175.94 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 0.9340; (P) 0.9389; (R1) 0.9415; More....

Intraday bias in EUR/CHF remains neutral for the moment. Rebound from 0.9218 is either a corrective move, or the third leg of the pattern from 0.9204. Break of 0.9445 will resume the rebound towards 0.9660 resistance. However, on the downside, break of 0.9336 will bring retest of 0.9204/18 support zone.

In the bigger picture, prior rejection by long-term falling channel resistance (now at 0.9555) retains medium term bearishness. That is, down trend from 1.2004 (2018 high) is still in progress. Firm break of 0.9204 (2024 low) will confirm resumption. This will remain the favored case as long as 0.9660 resistance holds.

Daily Pivots: (S1) 1.1358; (P) 1.1391; (R1) 1.1454; More...

Intraday bias in EUR/USD is turned neutral first. On the downside,, break of 1.1306 will extend the correction from 1.1572. But strong support should be seen from 38.2% retracement of 1.0176 to 1.1572 at 1.1039 to contain downside. On the upside, break of 1.1572 will resume larger up trend.

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 now remain the favored case as long as 55 W EMA (now at 1.0792) holds.

Daily Pivots: (S1) 141.37; (P) 142.64; (R1) 143.28; More...

Intraday bias in USD/JPY remains neutral for the moment. On the upside, above 144.02 will resume the rebound from 139.87. But ear term outlook will stay bearish as long as 38.2% retracement of 158.86 to 139.87 at 147.12 holds. On the downside, firm break of 142.26 will argue that the recovery from 139.87 short term bottom has completed as a corrective move. Retest of 139.87 should then be seen next in this case.

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) 1.3334; (P) 1.3389; (R1) 1.3499; More...

Intraday bias in GBP/USD is back on the upside with breach of 1.3422. Immediate focus is now on 1.3433 key resistance. Firm break there will confirm larger up trend resumption. Next near term target is 61.8% projection of 1.2706 to 1.3422 from 1.3232 at 1.3674. However, break of 1.3232 support will indicate rejection from 1.3433, and bring deeper decline back to 55 D EMA (now at 1.2978) and possibly below.

In the bigger picture, price actions from 1.3433 are seen as a corrective pattern to the up trend from 1.3051 (2022 low). Rise from 1.2099 could either be resuming the up trend, or the second leg of a consolidation pattern. Overall, GBP/USD should target 1.4248 key resistance (2021 high) on break of 1.3433 at a later stage.

Daily Pivots: (S1) 0.8159; (P) 0.8239; (R1) 0.8280; More….

Intraday bias in USD/CHF remains neutral for the moment. On the upside, above 0.8333 will resume the rebound from 0.8038 short term bottom. But upside should be limited by 38.2% retracement of 0.9200 to 0.8038 at 0.8482. On the downside, below 0.8196 minor support will bring retest of 0.8038. Firm break there will resume larger down trend.

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 0.8783) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

Daily Pivots: (S1) 1.3799; (P) 1.3846; (R1) 1.3875; More...

Intraday bias in USD/CAD is turned neutral first. On the upside, break of 1.3903 minor resistance will extend the rebound from 1.3780. But upside should be limited by 1.4150 support turned resistance (38.2% retracement of 1.4791 to 1.3780 at 1.4166). On the downside, firm break of 1.3780 short term bottom will resume the whole fall from 1.4791.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4150 resistance turned support holds. firm break of 38.2% retracement of 1.2005 (2021 low) to 1.4791 at 1.3727 will pave the way back to 61.8% retracement at 1.3069.

Markets

The US yield curve yesterday abruptly swapped a bear steepening move for a flattening one with net daily changes varying between -5.5 (2-yr) to -1.9 bp (30-yr). The intraday rise against the backdrop of an empty eco calendar and relative silence on the trade front lost momentum around the start of US dealings. A dramatically weaker Dallas Fed manufacturing activity index did the rest even though the indicator has nowhere near the importance of the likes of the ISMs. Either way, the headline index dropped to its lowest level since the pandemic while the six month outlook was the poorest in 1.5 years amid the “insanity” and “chaos” Trump’s tariff had sparked. Bunds underperformed. German yields rose, supported by the technical charts. Changes varied between 2.3 bps (2-yr) and 5.8 bps (30-yr). The US yield decline weighed on the dollar. DXY moved a bit deeper below 100 again and EUR/USD keeps the pressure on 1.14 high. USD/JPY slid from 143.64 at the open to 142.01 in the close. Sterling had a nice run. EUR/GBP was (and still is) testing the 0.85 area. The White House yesterday said trade talks with the UK are moving in a very positive direction. US stocks gradually fell before finding a bottom mid-session. Wall Street eventually closed mixed with minor gains for the DJI and losses for the Nasdaq.

The economic calendar will flush the market in the coming days. We’re curious to find out whether (US) eco data regain importance now the tariff storm ebbed (not disappeared, though). In today’s kick-off the US releases JOLTS job openings and a closely followed consumer confidence indicator (Conference Board). The ECB publishes its monthly consumer inflation expectations survey while the first inflation and Q1 GDP numbers are on tap in the likes of Belgium and Spain. We stick to our call of having entered a short-term period of market consolidation. The dollar is currently having a slight upper hand in the FX market going into the numbers. From a technical point of view we could see EUR/USD oscillating in the 1.1274 (2023 top) - 1.1573 (April high) range. GBP’s momentum may stretch to first resistance at EUR/GBP 0.84735. We feel bond yields have dropped far enough but calling the bottom proves tricky. The 10-yr yield in the US is currently attacking support at 4.20% (50% retracement on the Sept-Jan rally) with the next reference located near 4.10%. Germany’s 10-yr yield is set for a lower open and is eying strong support around 2.4%.

News & Views

Czech central bank (CNB) deputy governor Eva Zamrazilova in an interview yesterday indicated that the CNB easing cycle may be coming to an end, Bloomberg reported. The CNB currently has its policy rate at 3.75% and has a next policy meeting next week on May 7. Zamrazilova indicated that she will decide between cutting the key interest rate by 25 bps or holding it unchanged. She also questions market pricing that there might be scope for further easing over the next year. The deputy governor in particular referred to the housing market as an upside driver of inflation as rising property prices via imputed rent will support a trend of higher core and headline inflation. Even as the trade war is curbing global demand, Zamrazilova sees other aspects of deglobalization creating inflationary pressures. In this respect, she also indicated that market expectations for a terminal interest rate at around 3.0% might be overly optimistic. Yesterday, CNB Governor Michl in another interview said that any further easing would be very cautious. The Czech koruna yesterday was again well bid and strengthened further below EUR/CZK 25.00 (24.94).

The Liberal Party according to the latest available results is expected to have won the parliamentary elections in Canada. However, for now it is still highly uncertain whether the party led by Mark Carney will secure the 172 seats that are needed of secure an outright majority in the House of Commons. Latest results/estimates currently give the Liberal party 165 seats (43% of the national vote) with 147 for the Conservative party. This might force Carney to cooperate with other parties to pass legislation. In this respect an important role is seen for the Bloc Quebecois which is estimated to have secured 23 seats. Managing the trade war with the US and addressing the challenges that it brings will be an important task of the new government. The Canadian dollar initially rebound after first results came in, but (more than) reversed these gains as chance grew that the government would fail to reach an outright majority (USD/CAD 1.387 currently).

Germany’s GfK Consumer Sentiment Index for May rose from -24.3 to -20.6 and outperforming expectations for a decline to -26.0.

In April, key underlying indicators also showed encouraging signs. Income expectations rose sharply for a second straight month, climbing 7.4 points to 4.3, their highest level since October 2024. Economic expectations increased modestly for a third consecutive month. Willingness to save fell, while willingness to buy improved slightly.

Rolf Bürkl, consumer expert at NIM, noted that US President Donald Trump’s aggressive tariff announcements in early April have "not yet had lasting impacts on consumer sentiment" in Germany.

Instead, German consumers appear more reassured by the domestic political backdrop, particularly the successful conclusion of coalition negotiations and the imminent formation of a new government. The easing of political uncertainty has helped mitigate potential negative effects from external trade tensions.

Full Germany Gfk consumer sentiment release here.