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Daily Pivots: (S1) 1.1603; (P) 1.1637; (R1) 1.1658; More….

Intraday bias in EUR/USD is turned neutral with current recovery, and some consolidations could be seen above 1.1607 temporary low. Risk will stay on the downside as long as 55 4H EMA (now at 1.1700) holds. Rebound from 1.1408 could have completed as a corrective three-wave move. Break of 1.1607 will bring deeper fall to retest 1.1408 low. However, sustained break of the EMA will dampen this bearish view and bring stronger rise back to retest 1.1848 instead.

In the bigger picture, the strong support from 38.2% retracement of 1.0176 to 1.2081 at 1.1353 suggests that the pullback from 1.2081 is more likely a corrective move. Strong support was also found in 55 W EMA (now at 1.1542). Focus is back on 1.2 key cluster resistance level. Decisive break there will carry long term bullish implications. Nevertheless, break of 1.1408 support will revive the case of medium term bearish trend reversal.

Daily Pivots: (S1) 0.7839; (P) 0.7856; (R1) 0.7884; More….

Intraday bias in USD/CHF is turned neutral first with current retreat. Some consolidations could be seen below 0.7876 temporary top. Risk will stay on the upside as long as 0.7760 support holds. Above 0.7876 will target 0.7923 first. Firm break there will argue that fall from 0.8041 has completed as a three wave correction, and bring further rise to retest this high.

In the bigger picture, as long as 55 W EMA (now at 0.8035) holds, fall from 0.9200 is expected to continue, as part of the larger down trend. Firm break of 0.7603 will target 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382.

Daily Pivots: (S1) 158.35; (P) 158.59; (R1) 158.99; More...

Intraday bias in USD/JPY remains on the upside at this point. Rise from 155.01 should target 160.71 high. But strong resistance is expected from there to start the third leg of the near term corrective pattern. On the downside, break of 157.30 minor support will argue that the third leg could have started, and target 155.01 support instead.

In the bigger picture, for now, corrective pattern from 161.94 (2024 high) is still seen as completed at 139.87. Rise from there is seen as resuming the long term up trend. So, break of 161.94 is expected at a later stage to resume the long term up trend. However, sustained break of 55 W EMA (now at 154.36) will dampen this view and bring deeper fall back towards 139.87 to extend the pattern from 161.94.

Daily Pivots: (S1) 1.3290; (P) 1.3347; (R1) 1.3379; More...

Intraday bias in GBP/USD is turned neutral first with current recovery, and some consolidations would be seen above 1.3300 temporary low. Further fall is expected as long as 55 4H EMA (now at 1.3483) holds. Below 1.3300 will target a retest on 1.3158 support first. Decisive break there will target 100% projection of 1.3867 to 1.3158 from 1.3657 at 1.2948. However, sustained break of the EMA will dampen the bearish case and turn bias back to the upside for 1.3657 resistance instead.

In the bigger picture, current development suggests that price actions from 1.3867 are merely a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is in favor for a later stage, towards 1.4248 key resistance (2021 high). However, firm break of 1.3008 will at least bring deeper fall to 38.2% retracement of 1.0351 to 1.3867 at 1.2524, with increased risk of bearish reversal.

Markets stopped panicking — for now. After opening the week with a sharp risk-off move driven by surging oil prices and fears of wider Middle East escalation, traders shifted back into wait-and-see mode as the US session approached. Brent crude slipped back below $110, US futures recovered from deeper losses, and broader market sentiment steadied as investors reassessed whether diplomacy might still have one final opening left.

That stabilization was triggered by reports that Pakistan had delivered a revised Iranian proposal to Washington aimed at ending the war in the Middle East. Iranian officials later confirmed that Tehran’s position had indeed been conveyed to the American side through Pakistani mediation. While details remain unclear, the mere existence of a renewed diplomatic channel was enough to cool some of the panic that had swept through energy markets earlier in the day.

But markets are not suddenly optimistic. The mood is closer to conditional calm — a temporary pause because no new escalation has happened yet. Investors broadly understand that time may be running out for negotiations. US President Donald Trump’s Tuesday Situation Room meeting with national security advisers is now looming over global markets as the next major decision point. Reports indicate the White House is explicitly reviewing options for military action against Iran after diplomacy stalled further following the failed Trump-Xi summit last week.

Meanwhile, the oil market itself is becoming increasingly unstable beneath the surface. Reports that Europe could face shortages within weeks are colliding with the approaching end of the seasonal demand lull. As Memorial Day travel demand in the US and holiday consumption in the UK begin lifting fuel demand again, the oil market could enter a “non-linear” phase where physical shortages force buyers to bid aggressively for supply regardless of valuation.

That possibility matters because non-linear commodity moves tend to spread rapidly across the entire macro landscape. Higher oil feeds inflation fears, pushes Treasury yields higher, supports the Dollar, and pressures equities simultaneously. It also explains why traders remain reluctant to fully embrace today’s calmer tone even as Brent retreated from its highs.

In FX markets, Yen led losses as immediate panic hedging faded, while Sterling outperformed alongside Kiwi and Aussie as broader sentiment stabilized modestly. Dollar and Loonie also weakened slightly as oil pulled back from peak levels. Euro and Swiss Franc traded more defensively in the middles.

In Europe, at the time of writing, FTSE is up 0.45%. DAX is up 0.86%. CAC is down -0.32%. UK 10-year yield is down -0.06 at 5.122. Germany 10-year yield is down -0.013 at 3.157. Earlier in Asia, Nikkei fell -0.97%. Hong Kong HSI fell -1.11%. China Shanghai SSE fell -0.09%. Singapore Strait Times rose 0.15%. Japan 10-year JGB yield rose 0.041 to 2.746.

Gold Slips Below 4500, May Stabilize Near 4200 Unless Brent and Treasury Yields Break Crisis Levels

The latest drop in Gold below 4500 is being driven less by fading safe-haven demand and more by rising oil prices, Treasury yields, and “higher for longer” interest rate fears. The next key test sits near 4200. Read More.

Oil Breaks Above $111 as US-Iran Conflict Enters Dangerous New Phase

Brent crude exploded above $111 as failed diplomacy, military escalation, and the UAE infrastructure strike pushed the US-Iran conflict into a dangerous new phase. Read More.

NZ Services Sector Still Contracting Despite April Rebound as Fuel Costs Bite

New Zealand’s services sector showed signs of stabilization in April, with PSI rising from 46.2 to 48.9 and new orders returning to expansion territory. However, businesses continued to warn about rising fuel costs and shipping disruption linked to conflict in the Strait of Hormuz, while smaller firms remained under significant pressure. Read More.

China April Data Misses Across the Board as Domestic Demand Weakens Sharply

China’s April data deteriorated sharply, with retail sales nearly stalling at 0.2% yoy, industrial production slowing, and fixed asset investment unexpectedly turning negative. The weak figures reinforced concerns that rising geopolitical tensions and higher energy costs are weighing heavily on domestic demand. Read More.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3290; (P) 1.3347; (R1) 1.3379; More...

Intraday bias in GBP/USD is turned neutral first with current recovery, and some consolidations would be seen above 1.3300 temporary low. Further fall is expected as long as 55 4H EMA (now at 1.3483) holds. Below 1.3300 will target a retest on 1.3158 support first. Decisive break there will target 100% projection of 1.3867 to 1.3158 from 1.3657 at 1.2948. However, sustained break of the EMA will dampen the bearish case and turn bias back to the upside for 1.3657 resistance instead.

In the bigger picture, current development suggests that price actions from 1.3867 are merely a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is in favor for a later stage, towards 1.4248 key resistance (2021 high). However, firm break of 1.3008 will at least bring deeper fall to 38.2% retracement of 1.0351 to 1.3867 at 1.2524, with increased risk of bearish reversal.

• Investors are offloading the precious metal due to rising bond yields.
• The factors that have driven the dollar higher since March have returned.

The US dollar posted its best weekly gain in the last two months on the realisation that the conflict in the Middle East is set to continue. The US-China summit failed to yield any breakthroughs on unblocking the Strait of Hormuz, and Donald Trump’s threats are not working. The adversaries are at an impasse, oil prices are rising, dragging up the DXY, the dollar index against a basket of the most popular currencies.

There is a persistent sense of déjà vu in the markets. In March, the dollar strengthened as a safe haven and the currency of a net energy exporter. The US did indeed increase oil and petroleum product exports to a new record of 14.2 million barrels per day. In April, the USD index fell on rumours of an imminent end to the conflict in the Middle East. However, the reality turned out to be different. The opposing sides remain far apart, so the Strait of Hormuz blockade will continue.

Macquarie Group intends to remain bullish on the US dollar until the standoff between the US and Iran ends. Monex, citing a series of strong data on the US economy, argues that even after the conflict ends, the greenback will remain stronger than before. JP Morgan is recommending selling EURUSD for the first time in a year.

Conversely, Morgan Stanley believes that the euro will rise to $1.23 by the end of the third quarter due to lower hedging costs for European investors putting money into US assets.

Gold has plummeted to its lowest level since late March amid rising global bond market yields. The yield on 10-year US Treasury bonds has reached its highest level since February 2025, while the yield on Japanese 30-year bonds has risen to its highest level since 1999. Investors are betting on tighter monetary policy worldwide. Yardeni Research is urging the Fed to face the facts and begin a cycle of monetary tightening. Otherwise, the Fed risks losing control of the Treasury market.

Meanwhile, Goldman Sachs estimates that central bank demand for gold bars will rise from 50 tonnes in the year to March to 60 tonnes for the remainder of the year. This should support gold. However, in the short term, the price will remain under pressure due to high liquidity demand from other markets.

Key takeaways: After rays of light in Q1, the Chinese data batch for April released overnight threw a bit of cold water on the recent signs of improvement in domestic demand. Retail sales growth dropped to a three-year low and the housing market continues to be weak. Industrial production and investments also disappointed. The weak domestic demand highlights the importance of exports as the only growth engine currently. With rising downside risks to global growth due to the Iran war, this engine could start to sputter soon. The renewed weakness in retail sales may be related to the uncertainty from the Iran war and calls for a step-up in economic stimulus. A strong GDP in Q1 of 5% y/y gave some cushion to meet the government's 4½-5% growth target but the renewed decline in activity should be a concern in Beijing.

Details

Retail sales dropped from 1.7% y/y to 0.2% y/y (consensus 1.9% y/y). The seasonally adjusted level also showed a big m/m decline after a move higher in March gave some hopes of improvement. Employment indicators show some improvement, though, which should give support to consumers.

Housing remains weak and the rays of light seen in the past months so far remains to be only rays. Home sales have not stabilized on a broad-based level (chart 2) despite some lift in the big cities. Construction starts also trend lower still and property investments declined 13.7% y/y ytd in April after falling 11.2% y/y ytd in March. Home prices are where you spot some rays of light as price declines keep easing (chart 6).

Industrial production declined from 5.7% y/y to 4.1% y/y. It is at odds with decent activity signals from the PMI statistics in April so it is not clear if it is noise or a real deterioration. Overall investment growth weakened to -1.6% y/y ytd coming from 1.7% y/y ytd in March.

The official unemployment rate declined from 5.4% to 5.2% but in seasonally adjusted terms it is moving broadly sideways. However, employment surveys have showed improvement over the past six months (chart 12).

Full report here. 

USD/JPY climbed to 158.93 on Monday, marking the yen's sixth consecutive session of decline. The Japanese currency is under pressure from a stronger dollar amid rising expectations that the Federal Reserve may raise interest rates this year to curb inflation.

US inflation is accelerating due to the energy shock caused by the ongoing Middle East conflict. At the same time, the US and Iran have yet to reach a peace agreement or make progress on reopening the Strait of Hormuz.

The USD/JPY exchange rate is once again approaching the key level of 160, where Japanese authorities intervened in the foreign exchange market to support the yen in late April.

Markets are closely monitoring the risk of fresh intervention by Tokyo. Additional attention has been drawn to statements from Japanese officials that authorities are ready to intervene in the foreign exchange market as many times as necessary.

Support for such expectations has also come from US Treasury Secretary Scott Bessent, who previously praised Japan's actions to stabilise the yen.

Technical Analysis

On the H4 chart, USD/JPY is trading within a consolidation range around 158.33 and is moving higher towards 159.30. A test of this level is likely, followed by a possible pullback to 158.30, with scope for a further decline towards 157.00. The MACD indicator supports this scenario, with its signal line above zero and pointing firmly upwards, indicating continued bullish momentum.

On the H1 chart, USD/JPY has reached 159.00 and is pulling back towards 158.80. A subsequent rise towards 159.30 is possible. The Stochastic oscillator confirms this scenario, with its signal line above 80 and pointing firmly downwards towards 50, indicating that short-term downside pressure may develop.

Conclusion

USD/JPY continues its six-day rally as the yen returns to intervention-warning territory. The dollar is being bolstered by expectations that the Fed may need to raise rates to combat inflation fuelled by the Middle East energy shock, while US-Iran negotiations remain stalled. With the pair approaching the psychologically critical 160 level, where Japanese authorities intervened in late April, markets are on high alert for potential official action. Tokyo has repeatedly signalled its readiness to intervene, and US Treasury Secretary Bessent has offered support for Japan's approach. Technically, further upside towards 159.30 appears likely before any pullback, but intervention risks may cap gains near current levels.

Gold came under renewed pressure earlier today, briefly breaching below $4,500 level as the recent decline resumed. Although the precious metal later recovered some ground, the broader near-term outlook remains tilted to the downside as rising oil prices continue driving Treasury yields and Dollar higher together. The combination is creating an increasingly difficult environment for non-yielding assets, particularly as markets begin repricing inflation and interest rate expectations again.

The key driver behind Gold’s weakness is the oil-led inflation shock developing alongside escalating Middle East tensions. Brent crude’s surge above $111 has reinforced expectations that major central banks, especially the Federal Reserve, may need to keep interest rates elevated for longer despite slowing global growth. Higher oil prices feed directly into inflation expectations, which in turn lift benchmark yields and support the Dollar.

Technically, Gold remains vulnerable while 55 4H EMA (now at 4,649.90), caps rebounds. Further decline is expected toward 100% projection of 4,889.24 to 4,500.67 from 4,773.50 at 4,384.93. However, downside momentum has not yet become disorderly, and there should be meaningful support emerging between the 4,200 and 4,300 region. In particular, 138.2% projection level at 4,236.49 would likely provide a floor for stabilization. Overall, the current decline is viewed as the second leg of the broader corrective pattern from 4,098.45 low.

Still, that relatively stable outlook depends heavily on oil and bond markets remaining contained. If Brent crude remains below $120 crisis threshold and US 10-year Treasury yields stay below 5%, Gold should stabilize around the mentioned 4200/4300 region and then attempt a rebound. However, decisive break of either of those macro levels would likely trigger another wave of aggressive selling in Gold, quickly exposing the key psychological support around 4,000.

Market Overview

The crypto market capitalisation has fallen by 5.2% over the past seven days to $2.56 trillion, with the decline accelerating in the second half of the week. Over the past 24 hours, the decline amounted to 1.5%, with selling pressure mounting at the start of Asian trading and a pullback towards the 50-day moving average and the lows seen in late April. The market is thus approaching a point at which the bulls’ strength will be tested. A move lower would technically break the uptrend that has been in place since early April, and dash hopes of an end to the bear market that has been ongoing since October. Among the most active coins, roughly one in ten is rising, with the heaviest losses seen in Bitcoin Cash (-11.6%), Official Trump (-5.5%) and Doge (-4.6%). Zcash (+3%), Toncoin (+1.8%) and Cosmos (+0.9%) are gaining ground.

Bitcoin appears to be in the bears’ grip. Repeated failures to break above the 200-day moving average have sent the market into a downtrend, pushing the price of the leading cryptocurrency down to $76.6K. A 6% loss over less than four days is hardly a capitulation, but rather a disappointment for those who actively bought crypto in April. This corrective pullback has knocked the price out of the growth channel of the past month and a half. However, the uptrend is not formally considered broken until the price falls below previous local lows. And right now, the market is teetering on the edge. A breach below $76K could be followed by an acceleration of the decline, with potential targets near $65K.

News Background

According to SoSoValue, net outflows from spot BTC ETFs amounted to $1 billion over the week, the highest since late January. Outflows from US spot Ethereum ETFs have persisted for two of the last three weeks, totalling $255 million over the week.

Bitcoin has returned to the average purchase price for short-term whales for the third time since October — the $79K–$80K range, notes analyst MorenoDV. The previous two similar tests in October 2025 and January 2026 ended in heavy selloffs.

Bitcoin’s share on centralised crypto exchanges has fallen to 5.6% of the total coin supply, a six-year low, according to Santiment. Large investors continue to move BTC into long-term storage outside of trading platforms.

Ethereum’s correlation with Bitcoin and the technology sector will weaken in the future. Growth drivers will be the development of DeFi, the tokenisation of real-world assets, and the integration of AI into blockchain, according to SharpLink, a company accumulating Ethereum in its reserves and the second largest in terms of volume after BitMine.

Strategy is prepared to sell part of its BTC holdings to repurchase its own convertible bonds, according to a filing with the SEC. The company plans to spend approximately $1.38 billion on the buyback, with the transaction scheduled to close by 19 May.

Following the latest adjustment, Bitcoin mining difficulty increased by 3.12% to 136.61 T. The figure has fallen by approximately 8% since the start of the year and is more than 12% below the all-time high recorded in October.