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• The precious metal has benefited from rumours of a de-escalation of the conflict in the Middle East.
• The US and Japan may agree on coordinated currency interventions.

The US dollar bounced back from sellers amid doubts about a swift resolution to the Middle East conflict and positive US economic data. ADP reported a 109K increase in private sector employment in April, the best performance since the start of 2025. The stabilisation of the labour market against a backdrop of accelerating inflation allowed the DXY to rebound by 0.5% from the day’s lows, recouping half of its losses since the start of the day on Wednesday. However, this was short-lived.

The US and Iran are working to resume talks, which are due to take place by 15 May. Markets react first and ask questions later. Consequently, rumours of a de-escalation of the conflict in the Middle East initially pushed the EURUSD pair to its highest level since February, near 1.1800. However, subsequent doubts caused the pair to retreat.

Geopolitics will cause more pain for Europe than for the US. All the more so, as Donald Trump threatens to raise tariffs on European cars from 15% to 25%. The economic slowdown, coupled with rising inflation due to higher energy prices, is creating stagflationary risks, forcing the ECB to tread carefully. Even if rates are raised, it is unlikely to be by much. The differential will remain in favour of the Americans, limiting the upside potential of EURUSD.

Apart from geopolitics, the dollar has also been influenced by Japanese government actions. From a fundamental perspective, the US dollar is stronger than the yen. However, a successful market reversal in favour of a stronger yen and a weaker dollar could place a heavy burden on Tokyo. The White House may opt for coordinated intervention with many countries, following the Plaza Accord model of 1985. Scott Bessent intends to visit Japan to meet with Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama to discuss, among other things, the foreign exchange market.

Rumours of de-escalation in the Middle East have allowed gold to post its best daily performance since late March. The precious metal is reacting sensitively to the market’s reduced inflation expectations following the fall in oil prices. This makes a Fed rate hike in 2026 inadvisable. If, however, official data on Friday disappoints, gold will gain fresh momentum.

Daily Pivots: (S1) 1.3539; (P) 1.3591; (R1) 1.3646; More...

Outlook in GBP/USD remains unchanged as range trading continues. Intraday bias stays neutral, and further rise is expected with 1.3453 support intact. On the upside, above 1.3657 will target 61.8% projection of 1.3158 to 1.3598 from 1.3453 at 1.3725 first. Firm break there will target a retest on 1.3867 high. However, break of 1.3453 will turn bias back to the downside for 1.3158 support 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).

Daily Pivots: (S1) 0.7759; (P) 0.7801; (R1) 0.7829; More….

Intraday bias in USD/CHF stays on the downside for 61.8% projection of 0.8041 to 0.7774 from 0.7923 at 0.7758. Firm break there will extend the fall from 0.8041 to 100% projection at 0.7656. On the upside, above 0.7847 minor resistance will turn bias neutral again.

In the bigger picture, rebound from 0.7603 medium term bottom is seen as correcting the fall from 0.9200 only. Rejection by 55 W EMA (now at 0.8042) will affirm this bearish case, and setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage. Though, sustained break of 55 W EMA will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high).

Daily Pivots: (S1) 154.95; (P) 156.46; (R1) 157.90; More...

Intraday bias in USD/JPY is turned neutral first and some sideway trading could be seen. Risk will stay on the downside as long as 157.92 resistance holds. Below 155.01 will resume the fall from 160.71 to 61.8% projection of 160.71 to 155.48 from 157.92 at 154.68. Firm break there will target 100% projection at 152.69. That would be close to key 152.25 cluster support (38.2% retracement of 139.87 to 160.71 at 152.74).

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 154.01) will dampen this view and bring deeper fall back towards 139.87 to extend the pattern from 161.94.

Daily Pivots: (S1) 1.1693; (P) 1.1746; (R1) 1.1801; More….

Outlook in EUR/USD is unchanged as range trading continues. Intraday bias remains neutral, and with 1.1642 support intact, rise from 1.1408 is expected to continue. On the upside, firm break of 1.1848 will target 1.2081 high next. However, firm break of 1.1662 support will indicate the the rebound from 1.1408 has completed, and bring deeper decline back towards this low 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 1.1537). 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.

Markets appear to be entering a new phase of post-conflict positioning, with oil prices falling again on hopes of a full reopening of the Strait of Hormuz while precious metals begin rebuilding bullish momentum. The sharp moves across commodities suggest investors are increasingly looking beyond the immediate US-Iran conflict and starting to reposition for a more normalized global macro environment.

The clearest signal is coming from oil markets. Brent crude extended its decline again today and broke below the $97 level, while WTI moved closer toward the key $90 handle. The price action suggests traders are becoming increasingly confident that the Strait of Hormuz could soon reopen fully to international shipping and energy flows if a peace agreement between Washington and Tehran materializes.

Oil traders now appear increasingly hopeful that commercial normalization could return to the region, allowing tankers to move freely again without disruption or informal “tolls” imposed by Iran’s Islamic Revolutionary Guard Corps on vessels passing through the Strait. That shift represents a major unwind of the geopolitical premium that had fueled the earlier oil surge.

Elsewhere, equities and currencies were notably calmer today after this week’s powerful risk-on rally. US stock futures traded largely steady following the record-breaking gains in S&P 500 and NASDAQ earlier in the week. Dollar also stabilized within recent ranges and appears to be awaiting a fresh directional catalyst from broader market sentiment.

Meanwhile, the strongest momentum today has shifted toward precious metals, particularly Silver. Silver surged above the psychologically important $80 mark, significantly outperforming Gold and reinforcing the idea that investors are increasingly rotating back into higher-beta opportunities rather than pure defensive positioning.

Some investors are already beginning to argue that the record-breaking bull markets in Gold and Silver could resume later this year if a durable US-Iran peace settlement is achieved and the temporary pressure from higher interest rates fades. Both metals posted extraordinary gains during 2025, with Gold surging 66% and Silver soaring 135%, before experiencing sharp and volatile corrections this year.

Recent declines in precious metals had been driven by fears of higher interest rates, a stronger Dollar linked to rising oil prices, and heavy position liquidation during periods of market stress. But as oil retreats and the inflation shock potentially eases, investors are revisiting the longer-term structural bullish case for metals.

That longer-term story remains centered on central bank diversification away from US government debt, persistent physical Silver supply tightness, and expanding demand tied to green energy technologies and AI infrastructure. In many ways, the US-Iran conflict may have strengthened rather than weakened those structural themes by reinforcing the strategic importance of energy diversification and renewable technologies.

For now, markets appear to be transitioning away from “war panic” and toward “post-conflict positioning.” Oil is pricing normalization, equities are consolidating record highs, and Silver’s breakout suggests investors are once again willing to chase higher-beta opportunities tied to long-term structural growth themes.

In the currency markets, for the week so far, Kiwi is the best performer, followed by Aussie, and then Swiss Franc. Loonie is the worst, followed by Dollar, and then Sterling. Euro and Yen are positioning in the middle.

In Europe, at the time of writing, FTSE is down -0.53%. DAX is down -0.05%. CAC is up 0.09%. UK 10-year yield is down -0.035 at 4.913. Germany 10-year yield is down -0.026 at 2.980. Earlier in Asia, Nikkei surged 5.58%. Hong Kong HSI rose 1.57%. China Shanghai SSE rose 0.48%. Singapore Strait Times rose 0.30%. Japan 10-year JGB yield fell -0.023 to 2.483.

Silver Breaks 80 as Markets Rotate From Defense to Offense

Silver’s breakout above 80 may be signaling a major shift in market psychology. As Iran de-escalation hopes fuel a global risk-on rally, investors are rotating away from defensive Gold positioning and into higher-beta opportunities, with Silver emerging as one of the clearest beneficiaries. Read More.

US Jobless Claims Edge Higher to 200k, Labor Market Still Stable

US jobless claims rose slightly last week, but the broader labor market picture remains stable. Continuing claims declined and trend measures improved, reinforcing the view that layoffs remain contained despite slower economic momentum and geopolitical uncertainty. Read More.

Eurozone Retail Sales Slip -0.1% mom in March as Fuel Demand Weakens

Eurozone consumer spending remains fragile. Retail sales slipped again in March as falling fuel and food purchases offset resilient non-food demand, while Germany’s sharp decline highlighted persistent weakness in the region’s largest economy. Read More.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1693; (P) 1.1746; (R1) 1.1801; More….

Outlook in EUR/USD is unchanged as range trading continues. Intraday bias remains neutral, and with 1.1642 support intact, rise from 1.1408 is expected to continue. On the upside, firm break of 1.1848 will target 1.2081 high next. However, firm break of 1.1662 support will indicate the the rebound from 1.1408 has completed, and bring deeper decline back towards this low 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 1.1537). 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.

US initial jobless claims rose modestly by 10k to 200k in the week ending May 2, slightly above expectations of 199k. Despite the increase, claims levels remain historically low.

Underlying trends in the data were broadly stable. The four-week moving average of initial claims fell by -4,500 to 203,250, helping smooth out weekly volatility and reinforcing the view that layoffs remain relatively contained.

Continuing claims also improved modestly, falling by -10k to 1.766m in the week ending April 25.

Full US jobless claims release here.

Brent oil remains firmly in red and extends weakness on Thursday after falling 10% on Wednesday and ending day with 5.5% loss.

Growing hopes for a US-Iran peace deal provided relief, keeping oil prices under increased pressure for the third straight day.

Bears probe again through important supports at $100.67 and $100.00 (50% retracement of $86.08/$115.26 upleg / psychological) which were broken on Wednesday’s spike to $96.76 but failed to register a daily close below these levels (market closed at $101.86).

Strong optimism about possible solution for the Middle East that would open way for stabilization of global oil market, which was strongly hit by closure of one of the world’s key oil / gas supply routes, continues to deflate oil prices.

Sustained break below $100 level to generate fresh bearish signal for attack at next strong support at $97 zone (Fibo 61.8% / Wednesday’s spike low), violation of which to confirm the signal and open way for further weakness (base of thick daily cloud lays at $91.36).

Broken pivots at $100.00/67 and $100.94 (cloud top) reverted to resistances, which should cap potential upticks to keep larger bears intact.

Res: 100.00; 100.97; 102.63; 103.43.
Sup: 97.25; 96.76; 93.93; 92.97.

Silver’s sharp rally above the psychologically important 80 level is signaling more than just strength in precious metals—it reflects a broader shift in market psychology toward aggressive risk-taking. As geopolitical tensions surrounding Iran ease and global equities continue surging to record highs, investors are increasingly rotating away from defensive positioning and toward higher-beta assets with stronger upside potential.

The immediate catalyst for the move has been the sharp improvement in risk sentiment driven by growing optimism over a potential US-Iran agreement to end the conflict and reopen the Strait of Hormuz. The resulting “peace trade” has fueled record highs in S&P 500, NASDAQ, Nikkei, and KOSPI, while falling oil prices and broad Dollar weakness have further supported metals prices. Within precious metals, however, Silver is now clearly outperforming Gold.

That divergence is significant because the two metals often play different roles in investor positioning. Gold is traditionally viewed more as a defensive store of value and capital preservation asset during periods of uncertainty. Silver, by contrast, tends to behave more like a high-beta expression of optimism and growth expectations due to its stronger cyclical and speculative characteristics. Silver’s outperformance therefore suggests markets are increasingly shifting from defense into offense.

In many ways, the current move reflects a broader mentality change across global markets. Investors are no longer primarily focused on hedging geopolitical catastrophe. Instead, they are increasingly chasing opportunities tied to improving sentiment, easing war risks, and expanding risk appetite. Silver’s rally is becoming a visible reflection of that transition.

Technically, Silver’s rise from 70.83 is now viewed as the third leg of the broader rebound from the 60.97 low. Momentum remains firmly bullish following the break above 80, with bias staying to the upside as long as 76.95 minor support holds. Next target is 61.8% projection of 60.97 to 83.04 from 70.83 at 84.46. Firm break there could trigger another acceleration phase toward 100% projection at 92.90.

However, the outlook may become more challenging near the resistance zone between 96.40 and 61.8% retracement of 121.83 to 60.97 at 98.58, where strong technical barriers converge. It is a likely region for profit-taking and renewed selling pressure on the first attempt.

For now, though, the message from Silver is that markets are no longer hiding in defensive assets—they are increasingly chasing higher-octane opportunities as global risk appetite strengthens.

Fundamental Background

The fundamental backdrop for EUR/USD in early May is shaped by diverging monetary policy expectations on both sides of the Atlantic. At its 30 April meeting, the ECB left interest rates unchanged; however, Governing Council members Joachim Nagel and Peter Kazimir signalled the possibility of a rate hike as early as June amid persistent inflationary pressure. Meanwhile, the Federal Reserve has maintained rates within the 3.50–3.75% range without giving clear indications of imminent easing, while US inflation stood at 3.3% year-on-year in March.

Tensions in the Strait of Hormuz continue to keep oil prices near four-year highs, increasing inflation risks for the import-dependent eurozone. An additional pressure factor is the possibility of Washington raising tariffs on European cars to 25%.

Technical Picture

On the daily chart, EUR/USD formed and completed an inverted head-and-shoulders pattern in March. The neckline of the formation is located above the point of control (POC) of the horizontal volume profile, and the breakout above the neckline triggered a rally towards the 1.1850 area. The profile covers the 1.1440–1.1690 range, while the POC zone at 1.1550–1.1570 — representing the highest concentration of horizontal volume during the analysed period — acts as the main support area for the current market structure.

Following the pullback from 1.1850, the pair continues to trade above the upper boundary of the profile. The 1.1850 level remains the nearest significant resistance, while 1.1400 serves as the deeper support level for the entire profile zone. The RSI + MAs indicator shows readings of 56, 52 and 53: RSI remains above both moving averages, reflecting a moderate advantage for buyers without signs of strong momentum.
Key Takeaways

The fundamental backdrop remains mixed: expectations of tighter ECB policy continue to support the euro, while energy-related risks and weak eurozone growth are limiting bullish momentum. From a technical perspective, the key factor is whether price can hold above the POC zone and the 1.1690 level — a condition that could help sustain the bullish trend.

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