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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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Market Overview

The crypto market capitalisation has remained around $2.69 trillion, as the largest coins by market cap consolidate following their recent gains, while smaller altcoins have accelerated their growth. The top performers over the last 24 hours were Toncoin (+29%), NEAR (+10.7%) and Internet Computer (+9.6%). The worst performers were recent stars such as Zcash (-5%), Doge (-3.8%) and Bitcoin Cash (-2.9%).

Bitcoin rose to $82.8K on Wednesday, approaching but not breaking through the 200-day moving average (currently at $83.2K). From its local highs, the leading cryptocurrency retreated to $81.3K at the time of writing, pausing its upward momentum. This pause also coincided with the RSI touching the overbought territory (>70) on daily timeframes. It is worrying that the previous three touches of these levels (in August, October and January) were followed by sharp selloffs. It is quite logical that market participants are taking a breather to assess the situation and gather strength. Thus, the current pause is not a sign of buyer exhaustion.

News Background

The Bitcoin futures market is experiencing its longest streak of negative funding rates in the last 10 years: it has remained in negative territory for 67 consecutive days, according to K33 Research. This situation heightens the risk of a short squeeze.

XWIN Japan identifies the $93K level as a key medium-term target for Bitcoin, driven by the closing of the price gap on the CME. However, the movement will not necessarily be straightforward, and the market may initially move lower.

The options market does not confirm a full-fledged breakout, QCP Capital points out. Monthly implied volatility remains around 41%, and demand for put options persists: market participants are buying Bitcoin but continue to hedge their risks.

Strategy reported a net loss of $12.5 billion for the first quarter of 2026. The main reason for this was ‘paper’ losses from the revaluation of the Bitcoin reserve against the backdrop of a fall in BTC. Strategy founder Michael Saylor admitted that the company may sell some of its Bitcoin to pay dividends, even though he had previously denied the possibility.

GBP/USD climbed to 1.3599 on Thursday, with sterling testing its highest levels since mid-February during the previous session. The pound continues to gain support from weakening demand for the US dollar as a safe-haven asset amid growing optimism surrounding a possible agreement between the US and Iran.

According to Axios, the White House is close to signing a framework memorandum with Iran that could pave the way for ending the conflict and launching nuclear negotiations. Tehran’s response is expected within the next 48 hours, although a final agreement has yet to be secured.

Investors are also closely monitoring local elections in the United Kingdom, where opinion polls suggest that Keir Starmer’s party could face notable losses.

On the monetary policy front, expectations for the Bank of England have shifted slightly. Markets are currently pricing in around 50 basis points of tightening by the end of the year, equivalent to two rate increases. Previously, investors had anticipated as many as three hikes.

Technical Analysis

On the H4 chart, GBP/USD is trading within a broad consolidation range above 1.3515, currently extending towards 1.3650. A corrective move lower towards 1.3344 remains possible. After this correction, the pair may consolidate again. A breakout higher would reopen the path towards 1.3650, while a downside move could extend losses towards 1.3344. The MACD indicator supports this scenario, with the signal line above zero and pointing firmly lower, indicating fading bullish momentum.

On the H1 chart, GBP/USD is trading within a compact consolidation range around 1.3615. The range has extended lower towards 1.3578, with the pair attempting to rebound towards 1.3615 as a retest from below. After that, another decline towards 1.3565 may follow. The Stochastic oscillator confirms this outlook, with the signal line below 50 and pointing downwards towards 20, signalling increasing short-term downside pressure.

Conclusion

Sterling remains supported by improving global risk sentiment and reduced demand for the US dollar as a defensive asset. However, political uncertainty in the UK and shifting expectations around Bank of England policy could limit further upside. In the near term, GBP/USD is likely to remain highly sensitive to geopolitical headlines and broader market sentiment.

Eurozone retail sales edged lower in March, with the volume of retail trade falling -0.1% mom, outperforming expectations for a steeper -0.4% mom decline. The data suggest consumer spending remains soft, as higher energy costs and geopolitical uncertainty continue weighing on confidence across the region.

The monthly decline in Eurozone was driven primarily by weaker fuel spending, with sales of automotive fuel in specialized stores dropping -1.6% mom. Food, drinks, and tobacco sales also slipped -0.3% mom. However, non-food products excluding fuel showed resilience, rising 0.6% mom and partially offsetting broader weakness in household consumption.

Across the wider EU, retail sales fell -0.3% mom. Country-level performance was highly uneven, with Slovenia, Luxembourg, and Belgium recording the strongest monthly gains, while Germany posted a sharp -2.1% decline. The data reinforce the broader picture of a fragile European consumer sector, where spending remains constrained by elevated inflation pressures and slowing economic momentum.

Full Eurozone retail sales release here.

The Australian dollar continues to strengthen, pushing to fresh 2021–2022 highs, supported by a combination of the Reserve Bank of Australia’s tight monetary stance and a weaker US dollar. This week’s rate hike by the RBA has been a key driver, widening yield differentials and boosting demand for the Australian currency, which has reinforced the ongoing uptrend. Additional pressure on the US dollar came from weak labour data, including the ADP report, increasing expectations of a more accommodative Fed policy.

The current market structure suggests that both AUD/USD and AUD/CAD have broken out of recent consolidation ranges and are now advancing towards multi-year highs. Trading at these levels creates a decision zone where liquidity is being reallocated, with the market assessing whether prices can hold above extremes or fall back into prior ranges.

In the near term, the key event for markets will be the US Non-Farm Payrolls report, while other macro releases are likely to play a secondary role. The NFP reaction could significantly influence expectations for Fed policy and set the direction for the US dollar.

AUD/USD

AUD/USD is trading near yearly highs, maintaining bullish momentum after breaking out of its range. Dollar weakness combined with RBA policy support continues to favour further gains, with the current area acting as a key test for breakout confirmation.

From a technical perspective, continuation of the uptrend depends on the 0.7230 level holding as support. However, in the absence of fresh catalysts ahead of key data releases, a pullback towards 0.7130–0.7160 remains possible.

Key Events For AUD/USD:

• today at 15:30 (GMT+3): US initial jobless claims
• today at 17:00 (GMT+3): US construction spending
• today at 18:30 (GMT+3): Atlanta Fed GDPNow indicator

AUD/CAD

AUD/CAD reached a new yearly high yesterday at 0.9870 and still shows potential for a move towards 2021 extremes near 0.9990. If the upper boundary of the recent range turns into support, the bullish momentum could strengthen further.

At the same time, a slowdown at current levels could lead to a return back into the broken range, creating a false breakout scenario and opening the door for a corrective move.

Key Events For AUD/CAD:

• today at 13:00 (GMT+3): Canada leading economic indicators
• today at 23:30 (GMT+3): US Federal Reserve balance sheet
• tomorrow at 15:30 (GMT+3): Canada employment change

Overall, both currency pairs remain in a strong upward phase supported by fundamental drivers. The current resistance zone is a key decision area: a sustained breakout would open the way for further gains, while weak follow-through or stronger US data could trigger a return into prior ranges and a corrective pullback. Upcoming macroeconomic releases are likely to be the decisive catalyst for the next market move.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Daily Pivots: (S1) 210.82; (P) 212.53; (R1) 214.30; More...

Intraday bias in GBP/JPY stays neutral at this point. Further decline is expected as long as 214.21 holds. Below 210.43 will target 209.58 support first. Break will target 38.2% retracement of 184.35 to 216.58 at 204.28. However, firm break of 214.21 will turn bias back to the upside for stronger rebound instead.

In the bigger picture, while the fall from 216.58 is steep, there is no clear sign of trend reversal yet. The long term up trend could still extend to 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90 on resumption. However, sustained break of 55 W EMA (now at 205.45) will argue that it's already in medium term down trend for 184.35 support.

Daily Pivots: (S1) 182.17; (P) 183.61; (R1) 185.16; More...

Intraday bias in EUR/JPY is turned neutral first, and risk will stay on the downside as long as 185.02 resistance holds. Break of 182.01 will resume the fall from 187.93 to 180.78 support next. However, firm break of 185.02 will turn bias back to the upside for stronger rebound.

In the bigger picture, the pullback from 187.93 is steep, there is no sign of reversal yet. Uptrend from 114.42 is still expected to resume at a later stage to 78.6% projection of 124.37 (2022 low) to 175.41 (2025 high) from 154.77 at 194.88. However, sustained break of 55 W EMA (now at 177.76) will argue that it's already in a medium term down trend to 175.41 resistance turned support and below.

Daily Pivots: (S1) 0.8627; (P) 0.8639; (R1) 0.8657; More…

Range trading continues in EUR/GBP and intraday bias remains neutral. Further fall is expected with 0.8652 support turned resistance intact. . On the downside, decisive break of 0.8610 key support carry larger bearish implications and pave the way to 0.8466 fibonacci level next. However, firm break of 0.8652 will turn bias back to the upside for stronger rebound to 55 D EMA (now at 0.8677) and above.

In the bigger picture, focus is back on 38.2% retracement of 0.8821 to 0.8863 at 0.8618. Sustained break there will confirm that whole rise from 0.8221 has completed at 0.8863. Deeper decline should then be seen to 61.8% retracement at 0.8466 at least. For now, risk will stay mildly on the downside as long as 55 D EMA (now at 0.8680) holds, in case of recovery.

Daily Pivots: (S1) 1.6180; (P) 1.6238; (R1) 1.6291; More...

Intraday bias in EUR/AUD stays on the downside for retesting 1.6125 low. Decisive break there will confirm resumption of whole down trend from 1.8554. For now, risk will stay on the downside as long as 1.6371 resistance holds, in case of recovery.

In the bigger picture, fall from 1.8554 (2025 high) is in progress and deeper decline should be seen to 61.8% retracement of 1.4281 to 1.8554 at 1.5913, which is slightly below 1.5963 structural support. Decisive break there will pave the way back to 1.4281 (2022 low). For now, risk will stay on the downside as long as 55 W EMA (now at 1.7069) holds, even in case of strong rebound.

Daily Pivots: (S1) 0.9137; (P) 0.9158; (R1) 0.9170; More....

EUR/CHF is still defending 0.9155 cluster support (38.2% retracement of 0.8979 to 0.9264 at 0.9155) support and intraday bias remains neutral. On the upside, above 0.9177 minor resistance will bring stronger rebound back to 0.9264 resistance. However, sustained trading below 0.9155 will turn bias back to the downside for deeper pullback to 61.8% retracement at 0.9088 and possibly below.

In the bigger picture, considering bullish convergence condition in W MACD, a medium term bottom should be in place at 0.8979. Sustained trading above 55 W EMA (now at 0.9268) will add more credence to this case. Further break of 0.9394 resistance will pave the way to 0.9660 resistance next. However rejection by the 55 W EMA will set up another fall through 0.8979 low at a later stage.