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Throughout the conflict in the Middle East, gold has moved in tandem with risk assets and has shown a negative correlation with oil and the dollar. Unsurprisingly, Tehran’s announcement that it was opening the Strait of Hormuz triggered a surge in gold to monthly highs, whilst the US seizure of an Iranian tanker caused the precious metal to take a step down.

Markets are gradually growing weary of geopolitics and are beginning to consider the consequences of the conflict in the Middle East. Investors are asking: how high will inflation rise and how long will it last? Rapid consumer price inflation will force central banks to raise rates aggressively, which is negative for gold. Standard Chartered forecasts that the average price in the second quarter will fall to $4,605 per ounce before rising to $4,850 in the third.

However, if the Fed considers the inflation surge to be temporary, it will not tighten monetary policy. A fall in real Treasury yields could provide a tailwind for gold. Alongside monetary policy, HSBC cites central banks’ insatiable appetite for bullion, as well as concerns over the US budget deficit and financial stability, as drivers of growth.

Despite gold’s sensitive reaction to news from the Middle East, it stands to benefit from both an end to the conflict and its extension. In the former scenario, inflation will not rise as high as feared, and central banks may abandon plans to raise rates. In the latter scenario, persistently high oil prices will deal a serious blow to the global economy, forcing central banks to focus on the risks of recession. And in such circumstances, they typically throw the economy a lifeline through large-scale monetary stimulus. This will create a favourable environment for rising precious metal prices.

Daily Pivots: (S1) 158.51; (P) 158.86; (R1) 159.16; More...

No change in USD/JPY's outlook as consolidation continues below 160.45. Further rise is expected with 157.49 cluster support (38.2% retracement of 152.25 to 160.45 at 157.31) intact. On the upside break of 160.45 will target a retest on 161.94 high. However, firm break of 157.31/49 will bring deeper fall back to 61.8% retracement at 155.38 next.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 153.80) holds. Firm break of 161.94 will pave the way to 61.8% projection of 102.58 to 161.94 from 139.87 at 176.75.

Daily Pivots: (S1) 0.7759; (P) 0.7800; (R1) 0.7824; More….

Intraday bias in USD/CHF remains neutral as consolidations continues above 0.7774. Upside of recovery should be limited below 0.7933 resistance to bring another fall. Sustained break of 61.8% retracement of 0.7603 to 0.8041 at 0.7770 will resume the decline from 0.8041 to retest 0.7603 low.

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 0.8059) 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) 1.3492; (P) 1.3519; (R1) 1.3562; More...

Intraday bias in GBP/USD remains neutral as it's extending consolidations below 1.3598. With 1.3379 support intact, further rise is favor. On the upside, sustained break of 61.8% retracement of 1.3867 to 1.3158 at 1.3596 will pave the way to retest 1.3867 high. However, firm break of 1.3379 will bring deeper fall back to 1.3158 low 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 back in favor for a later stage, towards 1.4248 key resistance (2021 high).

Daily Pivots: (S1) 1.1746; (P) 1.1768; (R1) 1.1809; More….

EUR/USD is still bounded in consolidations below 1.1848 and intraday bias remains neutral. With 1.1662 support intact, further rally is in favor. On the upside, sustained trading above 61.8% retracement of 1.2081 to 1.1408 at 1.1824 will pave the way to retest 1.2081 high. However, firm break of 1.1662 support will bring deeper decline back towards 1.1408 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 1.1507). 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.

No confirmation on US–Iran talks means no conviction in markets—for now. The focus shifts to Kevin Warsh’s testimony before the Senate Banking Committee at 14:00 GMT. With geopolitics offering no clear signal, investors are turning to Warsh’s testimony for guidance on the future direction of the Federal Reserve and the credibility of its policy framework.

Warsh's prepared remarks have already been made public through advanced copies of his opening statement. He is focusing on three primary pillars to secure his confirmation:

Central Bank Independence: His most emphasized point is a vow to keep monetary policy "strictly independent." He is expected to tell the committee, "The Fed must stay in its lane," arguing that independence is at greatest risk when the central bank strays into fiscal or social policies.

Inflation Commitment: He has expressed a firm commitment to fighting inflation and achieving price stability, a move likely intended to calm markets concerned about potential political pressure for rapid rate cuts.

Response to Political Pressure: Addressing the friction between the White House and current Chair Jerome Powell, Warsh’s remarks suggest he views the Fed's insulation from short-term political pressure as a "mechanical necessity" for a stable economy.

With Powell’s term ending on May 15, today's testimony is the critical hurdle for Warsh to clear if the transition is to remain on schedule for mid-May.

In the currency markets, Kiwi is currently the strongest one for the week so far, boosted by today's Q1 NZ inflation data. Swiss Franc is the second best, and then Loonie. Yen is sitting at the bottom, followed by Aussie, and then Dollar. Euro and Sterling are positioning in the middles.

In Europe, at the time of writing, FTSE is down -0.14%. DAX is up 0.39% CAC is down -0.23%. UK 10-year yield is up 0.026 at 4.862. Germany 10-year yield is down -0.005 at 2.980. Earlier in Asia, Nikkei rose 0.89%. Hong Kong HSI rose 0.48%. China Shanghai SSE rose 0.07%. Singapore Strait Times rose 0.22%. Japan 10-year JGB yield fell -0.012 to 2.386.

US Retail Sales Surge 1.7% mom in March, Core Spending Signals Resilient Demand

US retail sales rose 1.7% in March, beating expectations, with strong gains in ex-auto spending. Core sales growth also signed resilient consumer momentum. Read More.

ECB’s de Guindos Says ‘Keep a Cool Head’ as Energy Prices Drive Inflation Uncertainty

The ECB is not rushing to act. De Guindos urges a “cool head” as energy prices drive inflation—but the real question is whether it spreads across the economy. Read More.

German ZEW Sentiment Sinks to -17.2 as Iran War Hits More Than Just Energy Costs

Germany’s ZEW economic sentiment falls sharply as Iran war fuels fears of energy shortages and weak investment, highlighting deeper risks to economic growth. Read More.

NZD/JPY to Resume Up Trend to 96.50 as Inflation Boosts RBNZ Rate Hike Bets

NZD/JPY is breaking higher as inflation pressures remain firm. With non-tradable prices holding up, markets are strengthening bets on an RBNZ rate hike later this year. The cross now looks ready to resume the medium term up trend towards 96.50 target. Read More.

NZ Inflation Holds at 3.1% as Non-Tradables Stay Firm, Energy Pressures Build

New Zealand inflation isn’t easing as expected. With CPI holding at 3.1% and non-tradable prices still firm, the data points to persistent domestic pressure—keeping RBNZ rate hike expectations alive. Read More.

New Zealand Business Confidence Slumps as Conflict Weighs, Inflation Pressures Rise, RBNZ July Hike Expected

New Zealand business confidence has dropped sharply as geopolitical tensions weigh on outlook—but pricing pressures are rising. With firms still lifting prices, NZIER sees the RBNZ moving toward a July rate hike. Read More.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1746; (P) 1.1768; (R1) 1.1809; More….

EUR/USD is still bounded in consolidations below 1.1848 and intraday bias remains neutral. With 1.1662 support intact, further rally is in favor. On the upside, sustained trading above 61.8% retracement of 1.2081 to 1.1408 at 1.1824 will pave the way to retest 1.2081 high. However, firm break of 1.1662 support will bring deeper decline back towards 1.1408 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 1.1507). 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 retail sales rose 1.7% mom to USD 752.1B in March, beating expectations of 1.3% mom and pointing to stronger-than-anticipated consumer demand. Ex-auto sales climbed 1.9% mom to USD 612.4B, also above forecasts of 1.3% mom.

However, the composition shows a more nuanced picture. Sales excluding both autos and gasoline rose just 0.6% mom, indicating that core consumption growth was more moderate. Excluding gasoline alone, sales also increased 0.6% mom, suggesting that part of the headline strength may be linked to higher fuel prices rather than a broad-based acceleration in demand.

On a broader basis, retail sales for the January to March period rose 3.7% from a year ago, with non-store retailers leading gains at 10.1% yoy, highlighting continued strength in online spending.

Full US retail sales release here.

The Dollar was firmer in Asian / European trading on Tuesday and partially recover Monday’s losses (down 0.36% for the day), but near-term action remains within the boundaries of recent congestion ($97.40/$98.22) as traders await fresh direction signals, mainly from the Middle East peace talks.

Technical studies on daily chart remain predominantly negative (MAs in full bearish configuration with several bear-crosses being formed / negative momentum studies) but partially countered by Friday’s long-tailed Doji candle, which points to strong downside rejection and the downside attempts being so far limited by the base of ascending and thickening daily Ichimoku cloud ($97.80).

Fresh strength eyes initial resistance at $98.20 zone (near-term range top, reinforced by daily Tenkan-sen, turned sideways) break of which to ease immediate downside risk and expose more significant barriers at $98.57 (Fibo 38.2%$100.48/$97.40), $98.82 (daily cloud top) and 98.94 (50% retracement / daily Kijun-sen.

Otherwise, the downside would remain vulnerable (particularly in case the price remains within current congestion) though firm break through cloud base will be needed to generate fresh negative signal and expose next targets at $97.30 zone (Friday’s spike low / Fibo 61.8% of $95.38/100.48 / lower 20-d Bollinger band).

However, geopolitical factor is expected to remain the main driver, with greenback to face increased pressure on scenario of positive developments in the region (continuation of the peace talks / extended ceasefire / potential peace agreement) that would reduce demand for safe haven dollar, ease fears of stronger inflationary pressure = change of Fed’s recent narrative of need for policy tightening and make the dollar less attractive for investors.

Res: 98.15; 98.30; 98.52; 98.82.
Sup: 97.91; 97.50; 97.75; 97.31.

ECB Vice-President Luis de Guindos signaled a cautious approach ahead of next week’s policy meeting, emphasizing the need to assess whether higher energy costs are feeding into broader inflation. Speaking in Spain, he stressed that policymakers must “keep a cool head” amid what he described as “tremendous uncertainty.”

De Guindos noted that current energy price developments sit between the ECB’s baseline scenario—where inflation rises only temporarily—and a more adverse scenario involving persistent spillovers into other prices. The key question for policymakers is whether rising oil and gas costs begin to affect wages and services, which would justify a stronger policy response.

His comments align with recent signals from President Christine Lagarde and other officials that the ECB is not yet ready to react to energy-driven inflation alone. The central bank appears set to hold rates steady next week, maintaining a wait-and-see stance as it evaluates incoming data.

Key takeaways

• Risk-on rebound fuels copper rally: Copper surged ~17% from its March low, driven by improved sentiment after the US–Iran ceasefire, recovering most war-related losses and stabilizing near pre-conflict levels.
• Fundamentals are still supportive: Global manufacturing activity remains in expansion (PMI diffusion ~72%), providing a solid demand backdrop for copper, with upcoming flash PMI data as a key near-term catalyst.
• Bullish flag signals potential breakout: A consolidation pattern suggests continuation higher if 6.0680 breaks, targeting 6.1755–6.2910; failure below 5.8790 risks a deeper pullback toward moving average support zones.

Copper (XCU/USD) has also benefited from a revival of risk-on appetite in the past seven trading sessions due to the temporary two-week ceasefire agreement between the US and Iran since 8 April 2026 to negate the risk of stagflation driven by fears of a prolonged global oil supply disruption.

Dr Copper has benefited from recent risk-on behaviour

Fig. 1: Global Cross Assets Performance from 27 Feb 2026 to 20 Apr 2026 (Source: MacroMicro).

Copper has rallied by 17% from the 23 March 2026 low of 5.1889 to print a two-month high of 6.1037 on 15 April 2026 as market participants look forward to a peace deal resolution between the US and Iran, erasing its early loss of 14% from the onset of the US-Iran war. Based on the 27 February 2026 pre-war baseline till Monday, 20 Apr 2026, LME spot copper has traded almost unchanged at -0.75% (see Fig. 1).

In the past three days, a game of poker has emerged as both sides are trying to build a “stronger hand” ahead of the second round of peace talks to take place in Pakistan, either on Tuesday or Wednesday, as stated by US President Trump via a media interview.

The US has continued to enact a naval blockade on Iranian-registered oil tankers in the Strait of Hormuz, and Iran has continued to force a closure in the strait to prevent international vessels from transporting and obtaining oil supplies in the GCC region.

Global manufacturing PMI is the second driver to watch

Fig. 2: Global Manufacturing PMI Diffusion Index as of March 2026 (Source: MacroMicro).

The longer-term price movement of copper is highly sensitive to manufacturing activities, as it is a vital component in the global manufacturing supply chains and industrial usage. Higher manufacturing activities tend to translate to a higher demand for copper, in turn, creating a positive feedback loop into the price of copper.

Manufacturing Purchasing Managers’ Index data compiled by S&P Global can be used as a leading indicator to gauge manufacturing activities.

Despite the rising risk of stagflation in the past six weeks since the start of the US-Iran war on 28 February 2026, on the aggregate, global manufacturing activities were still growing at a modest pace in March 2026.

The PMI Diffusion Index measures the proportion of countries whose manufacturing PMI is above or equal to 50 (an indication of expansion in activities), where it stood at 72.3% in March 2026, just down slightly from 74.5% in April 2026 (see Fig. 2).

Hence, there are still more than 50% of global economies’ manufacturing sectors in expansion modes, in turn, providing long-term bullish support for copper prices.

On Thursday, 23 April 2026, S&P Global will release flash PMI data for a slew of developed economies (Australia, Japan, the Eurozone, the UK, and the US). Therefore, a continuation of the expansion pace seen in these economies’ manufacturing PMIs is likely to maintain the ongoing short-term bullish trend of copper (XCU/USD).

Let's now focus on the short-term trajectory (1 to 3 days) of copper (XCU/USD) and its supporting elements from a technical analysis perspective.

Copper (XCU/USD) – Potential upside trigger at 6.0680

Fig. 3: Copper (XCU/USD) minor trend as of 21 Apr 2026 (Source: TradingView).

Fig. 4: Copper (XCU/USD) long-term secular trend as of 21 Apr 2026 (Source: TradingView).

Copper (XCU/USD) has shaped a minor corrective pull-back of 2.65% from its recent two-month high of 6.1037 printed on 15 April 2026.

Watch the 5.8790 key short-term pivotal support, and a clearance of 6.0680 (upper boundary of the bullish flag) triggers the start of another potential bullish impulsive up move sequence (see Fig. 3).

The next intermediate resistances stand at 6.1755 and 6.2465/6.2910 (also a Fibonacci extension).

On the other hand, a break and an hourly close below 5.8790 invalidates the bullish tone for another round of minor corrective decline to expose the next intermediate support zone of 5.7357/5.6545 (also the 20-day and 50-day moving averages).

Key elements to support the near-term bullish bias on copper (XCU/USD)

• The recent corrective pull-back from the 15 April 2026 high of 6.1037 has taken the form of a bullish consolidation chart pattern called “bullish flag,” with its upper boundary acting as near-term resistance at 6.0680.
• The price action of copper (XCU/USD) has continued oscillating within a minor ascending channel in place since the 23 March 2026 low and still has room to move towards the upper boundary of the channel at around 6.1755/6.2910.
• The hourly RSI momentum indicator has managed to stage a rebound close to its support at the 32 level.