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Daily Pivots: (S1) 1.1136; (P) 1.1201; (R1) 1.1238; More...

Range trading continues in EUR/USD and intraday bias stays neutral. On the upside, break of 1.1292 resistance will argue that correction from 1.1572 has completed after defending 38.2% retracement of 1.0176 to 1.1572 at 1.1039. Intraday bias will be back on the upside for retesting 1.1572. However, sustained break of 1.1039 will dampen this view and target 61.8% retracement at 1.0709 next.

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 1.0789) holds.

Global financial markets are trading in tight ranges today, with little conviction seen across major asset classes. U.S. futures are pointing to a mildly weaker open. Despite a surprise decline in US producer prices in April, suggesting a possible easing of inflation pressures, there was little follow-through in market reaction. Earlier today, stronger-than-expected UK Q1 GDP data also offered limited support to the Pound. Overall sentiment remains contained as traders await further clarity on the trade front.

Much of the current hesitation in markets can be attributed to persisting trade uncertainty. The EU Foreign Affairs Council is holding a key meeting today in Brussels to discuss trade relations with the US and broader economic security. Ahead of the meeting, European trade ministers expressed dissatisfaction with the limited UK-US trade agreement announced last week, which retains a 10% tariff on British exports. EU officials signaled that such a deal would not suffice to deter retaliatory measures.

European Trade Commissioner Maros Sefcovic confirmed a recent conversation with U.S. Commerce Secretary Howard Lutnick and noted that both sides have agreed to step up engagement. Additional meetings are anticipated in Brussels or during upcoming OECD sessions. However, the complexity of negotiations and diverging expectations between the EU and US continue to cast doubt on a swift resolution.

Elsewhere, trade talks between the US and India also show signs of friction. US President Donald Trump claimed that India had offered a trade deal with “no tariffs” on American goods. However, India’s foreign minister Subrahmanyam Jaishankar quickly pushed back, saying that talks remain ongoing and nothing has been finalized. It's believed that India would  demand strict reciprocity on tariffs, while it's unlikely to concede easily in politically sensitive sectors such as agriculture, where protectionist pressures remain high.

In the currency markets, Aussie is leading gains for the week, followed by Dollar and then Sterling. On the weaker side, the Swiss Franc is the laggard, with Kiwi and Euro also underperforming. Yen and Canadian Dollar are holding middle positions.

In Europe, at the time of writing, FTSE is up 0.34%. DAX is up 0.10%. CAC is down -0.19%. UK 10-year yield is down -0.042 at 4.674. Germany 10-year yield is down -0.061 at 2.64. Earlier in Asia, Nikkei fell -0.98%. Hong Kong HSI fell -0.79%. China Shanghai SSE fell -0.68%. Singapore Strait Times rose 0.54%. Japan 10-year JGB yield rose 0.022 to 1.479.

US retail sales rises 0.1% mom in Apr, ex-auto sales up 0.1% mom

US retail sales rose 0.1% mom to USD 724.1B in April, matched expectations. Ex-auto sales rose 0.1% mom to USD 582.5B, below expectation of 0.3% mom. Ex-gasoline sales rose 0.1% mom to USD 673.1B. Ex-auto & gasoline sales rose 02% mom to USD 531.5B.

Total sales for the February through April period were up 4.8% from the same period a year ago.

US PPI at -0.5% mom, 2.4% yoy in April, below expectations

US PPI fell -0.5% mom in April, below expectation of 0.2% mom. PPI services fell -0.7% mom while PPI goods was unchanged. PPI less foods, energy and trade services ticked down by -0.1% mom, the first decline since April 2020.

For the 12 months, PPI slowed from 2.7% yoy to 2.4% yoy, below expectation of 2.5% yoy. PPI less foods, energy and trade services rose 2.9% yoy.

US initial jobless claims unchanged at 229k

US initial jobless claims was unchanged at 229k in the week ending May 10, slightly below expectation of 230k. Four-week moving average of initial claims rose 3k to 230.5k.

Continuing claims rose 9k to 1881k in the week ending May 3. Four-week moving average of continuing claims rose 1k to 1874k.

Eurozone industrial output surges 2.6% mom in March, led by capital goods

Eurozone industrial production jumped 2.6% mom in March, significantly outperforming expectations of 1.7% mom. The surge was driven by strong gains across key categories, including capital goods (+3.2%), durable consumer goods (+3.1%), and non-durable consumer goods (+2.3%). Intermediate goods also posted a modest 0.6% rise, while energy output dipped by -0.5%.

Across the broader EU, industrial production rose by 1.9% mom. Ireland led the gains with a remarkable 14.6% surge, followed by Malta (+4.4%) and Finland (+3.5%). However, there were notable declines in Luxembourg (-6.3%), Denmark, Greece (both -4.6%), and Portugal (-4.0%).

UK economy beats expectations with 0.7% qoq growth in Q1, 0.2% mom in March

The UK economy expanded by 0.7% qoq in Q1, slightly ahead of expectations at 0.6% qoq. Growth was led by a 0.7% qoq rise in the services sector and a robust 1.1% qoq increase in production output, while construction activity was flat. Importantly, real GDP per head also rose by 0.5% qoq, ending two consecutive quarters of contraction.

On the expenditure side, growth was underpinned by a 2.9% qoq rise in gross fixed capital formation, signaling strong business investment. Household consumption also edged up by 0.2% qoq, while net trade contributed positively as exports rose by 3.5% qoq and imports by 2.1% qoq.

Monthly data for March further supported the upbeat quarterly reading, with GDP rising by 0.2% mom, exceeding expectations of flat growth. Services output was the standout, rising 0.4% mom and contributing the most to overall GDP expansion. Meanwhile, construction rose by 0.5% mom, offsetting a -0.7% mom decline in production output.

Australia jobs surge 89k in April, unemployment rate unchanged at 4.1%

Australia’s labor market delivered a strong upside surprise in April, with employment rising by 89k, sharply above expectations of 20.9k. Full-time jobs accounted for 59.5k of the gain, while part-time employment rose by 29.5k.

Unemployment rate held steady at 4.1%, in line with forecasts, as the surge in employment was matched by a jump in labor force participation from 66.8% to 67.1%.

Despite the headline strength, hours worked were largely unchanged on the month. Nonetheless, the employment-to-population ratio rose by 0.3 percentage points to 64.4%, just shy of the record high reached in January.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1136; (P) 1.1201; (R1) 1.1238; More...

Range trading continues in EUR/USD and intraday bias stays neutral. On the upside, break of 1.1292 resistance will argue that correction from 1.1572 has completed after defending 38.2% retracement of 1.0176 to 1.1572 at 1.1039. Intraday bias will be back on the upside for retesting 1.1572. However, sustained break of 1.1039 will dampen this view and target 61.8% retracement at 1.0709 next.

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 1.0789) holds.

US initial jobless claims was unchanged at 229k in the week ending May 10, slightly below expectation of 230k. Four-week moving average of initial claims rose 3k to 230.5k.

Continuing claims rose 9k to 1881k in the week ending May 3. Four-week moving average of continuing claims rose 1k to 1874k.

Full US jobless claims release here.

US PPI fell -0.5% mom in April, below expectation of 0.2% mom. PPI services fell -0.7% mom while PPI goods was unchanged. PPI less foods, energy and trade services ticked down by -0.1% mom, the first decline since April 2020.

For the 12 months, PPI slowed from 2.7% yoy to 2.4% yoy, below expectation of 2.5% yoy. PPI less foods, energy and trade services rose 2.9% yoy.

Full US PPI release here.

US retail sales rose 0.1% mom to USD 724.1B in April, matched expectations. Ex-auto sales rose 0.1% mom to USD 582.5B, below expectation of 0.3% mom. Ex-gasoline sales rose 0.1% mom to USD 673.1B. Ex-auto & gasoline sales rose 02% mom to USD 531.5B.

Total sales for the February through April period were up 4.8% from the same period a year ago.

Full US retail sales release here.

WTI oil price fell over 3% on Thursday morning, as positive sentiment was soured by the latest encouraging news about US-Iran nuclear talks which may result in easing of sanctions on Iranian oil export and unexpected strong build in US crude stocks that added to growing concerns about oversupply.

Thursday’s strong acceleration extends pullback from recovery top ($63.47) after repeated failure at important Fibo barrier at $63.38 (50% of $71.98/$54.77) and just under the base of falling daily cloud.

Fresh weakness cracked strong supports at $60.29/00 zone (Fibo 38.2% of $55.14/$63.47 recovery leg / psychological, reinforced by 10DMA).

Clear break here to generate fresh bearish signal for deeper drop.

The notion is supported by strengthening negative momentum and stochastic emerging from overbought zone, however bears may face increased headwinds due to significance of supports.

Consolidation above $60 zone may precede fresh push lower, but caution on bounce above $61.50 (broken Fibo 23.6%) which may sideline bears and generate initial signal of an end of corrective phase.

News about progress in US-Iran talks will be closely watched for further direction signals.

Res: 61.00; 61.50; 62.44; 63.00
Sup: 60.00; 59.30; 59.00; 58.32

The Australian dollar is showing limited movement on Thursday. In the European session, AUD/USD is trading at 0.6412, down 0.12% on the day.

Australia job growth surges

Australia's economy added 89 thousand jobs in April, blowing past the market estimate of 20 thousand and above the upwardly revised gain of 36.4 thousand in March. Full-time employment was up an impressive 59.5 thousand. The unemployment rate was unchanged at 4.1%.

Today's jobs report indicates that the labor market remains strong, but that is not expected to change minds at the Reserve Bank of Australia. The money markets have priced in a quarter-point cut at next week's meeting, which would lower the cash rate to 3.85%.

RBA widely expected to lower rates next week

The central bank is expected to cut rates in response to weakening inflation and the uncertainty over US tariffs. Australia's reliant economy could take a significant hit if the US and China trade war continues, which makes the recent tariff deal between the two countries a welcome first step. The agreement, which slashes tariff rates between the US and China, is valid for 90 days and negotiations will continue during that time. Only a few weeks ago, escalating trade tensions threatened to spill into a global trade war but the US has taken a step backwards, reaching a trade deal with the UK and a truce with China.

President Trump's erratic trade policy has roiled the financial markets and made it difficult for the RBA to make inflation and growth forecasts. Still, the RBA appears ready to lower rates next week, which will boost domestic growth. The central bank is expected to remain cautious in its rate policy in the turbulent global economic environment. At home, the labor market has been resilient, inflation is generally under control but consumer spending has been weaker than expected.
AUD/USD Technical

• AUD/USD has pushed below support at 0.6426 and is testing support at 0.6410. Below, there is support at 0.6398
• There is resistance at 0.6438 and 0.6454

AUD/USD 4-Hour Chart, May 15, 2025

The GBP/USD pair has again lost direction, hovering around 1.3283 on Thursday after hitting a seven-day high mid-week.

Key drivers influencing GBP/USD movement

The US dollar weakened on Wednesday, allowing the pound to regain ground. This shift followed ongoing currency negotiations between the US and South Korea, where both parties agreed to continue discussions on exchange rate policies. The reduced demand for the greenback lent support to most major currencies, including sterling.

Domestically, the market focus shifted to the Bank of England (BoE) commentary. Deputy Governor Sarah Breeden emphasised the necessity of long-term reforms in the bond market. At the same time, Monetary Policy Committee (MPC) member Catherine Mann noted that further rate cuts would require more evident signs of easing price pressures – essentially, a sustained drop in inflation.

Meanwhile, the latest UK labour market data revealed an increase in the unemployment rate to 4.5%, the highest since 2021, accompanied by a slowdown in wage growth.

These factors have collectively reinforced expectations of further monetary policy easing by the BoE. Despite internal MPC dissent, last week’s 25bps rate cut caught markets off guard, as many expected a pause in the easing cycle.

Technical analysis: GBP/USD

H4 Chart:

• The pair continues to trade within a broad consolidation range around 1.3260
• The current range extends to 1.3360, with a technical pullback to 1.3260 (testing from above) now underway
• A drop towards 1.3200 is anticipated. A break below this level could extend the downtrend to 1.3100, potentially stretching further to 1.3030
• This bearish outlook is supported by the MACD indicator, whose signal line remains above zero but is trending sharply upward

H1 Chart:

• The pair broke above 1.3260, reaching the local upside target of 1.3360
• Today’s corrective decline is testing 1.3260 again
• A renewed upward move towards 1.3380 is possible if support holds
• The Stochastic oscillator aligns with this scenario, with its signal line above 50 and rising towards 80

Conclusion

The GBP/USD remains in a holding pattern, awaiting fresh catalysts for a decisive move. While technical indicators suggest near-term volatility, the broader trend hinges on BoE policy signals and global risk sentiment. Traders should watch for a breakout beyond 1.3360 or a drop below 1.3200 for clearer directional bias.

Asian Session Market Wrap

Asian stocks dropped on Thursday after rising for four straight days, as the boost from US-China trade talks started to fade.

Stocks in Japan, China, and US futures all fell, showing a more cautious mood after a week of strong gains driven by trade progress and steady economic performance. Investors are concerned that stocks have risen so much they could be easily affected by unexpected events. European stock futures also dipped slightly.

The European Open

Heading into the European open, European shares were being weighed down by energy stocks which saw big losses due to falling oil prices, while investors looked ahead to important U.S. economic data and comments from Federal Reserve Chair Jerome Powell.

Oil prices fell over 3% due to the possibility of a U.S.-Iran nuclear deal, which could lift sanctions and increase supply. Big oil companies like BP and Shell saw their shares drop by 5% and 3%, pulling down the main stock index.

Gold prices faltered once more with the precious metal printing an Asian session low of around the $3125/oz handle before recovering to trade around $3158/oz at the time of writing.

Looking at US equities, the mood remained positive in the Asian session as markets still digest a US-China trade truce, a UK agreement, and major Gulf deals which have boosted investor confidence.

The S&P 500 went up by 0.1% overnight, and the Nasdaq 100 rose 0.5%, driven by Nvidia's gains, which erased its 2025 losses.

Following the European open however, both the S&P 500 and Nasdaq have turned red for the day, trading 0.57% and 0.85% lower respectively.

On the FX front, safe-haven currencies like the Japanese yen and Swiss franc strengthened, with the yen rising 0.6% to 145.88/USD after hitting a one-month low of 148.65 earlier this week. The Swiss franc also gained 0.6%, reaching 0.8376/USD.

The euro increased by 0.2% to 1.12. A Bloomberg report on Wednesday mentioned that the US is not pushing for a weaker dollar in tariff talks, which helped ease market worries.

The dollar index, which tracks the dollar against six other currencies, fell 0.2% to 100.81 but is still set to gain 0.4% for the week. However, the index is down nearly 7% for 2025.

Currency Power Balance

Source: OANDA Labs

Economic Data Releases and Overall Sentiment

Looking at market sentiment, it remains largely positive. The main focus will be U.S. retail sales data, and investors will also watch for updates on potential trade deals following the U.S.-China tariff truce.

There will also be a speech by Fed Chair Jerome Powell and earnings from Walmart which could rattle markets ahead of the US Open.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the day - DAX

From a technical standpoint, the DAX index has been consolidating above a key support area having printed fresh all-time highs on Monday.

The support area between 23212 and 23471 continues to hold firm underpinning the index and providing bulls with optimism that another bullish leg may be in offing.

A move higher still needs a clear break and acceptance above the 24000 handle which could lead to a bigger move to the upside.

On the downside, a break of support at 23212 could open up a retest of the 20 and 50-day MAs which rest at 22704 and 22460 respectively.

DAX Daily Chart, May 15, 2025

Source: TradingView.com (click to enlarge)

As shown on the XAU/USD chart, the price of gold fell below $3,130 this morning – its lowest level since 10 April.

Since its peak in May, gold has lost more than 8% in value per ounce.
Why Is Gold Falling?

Bearish sentiment in the gold market may be fuelled by easing geopolitical tensions. According to media reports:

→ China and the US have already reported progress in reaching a trade agreement, while details of potential deals with India, Japan, and South Korea are currently being developed.

→ Iran is reportedly willing to sign a nuclear deal in exchange for the lifting of sanctions. In addition, Donald Trump may lift sanctions on Syria during his visit to the Middle East.

→ The situation between India and Pakistan has stabilised, and today, talks between Russia and Ukraine are expected to take place in Istanbul, with a potential ceasefire on the agenda.

These developments could be seen as reducing the appeal of gold as a safe-haven asset.

Technical Analysis of the XAU/USD Chart

In our 7 May gold price analysis, we:

→ outlined a descending channel (marked in red);

→ noted that bearish pressure persisted above $3,400.

Since then, the gold (XAU/USD) price has continued to move within this channel, breaking support around the $3,200 level and approaching a key support zone formed by:

→ the lower boundary of the red channel;

→ a long-term trendline (marked in blue);

→ a former resistance level (highlighted with arrows) at $3,140.

Given these conditions, traders should consider a scenario in which a minor rebound may occur – for instance, towards the median line of the red channel.

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