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USDJPY advances for the third straight day, as stalling peace talks in the Middle East fuel uncertainty and boost dollar’s safe-haven appeal, while fresh rise of inflation in the US adds to Fed’s hawkish stance that underpins the greenback.

Fresh advance emerged after USDJPY’s strong fall from Japan’s authorities’ interventions, ran out of steam that resulted in multiple failure at the base of thick daily cloud and formation of bear-traps, which contributed to reverse of direction and subsequent strong bounce.

Bulls cracked important resistances at 157.90 zone (May 5 lower top / daily Kijun-sen / 50% retracement of 160.72/155.02 fall) with break and close above this barrier needed to generate fresh bullish signal and strengthen near-term structure, which is still fragile (14-d momentum is in negative territory / Stochastic is overbought and DMAs in mixed setup) and warns that recovery may face increased headwinds.

On the other hand, Doji reversal pattern is forming on weekly chart and provides support, as weekly studies are predominantly bullish.

We will continue to closely monitor developments on geopolitical front, which strongly influences market action, as well as reaction at key 157.90 barrier.

Firm break higher to open way for further recovery and expose targets at 158.55 (Fibo 61.8%) and more significand daily cloud top (158.81).

Conversely, failure to clear 157.90 pivot at first attempt would probably keep the price on hold for consolidation, with 100DMA (157.36) marking significant support, which should hold dips to keep near-term bulls in play.

Res: 157.90; 158.25; 158.55; 158.81
Sup: 157.50; 157.36; 157.10; 156.72

• Starmer’s power struggle and the associated political risks are weighing on the pound.
• A potential new energy crisis is looming over the euro.

The US dollar reacted calmly to the April US inflation data. Consumer prices surged to a three-year high of 3.8% y/y, raising the chances of the Fed tightening monetary policy this year to 33%, from 16% a week earlier. The date when the probability of a rate hike from current levels exceeds 50% has now shifted from April to March 2027.

The biggest problem is the rise in energy prices. These are always volatile, and monetary policy can do little to address them. Therefore, central banks generally focus on core inflation. In April, it rose to 2.8%. The figure is moving further away from the 2% target and, due to second-order effects, could rise further. On the other hand, CPI indices remain well below their 2022 levels, so there is no need yet for the Fed to tighten monetary policy aggressively.

Meanwhile, MUFG highlights the depletion of gas stocks in the Amsterdam–Rotterdam–Antwerp energy hub. Natural gas prices in Europe have not risen as sharply as they did four years ago, due to full storage facilities. However, should the situation deteriorate, the risk of a decline in the EURUSD exchange rate will begin to mount.

Goldman Sachs cites the ongoing energy shock, the strength of the US economy, high inflation, and the associated rise in Treasury bond yields as arguments in favour of selling EURUSD. The bank also recommends buying the US dollar against the pound and the Swedish krona.

The British pound recorded its worst daily fall since early April. Following Labour’s defeat in the local elections, an increasing number of party members are calling for Keir Starmer to step down as leader. The Polymarket betting market has raised the probability of such an outcome by the end of 2026 from 48% to 66% in just a few days.

Investors fear that the government will be led by a proponent of fiscal stimulus, reigniting the conflict between loose fiscal policy and tight monetary policy, as in 2022. At that time, GBPUSD plummeted to a historic low. So far, parallels can only be seen in the debt market, where, against a backdrop of bond sell-offs, yields on 30-year Gilts have risen to their highest level since 1998.

Eurozone industrial production rose 0.2% mom in March, slightly below expectations of 0.3% mom. Across the broader European Union, industrial production increased a stronger 0.8% mom, helped by robust gains in several Eastern European economies.

The Eurozone sector breakdown showed a mixed picture beneath the headline improvement. Output of capital goods rose 1.1% mom while intermediate goods production increased 0.9% mom, suggesting some resilience in investment-related manufacturing activity. Durable consumer goods also edged up 0.5% mom. However, energy production fell -1.5% mom, while non-durable consumer goods output plunged -4.5% mom.

Among member states, Denmark recorded the strongest monthly gain with industrial output surging 8.4%, followed by Bulgaria at 5.8% and Poland at 5.4%. By contrast, Belgium, Estonia, and Sweden all recorded notable declines.

Full Eurozone industrial production release here.

Eurozone economic growth slowed further in the first quarter of 2026 as higher energy costs, weak industrial activity, and lingering geopolitical uncertainty continued weighing on momentum.

According to Eurostat’s flash estimate, seasonally adjusted GDP rose just 0.1% qoq in the Eurozone, down from 0.2% growth in Q4 of 2025. Across the broader European Union, GDP increased 0.2% qoq, unchanged from the previous quarter. The annual growth picture also weakened noticeably. Eurozone GDP growth slowed from 1.3% yoy to 0.8% yoy in Q1. EU-wide annual growth decelerated from 1.4% yoy to 1.0% yoy.

Labor market conditions remained positive but also showed signs of cooling. Employment growth eased from 0.2% qoq to 0.1% qoq in both the Eurozone and the EU during the first quarter. On an annual basis, eurozone employment growth slowed from 0.7% yoy to 0.5% yoy, while EU employment growth held at 0.6% yoy.

Full Eurozone GDP flash release here.

USD/JPY rose to 157.65 on Wednesday, marking a third consecutive day of gains. The yen came under pressure following stronger-than-expected US inflation data, reinforcing expectations that the Federal Reserve will maintain its hawkish stance.

Market focus remains on the Bank of Japan. Following its April meeting, some policymakers signalled the possibility of a further rate hike. Rising global oil prices are adding to inflationary pressures in Japan. The OECD forecasts that the BoJ’s key rate could reach 2% by the end of 2027.

Currency markets are also watching for potential interventions. US Treasury Secretary Scott Bessent noted that Washington and Tokyo view excessive currency volatility as undesirable, which was seen as indirect support for Japan’s efforts to stabilise the yen.

Technical Analysis

On the H4 chart, USD/JPY is trading around 157.33, with a breakout suggesting further upside towards 157.97. A short-term correction to 156.50 is possible before a potential move higher resumes. The MACD indicator, above zero and pointing firmly upwards, supports further gains.

On the H1 chart, USD/JPY has reached 157.77 and is moving lower towards 157.30. A subsequent rise towards 157.97 is possible. The Stochastic oscillator confirms short-term bullish momentum, although a pullback may develop, indicating some near-term downside risk.

Conclusion

USD/JPY is advancing under both external and domestic influences, supported by technical indicators. While short-term corrections are possible, the broader trend remains upward.

Market Overview

The crypto market has been hovering around $2.7 trillion in market cap for the past 7 days. Interestingly, while recording relatively stable levels at the start of the day in Europe, the market deviates from this level by almost 2%, only to return to equilibrium very quickly, with yesterday’s leaders turning into underperformers. Over the past 24 hours, the top performers have been NEAR (+5%), TRUMP (+3.8%), and Neo (+3.5%), while the underperformers have been Toncoin (-8%), Theta (-5.2%), and BAT (-2.2%).

Bitcoin continues to settle quietly at levels above $80K, yet to decide on a breakout above the 200-day moving average. It seems that traders are paying excessive emotional attention to this technical aspect. By way of comparison, just over a year ago, Bitcoin crossed this curve quite freely in both directions.

Ethereum has lost all the gains made since the end of last month, once again testing the support level at $2,240, near which the 50-day moving average also lies. Furthermore, over the last four weeks, the second-largest cryptocurrency has been forming a sequence of lower local highs. This has not yet turned into a downtrend, as there is no sequence of lower local lows. The situation resembles a coiled spring.

News Background

The decline in volatility of the leading cryptocurrency and the inflow of institutional capital have altered market cycles, making the current cycle unique, according to CryptoQuant. Price movements now differ from historical data.

Mining company MARA reported a net loss of $1.3 billion and the sale of more than 20,000 bitcoins for the first quarter. The main reason for the negative result was a drawdown in treasury reserves, driven by BTC falling by more than 20% over the quarter. Another major miner, CleanSpark, reported a first-quarter loss of $378 million.

Democratic Party representatives in the US Congress are calling for a ban on officials profiting from crypto assets. Without a compromise on ethical issues, the CLARITY Act will not get a green light. Lawmakers plan to finalise work on it by August.

Despite its popularity, Bitcoin can hardly be called a safe-haven asset, said Ray Dalio, founder of investment firm Bridgewater Associates. In his view, only gold is worthy of that title. The billionaire cited the lack of privacy as one of the main reasons: all transactions are visible on the public blockchain.

Elliptic has raised $120 million to develop tools for tracking cryptocurrencies. The company will use the funds to create and launch AI agents that perform the tasks of compliance officers.

EUR/USD declined from 1.1800 and traded below 1.1750. USD/JPY is rising and might gain pace above 158.00 and 158.80.

Important Takeaways for EUR/USD and USD/JPY Analysis Today

• The Euro started a fresh decline after a decent move to 1.1800.
• There was a break below a key bullish trend line with support at 1.1765 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 156.40 and 157.10 levels.
• There is a major bullish trend line forming with support at 157.40 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair climbed above the 1.1780 resistance zone before the bears appeared, as discussed in the previous analysis. The Euro started a fresh decline and traded below 1.1765 against the US Dollar.

There was a break below a key bullish trend line with support at 1.1765. The pair declined below 1.1750 and tested 1.1720. A low was formed near 1.1721 and the pair started a consolidation phase.

There was a minor recovery wave above 1.1740 and the 23.6% Fib retracement level of the downward move from the 1.1787 swing high to the 1.1721 low. EUR/USD is still trading below 1.1750 and the 50-hour simple moving average.

On the upside, the pair is now facing hurdles near 1.1745. The next key resistance is 1.1755 and the 50% Fib retracement. The main barrier for the bulls could be 1.1785. A clear move above 1.1785 could send the pair toward 1.1840. An upside break above 1.1840 could set the pace for another increase. In the stated case, the pair might rise toward 1.1920.

If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.1720. The next important region for buyers sits at 1.1700. If there is a downside break below 1.1700, the pair could drop toward 1.1675. Any more losses might send the pair toward 1.1640.

USD/JPY Technical Analysis

On the hourly chart of USD/JPY at FXOpen, the pair started a fresh upward move from 155.00. The US Dollar gained bullish momentum above 156.50 against the Japanese Yen.

It even cleared the 50-hour simple moving average and 157.00. The pair climbed above 157.50 and traded as high as 157.78. The pair is now consolidating gains above the 23.6% Fib retracement level of the upward move from the 155.03 swing low to the 157.78 high.

The current price action above 157.40 is positive. Immediate resistance on the USD/JPY chart sits at 157.80. The first key hurdle is near 158.00. If there is a close above 158.00 and the RSI moves above 65, the pair could rise toward 158.80.

The next major stop for the bulls could be 159.50, above which the pair could test 160.00 in the coming days. On the downside, the first major support is 157.40, a bullish trend line, and the 50-hour simple moving average.

The next area of interest for buyers could be 157.10. If there is a close below 157.10, the pair could decline steadily. In the stated case, the pair might drop toward the 50% Fib retracement at 156.40. Any more losses might open the doors for a drop to 155.00.

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Key Takeaways

• Nasdaq 100 extended its medium-term bullish trend to a fresh record high of 29,390, supported largely by explosive gains in semiconductor and AI-related stocks such as Intel, Advanced Micro Devices, and SanDisk.
• The strong correlation between the Nasdaq 100 and the iShares Semiconductor ETF suggests that emerging exhaustion signals in semiconductor stocks could trigger a near-term corrective pullback in the broader tech-heavy index.
• Bearish technical indicators, including bearish RSI divergence, overstretched price action above the 20-day moving average, and Bollinger Band exhaustion conditions, point to rising risks of a short-term mean reversion decline below the 29,505/615 resistance zone.

The price actions of the US Nasdaq CFD index, a proxy of the Nasdaq 100 E-mini futures, have surged as expected. It rallied by 3.2% from Friday, 8 May 2026 intraday low of 28,480 to hit a fresh all-time intraday high of 29,390 on Monday, 11 May 2026 in the US session.

Its current medium-term uptrend phase has been in place since the 30 March 2026 low, and a significant contribution of the gains has come from US semiconductor and AI-hardware-related stocks, such as SanDisk, up 151%, Intel, up 150%, and Advanced Micro Devices, up 105%, in the past three months.

US Semiconductors Are Showing Signs of Medium-Term Bullish Exhaustion

Fig. 1: Correlation of iShares PHLX SOX Semiconductor ETF, SOXX, with Nasdaq 100 as of 12 May 2026. Source: TradingView.

Fig. 2: iShares PHLX SOX Semiconductor ETF, SOXX, medium-term trend as of 12 May 2026. Source: TradingView.

The price movement of the Nasdaq 100 and the iShares Philadelphia, PHLX, Semiconductor Sector exchange-traded fund, SOXX, has moved in almost perfect direct lockstep.

The 20-day rolling coefficient between the Nasdaq 100 and SOXX stands at 0.95, which indicates that future movements of US semiconductor stocks, using SOXX as a bellwether, are likely to have a significant influence and impact on the Nasdaq 100.

The prior 6-week consecutive rally of the SOXX has reached an overstretched volatility condition, as seen in the daily Bollinger Bands indicator.

The daily price action of SOXX had a daily close above the upper Bollinger Band, two standard deviations away from the 20-day moving average, on Monday, 11 May 2026, coupled with a bearish divergence condition seen on the daily RSI momentum indicator at its overbought zone.

These observations suggest the bullish impulsive up move of SOXX since the 30 March 2026 low has reached a potential bullish exhaustion condition, where the next movement may be a multi-day corrective decline sequence, in turn triggering a negative feedback loop into the Nasdaq 100.

Let’s now uncover the short-term, 1- to 3-day, trajectory of the Nasdaq 100 from a technical analysis perspective.

Nasdaq 100: At Risk of Minor Mean Reversion Decline Below 29,505/615

Fig. 3: US Nasdaq 100 CFD index minor trend as of 13 May 2026. Source: TradingView.

Trend bias: Minor corrective decline below 29,505/615 key short-term pivotal resistance within medium-term uptrend.

Supports: 28,660, 28,460/280, and 27,850, close to the 20-day moving average.

Next resistances: 29,893/953 and 30,410/417, Fibonacci extension clusters.

Key Elements Supporting the Near-Term Bearish Bias on the Nasdaq 100

• The current all-time intraday high of 29,390 printed on Monday, 11 May 2026, has moved significantly away from its 20-day moving average by almost 6%.
• The hourly RSI momentum indicator flashed a bearish divergence condition on Monday, 11 May 2026.
• The hourly RSI momentum indicator staged a bearish breakdown below its key ascending support on Tuesday, 12 May 2026.

Markets

UK gilts took a heavy blow on a toxic combination of political and fiscal uncertainty while a renewed oil price rise added further fuel to already lingering inflation risks. Prime minister Starmer for now resists growing pressure to leave office in the wake of last week’s historical election defeat. Some 90 Labour lawmakers by now have called on Starmer to resign. Unless at least 81 of them rally behind a single potential successor – automatically triggering a leadership contest – it is up to Starmer to decide. It’s mere perceived control over his own fate, though. Either he stays on as a lame duck bowing to backbencher demands or he eventually resigns. Acknowledging the risks, gilts sold off, pushing yields between 7.4 and 10.3 bps higher across the curve. The 10-yr (5.1%) and 30-yr (5.77%) closed at the highest level since 2008 and 1998 respectively. GBP lost ground but finished off the intraday lows. EUR/GBP traded just shy of 0.87 before paring gains to 0.867. European swap rates added 3.8-6.9 bps, slightly outperforming vs Bunds. Japanese yields continue their ascent, which remained largely below the radar lately even though several tenors are near, at or even above multidecade highs. US yields rose 3.8-5.3 bps with the 2-yr yield retesting the 4% barrier. April CPI numbers topped expectations and added to the intraday rise. The 3.8% headline print (from 3.3%) was not only supported by energy. Price rises were much broader. Services inflation in particular was striking, or as Fed Goolsbee called it: worrying. Even excluding a sharp shelter increase (0.6% m/m), the so-called supercore services gauge quickened to 3.4%, the highest since February 2025. We upgrade our in-house forecast for May to 4.2% for the headline and 2.9% for core. The US dollar strengthened to EUR/USD 1.1739. DXY bounced to north of 98. USD/JPY saw some intraday volatility during USTS Bessent’s visit to Japan. Some attributed it to authorities doing a rate check, the final stage before potential interventions. USD/JPY (157.63) quickly recovered from a drop to as low as 156.78.

There’s little inspiring on the economic agenda today. April US PPI’s are worth mentioning as a gauge for pipeline price pressures that may eventually show up in CPI. ECB’s Lagarde and chief economist Lane are scheduled to speak today, be it after European closing hours. We’ll be watching Lane for giving an update of a closely watched slide in a speech he gave April 14 and in which he plotted the oil forward curve in comparison with the ECB’s base and adverse scenario. Spoiler alert: it’ll have moved further towards the adverse one. Markets (ex. UK) in general may keep a cautious bias, sticking the sidelines going into the high-stakes meeting between the US and Chinese president from Thursday through Friday.

News & Views

Energy lobby groups Eurogas and the International Association of Oil & Gas Producers asked to maximize flexibility when it comes to refilling depleted natural gas inventories. Storage levels dropped below 30% for the first time since 2022 at the end of March/early April compared with an EU goal of reaching 90% ahead of the heating season (with 10 percentage point deviation). In their joint statement, Eurogas and IOGP call for flexibilities to be activated by the EC and member states as soon as possible, early in the storage season. “Initiatives such as demand aggregation or diversification approaches should remain voluntary in nature and must not distort wholesale price signals. Clear and credible price signals are indispensable to attract natural gas, and crude oil supplies in global markets, particularly in a tightening market characterized by intense competition for LNG cargoes, including by Asian buyers.” The timing of the statement coincides with an informal meeting of EU energy ministers later today.

The monthly Business Survey of the Banque de France showed economic activity growing more slowly in industry and construction and stagnating in market services. Industrial production remained relatively strong and even exceeded expectations. The outlook for May points to stagnation or declines in all sectors. Firms are still concerned about rising raw material prices and logistical disruptions. Due to strong competition, companies only partially pass these increases onto customers. Selling prices should continue to rise in industry and construction. In services, they are mainly seen in transport and logistics driven by higher diesel costs.

Daily Pivots: (S1) 212.67; (P) 213.43; (R1) 214.13; More...

Intraday bias in GBP/JPY remains neutral for the moment. On the downside, break of 212.35 minor support will bring deeper fall back to 210.43 support. On the upside, firm break of 214.40 will bring stronger rebound to retest 216.58 high.

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 205.75) will argue that it's already in medium term down trend for 184.35 support.