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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.

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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.

Key takeaways

• Gold rebounded on easing geopolitical tensions: Gold (XAU/USD) surged 3% as optimism over a potential US–Iran peace deal reduced stagflation fears and increased expectations that the Fed could eventually pivot toward rate cuts, weakening the US dollar.
• Technical and intermarket signals remain cautious: Despite the rally, gold remains one of the weaker-performing major assets since late February, while firm US 10-year real yields above 1.85% continue to limit upside momentum by raising the opportunity cost of holding non-yielding assets.
• Near-term bearish bias still intact: Gold’s rebound stalled near the downward-sloping 20-day and 50-day moving averages and close to the 61.8% Fibonacci retracement level, while RSI momentum indicators flashed bearish divergence, keeping resistance at 4,775 in focus.

Gold (XAU/USD) has staged a significant intraday rally of 3% on Wednesday, 6 May 2026, on the backdrop of easing US-Iran geopolitical tensions, as positive news flows suggest a potential imminent peace deal resolution to end the two-month-long conflict.

An end to the US–Iran war would likely reduce stagflation risks as lower oil prices ease inflationary pressures, potentially giving the US Federal Reserve greater scope to consider resuming interest rate cuts.

A shift in Fed guidance from a “wait-and-see” stance toward a more dovish tone could weaken the US dollar, which in turn may provide further support for gold prices.

So far, considering the pre-war baseline of 27 February 2026 to Wednesday, 6 May 2026, spot Gold (LMBA) is still one of the underperformers among major cross assets with a loss of 9.9% (see Fig. 1).

Fig. 1: Gold (XAU/USD) with major cross assets performances from 27 Feb 2026 to 6 May 2026 (Source: MacroMicro).

Secondly, technical factors and intermarket analysis advocate that the trend of Gold (XAU/USD) has not transitioned into a medium-term uptrend phase despite yesterday’s 3% rally.

Let’s unpack these key technical and intermarket charts now.

The 10-year US Treasury real yield remains supported at 1.85%

Fig. 2: Correlation of 10-year US Treasury real yield with Gold (XAU/USD) as of 7 May 2026 (Source: TradingView).

Gold (XAU/USD) has a significant indirect correlation with the longer-term US Treasury yields, as the precious yellow metal is a non-interest income-bearing asset.

Hence, if the 10-year US Treasury real yield remains supported and stages an up move, gold in turn is likely to face downside pressure as opportunity costs rise for owning precious metals.

Since the start of this week, 4 May 2026, the 10-year US Treasury real yield has traded sideways above its key moving averages (20-day, 50-day, and 200-day) while holding above a key intermediate support of 1.85%.

Thus, a minor push-up on the 10-year US Treasury real yield to retest its near-term range resistance at 1.98% may translate to a minor slide in Gold (XAU/USD) (see Fig. 2).

Let’s focus now on the short-term trajectory (1 to 3 days) of Gold (XAU/USD)

Gold (XAU/USD) – Bullish Momentum Has Eased Off After a Retest on 20-Day MA

Fig. 3: Gold (XAU/USD) minor trend as of 7 May 2026 (Source: TradingView).

Trend bias: Bearish bias within a range configuration in place from 17 April 2026 to 19 April 2026. 4,775 key short-term pivotal resistance cannot be surpassed to maintain bearish bias (see Fig. 3).

Supports: 4,645, 4580, and 4,524/4,486 (range support)

Next resistance: 4,860/4,900 (range resistance – 15 April/17 April 2026 highs)

Key Elements to Support the Near-Term Bearish Bias on Gold (XAU/USD)

• The recent rebound from the 5 May 2026 low has reached the area of the downward-sloping 20-day and 50-day moving averages.
• The rebound has also almost retraced 61.8% Fibonacci retracement of the prior drop from the 17 April 2026 high to the 5 May 2026 low at 4,740.
• The hourly RSI momentum indicator has exited the overbought region (above the 70 level) with a prior bearish divergence condition.

Markets

Stock markets surged yesterday in response to the Axios scoop that suggested the US and Iran were nearing a deal, regardless of the ensuing contradictory statements from both warring parties. The EuroStoxx50 added 2.7% in what was its best day since the ceasefire one month ago. US equities marched up to 2% higher amid tech outperforming the rest. Asian markets are gaining too, building on yesterday’s gains. South Korea’s Kospi index thanks to the likes of Samsung and SK Hynix overtook Canada as the world’s seventh largest equity market. Japanese markets return from holidays with a huge 6% rally in the Nikkei. Oil prices fell from +/- $110 to as low as $97 before recovering back to above the $100 barrier in the close. Core bonds soared with the front end outperforming in Europe. Short term yields dropped around 10 bps as money markets reduced ECB rate hike pricing from 3-4 this year to 2-3 currently. US rates dropped 5.1-8.2 bps with the belly of the curve taking the lead. The dollar traded on the backfoot against such a constructive risk backdrop. EUR/USD sniffed at the 1.18 level compared to a sub 1.17 open and in the end closed around 1.175. DXY strongly tested support at 98, which holds for now. USD/JPY slumped to an intraday low of 155, the weakest since end-February with Japanese FX interventions having kickstarted the move lower.

A market so keen to chase positive geopolitical headlines creates asymmetric risks and oil prices keeping north of $100 suggests markets remain cautious. There’s a sense of president Trump wanting a (framework for a) deal amid spiraling domestic gasoline prices and before his meeting with Chinese counterpart next week. But he’s also threatening to restart the bombing campaign should Iran not accept the US 14-point MoU. Israel striking the not-so-southern Beirut capital of Lebanon, potentially angering Iran, only complicates matters. Yet, barring a negative response by Iran markets may continue along the lines of yesterday in a more guarded manner. As the geopolitical story develops, we are zooming in on the UK today where local elections are casting a shadow over an already bruised prime minister Starmer. Opinion polls point to heavy losses for the ruling Labour Party, potentially triggering a leadership challenge. UK markets will be on edge for what this means in terms of (a looser?) fiscal policy. The UK since Truss-Kwarteng is living proof of the return of bond vigilantes and risk premia in general. Gilts could suffer and the pound, being near important technical resistance levels around EUR/GBP 0.86, in such a case is vulnerable.

News & Views

The New Zealand economy is in the early stages of a cyclical recovery, an OECD economic survey report showed. It is supported by solid exports and monetary easing even as the outlook has come more uncertain. Growth is expected to recover gradually to 1.4% in 2026 and 2.3% in 2027. However, the recovery remains fragile as higher uncertainty and energy prices weigh on real incomes, confidence and domestic demand. Reforms are starting to address the roots of New Zealand’s chronic productivity problem, but global policy turbulence, costly and insecure electricity, ageing-driven fiscal pressures, investment gaps, shallow capital markets and limited risk capital require sustaining the reform momentum. The OECD advocates the importance of anchoring inflation expectations and maintaining the Reserve Bank’s strong operational independence, credibility and accountability. The return to a single inflation mandate strengthens clarity, but OECD says that changes and reviews of the monetary policy framework since 2019 risk undermining its credibility. It advocates maintaining stability of the mandate and remit outside scheduled five-year review cycles.

The National Bank of Poland (NBP) yesterday left its main policy rate unchanged at 3.75%. While retail sales, production and construction in March still grew in annual terms, the NBP expects Q1 growth to have slowed, as did wage growth in the private sector. Employment in the private sector is diminishing. Inflation reaccelerated compared to the beginning of the year due to higher fuel prices stemming from the conflict in the Middle East. CPI inflation in April rose to 3.2% (from 3.0% in March) and the NBP also expects core inflation to have increased in April. Against this background, and amidst uncertainty regarding future developments in geopolitical situation and their impact on the economy, the Council decided to keep the NBP interest rates unchanged. The NBP cut its policy rate by 25 bps at the March meeting. Governor Glapinski will comment the policy decision at a press conference later today. Money markets are inclined to price a rate hike in H2. The zloty yesterday strengthen from EUR/PLN 4.246 to EZUR/PLN 4.232 but that was mainly due to the global risk-rebound.

Optimism over no further escalation turned into euphoria yesterday on news that a peace proposal is on the table that could end the war in Iran. The headlines have not flipped yet this morning — at the time of writing, the major headline is still that the US and Iran ‘weigh potential deal’.

US crude briefly traded below $90pb yesterday on the news, and Brent below $97. Considering that the price was flirting with the $115pb level just two days ago, seeing levels below the psychologically important $100pb mark probably got investors ahead of themselves. Yields dropped, pricing in the end of inflationary risks, the US dollar fell across the board — the dollar index is now back to levels seen before the Iran war started — and equity markets rallied.

Major tech-heavy indices hit fresh record highs, also bolstered by strong earnings from chip companies, cementing the AI growth story. Samsung joined the trillionaires’ club after announcing a nearly 50-fold profit rise for its chip unit alone — that basically makes up 94% of its total earnings. AMD rose more than 18%, rewarded for its own record earnings and strong guidance. The latter didn’t prevent rival Nvidia from adding nearly 6% itself! The Nasdaq 100 gained more than 2%. Gold rallied nearly 3%, taking advantage of a sharp drop in the US dollar and global yields, which compress the opportunity cost of holding the non-interest-bearing metal.

Now, all this is great, but there is no certainty it will last. We had peace proposals and market rallies over the course of the past weeks, and all of them ended in disappointment. Given the chaotic diplomacy, and given how the US lost control of the situation — and given the earlier unfounded announcements of progress — I would like to say: ‘I will clap when Iran confirms.’ Because the longer this drags on, the greater the risk of oil shortages and sharper spikes in oil prices. And a 180-degree turn in the situation is just one headline away. Just one headline.

The thing is, you can’t enter a winning trade on the news, you must enter a great trade in expectation of the news. And this is what’s leading to this maybe-premature rush and massive volatility.

This morning, oil prices are higher than yesterday’s dip levels; the risks remain two-sided.

Topix and Hang Seng are up as they catch up with the past days’ holiday lag, while Kospi posts small gains following a 48% rally since the beginning of April. Remember, most of it is thanks to rising memory chip demand, which created shortages and pushed memory chip prices notably higher — we’re sometimes talking about triple-digit price increases. Memory chip makers are used to boom-and-bust cycles. During boom cycles, they increase capacity, produce more and end up with too many chips, which then pull prices lower and weigh on margins. Today, many are betting that AI demand will break that cycle and keep the memory chip sector in an eternal boom cycle. Is it possible? On one hand, computing needs double every 6–7 months — and this could accelerate as adoption accelerates and models grow — meaning that we will always need more chips. On the other hand, such demand – and margins! - would attract other players and eat into margins. In fact, today, the parabolic rise in Samsung’s PE ratio warns that the stock price is rising faster than earnings, despite the 50-fold rise in chip profits. Rationally, there should be a correction. But sometimes it takes time before investors come back to their senses.

What’s interesting is that the AI trade has changed hands. It’s no longer Nvidia alone, but a cocktail of AI model providers — like OpenAI and Anthropic — a bunch of different chip makers — GPUs, TPUs, CPUs, memory chips to keep the system together — and construction equipment makers like Caterpillar. On the flip side of this trade are software companies shaken by headlines, like the one that dropped this week about Anthropic’s new agents for performing financial services tasks. LSEG was down another 2.5% in London yesterday, which I think is an opportunity to buy the dip when you consider that AI may replace their platforms, but the data is still theirs to sell.

Anyway, with all these changes, the earnings season is surely going well. Besides the fact that more than 80% of companies that have already reported earnings beat expectations, Deutsche Bank analysts called it ‘one of the best earnings seasons in 20 years’. The Middle East war impact was nowhere to be found, and the trade war hit — not much either.

But the ADP report yesterday printed a lower-than-expected figure, suggesting that the US economy added 109K new private jobs last month versus 118K expected, while inflation metrics around the globe are heating up. Yet optimism is such that investors prefer to see the glass half full. Yesterday, they cheered the fact that job additions were notably up from the 61K added a month earlier. And you know, a softer-than-expected figure also justified lower US yields. Or simply, no one cares about jobs data anymore. War headlines and chip earnings are far more exciting than the good old jobs figures.

Whatever it is, the market mood is probably too optimistic to last. The higher we go, the faster we’ll fall if anything goes wrong. So the best thing to do is remain diversified, and conscious that we will more likely than not face high volatility in the coming days.

In focus today

In Norway, we expect Norges Bank to raise the policy rate by 25bp to 4.25%. The March meeting indicated a rate hike was likely at one of the forthcoming monetary policy meetings, with the rate path suggesting a higher probability for June. However, the hawkish stance, aimed at re-anchoring inflation expectations, supports an earlier move. Given this, we see little reason for Norges Bank to delay the increase, particularly as two of the five committee members had already voted for a rate hike at the March meeting. Additionally, Statistics Norway will release Q1 wage figures, where monthly data point to annual growth slowing to 3.5%, noticeably below this year's wage estimates. This suggests that wage drift from late last year into this year may have been weaker than anticipated.

In Sweden, we expect the Riksbank to leave the policy rate unchanged at 1.75%. However, they may adopt a more hawkish tone compared to their March meeting, acknowledging the increased upside risks to the inflation outlook.

From the US, Q1 flash productivity data and the April Challenger Report on layoff announcements are set to be released later this afternoon.

In the UK, attention will be on local elections, where the Labour Party may face a significant setback, potentially increasing pressure on PM Starmer to resign. Gilt markets are sensitive to this outcome, as it could signal a shift towards a more lenient fiscal policy. The Conservatives are also anticipated to face substantial losses, raising questions about whether this election could signal a transition to a multi-party system.

Economic and market news

What happened overnight

The US-Iran conflict has seen significant developments, with diplomatic efforts to end hostilities gaining momentum. Iran is reportedly reviewing a US proposal to end the war, while President Trump has conveyed optimism about the discussions, describing them as "very good" and hinting at the possibility of an imminent agreement. However, key issues remain unresolved, including Iran's nuclear programme and the reopening of the Strait of Hormuz. The prospect of a peace agreement has already impacted global markets, with oil prices dipping and shares rallying amidst hopes of resolution.

In the oil market, Brent crude briefly fell below USD100/bbl yesterday and trades around USD102/bbl this morning - a sharp drop from USD114/bbl earlier this week. Prices have dropped amid speculation of a US-Iran deal to reopen the Strait of Hormuz for oil shipments. While past negotiations have led to disappointment, a failure could trigger a price rebound. If an agreement is reached, Brent could decline further, potentially settling at USD90-95/bbl.
What happened yesterday

In the US, the ADP National Employment Report's April reading of +109k private sector jobs aligns closely with consensus expectations (+99k), showing stable employment growth. While a strong figure, the increase was anticipated due to weekly "pulse" estimates during the reference period. This suggests a steady labour market, with limited surprises for economic forecasting.

In the euro area, the ECB's wage tracker indicates that negotiated wage growth is slowing, forecasted to drop from 3.0% in 2025 to 2.6% in 2026, likely easing services inflation and core inflation pressure. Second-round inflation effects from wages are likely to emerge only in 2027 if the ECB decides to hike rates this summer, based on anticipated wage-driven inflation rather than current services inflation trends. This approach highlights the central bank's forward-looking strategy in addressing inflation risks. Final PMIs for April revealed a modest improvement over preliminary figures, with services rising to 47.6 from the initial estimate of 47.4, which lifted the composite PMI to 48.8.

In Sweden, April's flash inflation data revealed a sharper-than-expected decline, with core inflation at 0% and CPIF at 0.8% y/y, below forecasts. The downside surprise stemmed from lower services inflation and energy prices alongside a noticeable pass-through of VAT reductions to food prices (-5.5% m/m) fell short of forecasts, indicating potential deflationary pressures. This data may influence the Riksbank's monetary policy stance, as inflation trends diverge from expectations.

In Norway, Norwegian house prices increased by 0.6% month-over-month in April, surpassing Norges Bank's forecast of 0.2%. While partially influenced by Easter effects, the annual growth rate of 3.8% remains below wage growth, highlighting the restrictive impact of monetary policy. Additionally, the vacancy rate rose to 3.0% in Q1, the highest since Q1 2025, underscoring strong labour demand and a tightening labour market. Despite these developments, the cost of re-anchoring inflation expectations appears manageable, supporting Norges Bank's cautious approach.

In Poland, the National Bank of Poland kept its policy rate decision unchanged at 3.75%.

Equities: Equities rallied yesterday on renewed optimism for a reopened strait, particularly in energy-deficient countries. While a deal and an open strait have long been reflected in equity pricing, the anticipated timing for the opening has been moved forward. The Stoxx 600 surged 2.2%, Japan is rallying 6% this morning, and the S&P 500 climbed 1.5%. Europe still sits 2% below its pre-war high. If Iran approves the deal, there could be even more room for equities to run. All cyclical sectors outperformed, including technology, industrials, materials, and consumer discretionary. Among defensives, real estate led the way as rates corrected. Notably, technology was the top performer among cyclicals, with semis jumping 5% (AMD up 19% on strong earnings, and Intel, Nvidia, Oracle each rising around 5%). One might have expected greater momentum in more energy-intensive sectors on a day dominated by peace hopes. However, this underscores that markets are forward-looking and already factoring in other fundamental drivers.

FI and FX: EUR/USD spiked initially higher yesterday following the optimism around US-Iran talks and lower energy prices, but reversed part of the gains later in the session. The report implied a (gradual) reopening of the Strait of Hormuz and an end to the US blockade of Iranian ports, with nuclear talks coming later in the outlined process. Brent oil initially declined below the 100 USD/barrel mark and yields fell markedly with the 2Y EUR swap down 15bp at its lowest point. Later news sources citing Iranian officials called parts of Axios' report speculation, and we remain skeptical that a comprehensive deal is yet within reach. Focus today will be on the Riksbank and Norges Bank meetings. We expect the Riksbank to stay on hold at 1.75% but communicate a slightly more hawkish message compared to the March MPR, despite yesterday's low inflation print. At the interim Norges Bank (NB) meeting we expect a 25bp hike in policy rates while markets price 12bp worth of hikes i.e. close to an unusual coin-flip pricing. We also expect NB to verbally guide markets towards a second hike in June.