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The week started on a cautious note as no major progress was made on Middle East peace negotiations. Tensions remain elevated, keeping oil prices under upward pressure. Germany’s Chancellor Friedrich Merz, angered by the prolonged tensions, said that “the US is being humiliated by Iranian leaders.” Crude near $100 per barrel is unnerving even allies, while trade tensions with the US are pushing countries to forge partnerships outside the US.

Meanwhile, this—arguably unnecessary—geopolitical and trade mess is pushing global prices higher and derailing most major central banks from their initial plans to end monetary tightening. Instead, they may be forced to consider tightening again to tackle rising inflation, even as growth prospects worsen.

In Japan, policymakers halved their FY2026 growth forecast from 1% to 0.5%, while revising inflation expectations higher. They kept rates unchanged instead of hiking. The USDJPY is lower this morning, testing the 159 level. Shorting the yen at these levels is not particularly attractive given the limited upside toward 160, but going long yen could become interesting if the US dollar eases—potentially on the back of renewed peace hopes.

Across the Pacific, the Federal Reserve (Fed) starts its two-day policy meeting today and is also expected to keep rates unchanged. In fact, the Fed is no longer expected to cut rates until December, even though Kevin Warsh supports the idea of cuts — a move that would greatly please the White House.

Inflation expectations have risen uncomfortably over the past two months, driven by a notable jump in energy prices. At this stage, no one — including central bankers — can predict what comes next if Middle East tensions continue to disrupt energy flows. What we do know is that the longer the Strait of Hormuz remains under strain, the stronger the impact on markets will be. Oil prices are currently trading roughly 50% above pre-conflict levels, and that is changing the way investors perceive risk.

Two months ago, appetite for Big Tech was weakening in favour of non-tech and non-US markets. That shift was largely driven by massive AI spending plans from Big Tech, combined with uncertainty around the timing of returns on those investments. Investors also grew concerned that additional spending was eroding free cash flow and forcing companies to take on leverage to finance AI buildouts. Oracle’s CDS levels were thrown to every sauce as a reflection of those concerns: too much investment, too much leverage, uncertain returns.

But things have changed since then.

Today, the investment pledges from Big Tech have not changed, but the way investors perceive the risks has. Big Tech has proven resilient during the Middle East crisis and has increasingly been treated as a “safe harbour”. At the same time, Anthropic has helped support weakening sentiment around OpenAI and broader concerns about circular AI deals. These circular structures are now increasingly forming around Anthropic, with major tech companies investing in the firm, which in return commits to purchasing chips and computing power from them.

However, stepping back, even though the Anthropic news gave a sugar rush to AI investors in Q1, the underlying story has not changed. AI is extremely promising, but also highly capital intensive. Big Tech must continue investing to meet demand, but much of that demand is still circulating within the AI ecosystem rather than being driven by external end users. OpenAI and Anthropic sit at the centre of these flows and are under pressure to DELIVER.

Even though Anthropic’s revenue potential has been boosted by its latest model — which is considered too powerful to be widely released and could support higher-value contracts, including government deals — the gap between revenue generation and costs remains large.

How large? Even with recent estimates, Anthropic’s annualised revenue run-rate is believed to be around $20–30bn, while OpenAI is broadly estimated at $25bn+, depending on sources (both are private companies with no official figures). However, both are backed by far larger capital commitments: OpenAI through hundreds of billions of dollars in compute-related partnerships and expected funding capacity, and Anthropic through tens of billions in recent strategic investments from major cloud providers such as Amazon and Google.

Against that backdrop, profitability is still a long way off. Reports suggest both companies are still losing money once the full cost of running large-scale models is included, particularly GPU and cloud computing expenses. As a result, margins remain under pressure, as the cost of scaling AI is rising almost as quickly as demand.

In that sense, the AI structure is building like a house of cards on expectations of success from Anthropic and OpenAI. If anything were to go wrong with these two, AI would not disappear, but markets would face a significant repricing.

The upcoming Big Tech earnings will therefore be closely watched. Last quarter, most Big Tech companies beat earnings and revenue expectations, but that did not prevent investors from rotating out of the sector. In particular, markets reacted negatively to further increases in capital expenditure at a time when revenue growth was not accelerating in line.

Let’s see whether Anthropic can provide relief. Chipmakers and AI enablers continue to post strong results — unsurprisingly, as spending flows through the AI value chain — but it remains unclear whether this is translating into meaningful end-user revenue growth outside the ecosystem. Investors will therefore remain laser-focused on cloud division growth. Any disappointment could bring back a key concern: are these investments becoming obsolete before they start generating returns?

To me, the risks remain tilted to the upside given the speed of AI adoption and the potential in agentic AI and robotics. But valuations are once again elevated.

The Nasdaq 100’s P/E ratio eased following the latest earnings season, but investors were quick to take advantage of the cheaper valuations. As a result, Big Tech is once again priced to perfection into earnings, leaving little margin for disappointment. Strong results could continue to mask underlying economic weakness (trade, political & geopolitical mess) for a while, but any disappointment could derail tech appetite at a time when non-tech names are unable to pick up the slack.

In focus today

• In the euro area, the ECB's consumer expectations survey is released where focus will be on the 1-year and 3-year CPI expectations. The ECB's quarterly bank lending survey is also released which will give insights into financing conditions and the outlook.
• In the US, Conference Board will release its April consumer confidence survey. Earlier, University of Michigan's April survey pointed towards weakening sentiment and higher inflation expectations. ADP will also release its weekly private sector employment growth estimate.
• In Hungary, the central bank of Hungary (MNB) is expected to keep its policy rate unchanged at 6.25% when it announces its decision this afternoon.
• Overnight, Australia's Q1 inflation data is expected to show underlying trimmed-mean inflation steady at +0.9% Q/Q.

Economic and market news

What happened overnight

As widely expected, the Bank of Japan is on hold this morning keeping the overnight call rate at 0.75%. The decision was taken with a 6-3 vote, a closer call than both at the March and January meetings when only Takata Hajime voted for a hike, supporting our expectation for a June hike. The new outlook report suggests that the energy crunch affects inflation more than activity with a 0.5pp revision to GDP growth in the fiscal year (FY) 2026 and only 0.1pp in FY2027 while inflation excluding fresh food and energy has been revised 0.4pp/0.5pp higher respectively. The board members' forecasts also indicate that they are more worried about faster inflation than the risk on activity. The market has reacted with a stronger JPY and JGB yields edging higher. Next up is the press conference where investors will look for further guidance towards a summer hike, currently priced in at about a 54% likelihood by markets.
What happened yesterday

In the Middle East, mediators are working to bridge gaps between the US and Iran despite the cancellation of face-to-face talks by President Trump over the weekend. Iran's latest proposal calls for phased negotiations, prioritising an end to the war and lifting the US blockade before addressing nuclear issues, a proposal that Trump has criticised. Iranian Foreign Minister Abbas Araqchi has visited Pakistan, Oman, and most recently Russia in pursuit of support. Oil prices rose slightly in Monday's trade to USD 109/bbl as markets seem anxious about the risk of renewed escalation of the conflict and/or failure to start talks on a deal to re-open the Strait of Hormuz.

In the euro area, the ECB released its quarterly Survey on the Access to Finance of Enterprises (SAFE) for Q1. Firms expect selling prices to rise by 3.5% (up from 2.9%) and input costs, including energy, to increase by 5.8% (up from 3.6%), while wage expectations moderated slightly to 2.8% (down from 3.1%). The survey partially reflects the impact of the war in Iran, with later responses indicating increased price pressures. The European Commission's business survey on seller price expectations, due on Wednesday, will provide further insights into inflation dynamics.

In tech, OpenAI has ended its exclusive partnership with Microsoft, paving the way for deals with Amazon and Google. While Microsoft will remain OpenAI's primary cloud partner and retain a licence to its intellectual property through 2032, the removal of exclusivity has raised concerns about its long-term competitive edge. Meanwhile, Chinese regulators have ordered Meta to unwind its USD 2 billion acquisition of AI startup Manus, citing national security risks and efforts to safeguard domestic AI talent and technology. The move underscores China's increasingly stringent approach to foreign investments in sensitive sectors like AI and adds to the geopolitical tensions ahead of the upcoming Trump-Xi summit.

Equities: Equities moved higher again yesterday, and again led by the US and tech, in what was a bit of waiting game before a storm of central bank meetings this week, earnings reports and macro data as we move further in. Cyclicals outperformed again, though not the deep cyclicals. As we have highlighted before, growth tech and the broader growth segment are carrying markets at the moment. At the other end of the spectrum, consumer staples were the worst-performing sector yesterday.

Consumer-related sectors are still struggling with the second-round effects from tariffs, and now also with the more immediate direct impact from higher oil prices, which effectively acts as a tax on the consumer. This also means that the equity rally remains highly selective. We expect that to continue for now, as the geopolitical, macro and earnings factors are all pointing in the same direction.

The rally is not only more sector-divergent; it is also becoming more regionally divided. Yesterday, the US outperformed, with cyclicals rising, while Europe underperformed and defensives did better.

This morning, Asia is mixed, once again driven by country and sector exposure, with tech higher. Japan is lagging after this morning's Bank of Japan meeting where the 6-3 vote split and a slightly more hawkish tone have pushed the yen stronger.

European futures are higher, while the picture is more mixed in the US.

FI and FX: The Bank of Japan kept its key rate unchanged at 0.75% as expected amid a 6-3 vote. The vote was a closer call than forecasted, resulting in JGB yields edging higher and a strengthening of the JPY close to 159. While the White House is weighing Iran's latest proposal, oil prices continue to climb with the June Brent future just shy of USD110/bbl. EUR/USD trades relatively steady near 1.17. Today's data calendar is light with no tier-1 releases scheduled, but we will still get the latest on consumer sentiment from both sides of the Atlantic in the form of ECB's and US Conference Board's surveys.

Daily Pivots: (S1) 159.12; (P) 159.39; (R1) 159.68; More...

USD/JPY weakens slightly today but overall outlook is unchanged. Consolidations from 160.45 is still extending and intraday bias remains neutral. 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 153.81) 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.

Yen strengthened broadly after the Bank of Japan’s hawkish hold, but gains are likely to be short-lived as markets question how far tightening can go. While the shift reinforces expectations for a near-term rate hike, Japan’s low terminal rate continues to cap upside and keep the broader downtrend intact.

The 6–3 vote split marked a clear turning point, signaling that support for tightening is building within the board. The most telling signal came from Junko Nakagawa. Her dissent in favor of an immediate hike to 1.00%—despite her reputation as a dovish member—is being viewed as a “canary in the coal mine.” Markets are interpreting this as evidence that the BoJ is closer to action than previously assumed.

The timing of that move is now the key question. July remains the preferred window, as it coincides with the Quarterly Outlook Report, giving Governor Kazuo Ueda the necessary cover to justify tightening with updated projections. June is not off the table. Strong Shunto wage settlements—exceeding 5%—provide a foundation for domestic inflation. However, the BoJ is likely to wait for clearer evidence that these gains are feeding through into consumption and services prices.

Even so, Yen strength has been notable but contained, reflecting skepticism about how far the BoJ can ultimately go. The hawkish shift may support the Yen in the near term, but its low terminal rate keeps the broader carry trade dynamic intact. Even at 1.00%, Japan’s rates remain deeply uncompetitive relative to global peers. This creates a structural ceiling for the currency. While policy surprises can trigger short-term rallies, the incentive to fund carry trades in Yen remains strong, leaving the longer-term bearish trend intact.

Elsewhere, Brent crude is knocking on the door of the 110 psychological level. Markets currently expect escalation between the US and Iran to be avoided, which is capping further upside. However, the risk has not disappeared. A sustained break above 110 could quickly shift the narrative, bringing 120 into focus and potentially triggering a broader risk-off move.

The underlying issue remains unresolved. US–Iran negotiations are stuck on a fundamental disagreement over uranium enrichment, with Washington reportedly seeking a 20-year suspension while Tehran has proposed five years. This wide gap underscores the depth of the stalemate. At the same time, the dual blockade in the Strait of Hormuz continues to sustain supply risks. The US is targeting Iranian ports, while Iran’s broader transit restrictions are affecting regional flows, creating a persistent but contained disruption.

In currency markets, Yen is the strongest performer of the day so far, followed by Dollar and Sterling. Swiss Franc, Kiwi, and Aussie are lagging, while Euro and Canadian Dollar are positioned in the middle.

In Asia, at the time of writing, Nikkei is down -1.13%. Hong Kong HSI is down -1.02%. China Shanghai SSE is down -0.23%. Singapore Strait Times is up 0.06%. Japan 10-year JGB yield is down 0.01 at 2.469. Overnight, DOW fell -0.13%. S&P 500 rose 0.12%. NASDAQ rose 0.20%. 10-year yield rose 0.03 to 4.34.

BoJ Hawkish Hold: 6–3 Split and Inflation Upgrade Point to Rate Hike Ahead

BoJ may be closer to a hike than it appears. The 6–3 split and higher inflation forecasts are pushing markets to price a move as early as June or July. Read More.

Gold and Silver Face Asymmetric Downside Risk as Dollar Weakness Fails Ahead of Fed, ECB

Gold and silver are showing limited upside despite a weaker Dollar. With central banks unlikely to turn dovish, the risks are increasingly asymmetric—leaving precious metals exposed to downside. Read More.

USD/JPY Daily Outlook

Daily Pivots: (S1) 159.12; (P) 159.39; (R1) 159.68; More...

USD/JPY weakens slightly today but overall outlook is unchanged. Consolidations from 160.45 is still extending and intraday bias remains neutral. 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 153.81) 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.

The Bank of Japan decided, as widely expected, to keep its short-term policy rate unchanged at 0.75%. While the "hold" was the majority decision, the meeting revealed a significant hawkish shift in the internal vote and a sharp revision to the bank's economic projections.

The 6-3 decision was notably split. Three board members—Hajime Takata, Naoki Tamura, and Junko Nakagawa—dissented, voting instead for an immediate hike to 1.0%. They argued that the price stability target has essentially been met and that upside risks to inflation are becoming significant.

The BoJ significantly raised its core CPI (excluding fresh food) forecast for fiscal 2026 to 2.8%, up from the 1.9% projected in January. This spike is primarily attributed to rising energy costs and global supply chain pressures linked to ongoing Middle East tensions.

In a classic "stagflationary" signal, the BoJ cut its real GDP growth forecast for fiscal 2026 to 0.5% (down from 1.0%). This reflects the drag that high energy prices and global geopolitical instability are expected to have on domestic demand.

Yen saw a mild recovery following the announcement. Markets are interpreting the 6–3 split as a clear signal that a move to 1.0% is likely on the table for the June or July meetings.

Full BoJ statement and Outlook for Economic Activity and Prices.

Key Highlights

• Ethereum climbed higher toward $2,450 before the bears appeared.
• A bullish trend line is forming with support at $2,100 on the daily chart of ETH/USD.
• Bitcoin price seems to be facing hurdles near $78,500 and $79,200.
• XRP failed to settle above $1.450 and $1.4650.

Ethereum Technical Analysis

Ethereum started a decent increase above the $2,350 resistance. ETH managed to climb above the $2,400 level before the bears appeared.

Looking at the daily chart, the price failed to settle above the 38.2% Fib retracement level of the downward move from the $3,399 swing high to the $1,739 low. It is now correcting some gains and testing the 100-day simple moving average (red).

On the downside, the bulls might be active near $2,250 and $2,220. The main support is now forming near $2,100. There is also a bullish trend line forming with support at $2,100, below which the price could slide toward $1,950. Any more losses might call for a move toward $1,880.

On the upside, the bears might remain active near $2,400. The first key resistance could be near the $2,450 level. The main hurdle for bulls sits near $2,500.

A close above the $2,500 level could open doors for a larger upward movement. In the stated case, ETH could rise toward the 61.8% Fib retracement level of the downward move from the $3,399 swing high to the $1,739 low at $2,765.

Looking at Bitcoin, there was another recovery wave, but the bears remained active below the $80,000 resistance zone.

Economic Releases

• US Housing Price Index for Feb 2026 (MoM) - Forecast +0.2%, versus +0.1% previous.

Gold and Silver are not responding to Dollar—and that is a warning signal.

Despite a weaker USD at the start of the week, both Gold and Silver have failed to attract meaningful buying interest, trading instead in narrow ranges. This breakdown in the usual inverse correlation suggests that markets are shifting focus away from currency moves and toward a more dominant driver: central bank policy risk.

This week’s lineup of major central bank meetings has effectively frozen conviction. With the Fed, ECB, and BoE all set to speak, traders are reluctant to take directional bets in precious metals until there is clarity on how policymakers intend to respond to the latest oil-driven inflation shock.

But the paralysis masks a clear asymmetry. The range of outcomes may be uncertain, but the direction of risk is not. Dovish outcomes are effectively off the table. Collectively, at best, central banks can deliver cautious holds, but even those would still imply a tightening bias rather than a pivot toward easing.

With dovish outcomes off the table, precious metals face asymmetric downside risk as central banks collectively lean hawkish. That is the key dynamic driving current price action. Even if policymakers sound cautious, the absence of easing signals removes a major pillar of support for Gold and Silver.

The ECB and BoE illustrate this tension clearly. Both are expected to hold in the near term, but markets continue to price further tightening, particularly from the ECB as early as June. Any cautious messaging tied to growth concerns may prevent an immediate selloff in precious metals, but it will not be enough to generate a sustained rally. The path of policy remains upward, even if the pace is slower.

For the Federal Reserve, Chair Jerome Powell’s likely message—no hikes, but no cuts either—reinforces the idea that policy is restrictive and will stay that way. Markets may be looking ahead to a potentially more dovish stance under Kevin Warsh, but that transition is not yet reflected in current policy.

At least, that the outlook until the Strait of Hormuz is fully reopened.

Technically, for Gold, focus stays on 4644.49 support. Decisive break there will add to the case that rebound from 4098.45 has completed at 4889.24 already. That should turn near term outlook bearish for deeper fall back to 4098.45 low, and possibly another take on 4000 psychological level.

Similarly, for Silver, firm break of 72.55 support should confirm that rebound from 60.97 has completed at 83.04. Deeper decline should then be seen back to 60.97, and possibly further to 60 psychological level.

• Overall Bias: The EUR/USD narrative has shifted from bearish to cautiously bullish
• Key Support: The bullish bias remains firm as long as the price sustains a hold above the critical 1.1700–1.1710 support zone.
• Tactical Scenarios: Bulls need to defend the 1.1700 area, with targets at 1.1769 and 1.1800; a break below 1.1700 triggers the bearish scenario.

EUR/USD finds itself grinding on a quiet Monday ahead of what is a busy week from a data and monetary policy perspective.

EUR/USD gapped lower after the weekend but has since recovered the weekend losses and is trading marginally higher on the day. This sort of price action could continue in the early part of the week with volatility likely to peak on Wednesday and Thursday when we have the FOMC and ECB meetings.

Of course any deal between the US and Iran in the interim could also shake up volatility and could potentially lead to USD weakness as the safe haven bets may begin to unwind. Keep that in mind while reading the technical setups and opportunities that may materialize below.

H4 Chart Analysis: The Structural Shift

On the H4 timeframe, the narrative has shifted from bearish to cautiously bullish. The most notable development is the price action reclaiming the 1.1700 psychological handle, which had previously acted as a stubborn ceiling.

The pair has successfully pushed above the 100, and 200-period Simple Moving Averages (MAs). Currently price is rejecting the 50-day MA opening up a potential retest of the 100-day MA at 17047. A sustained hold above the 1.1700–1.1710 support zone keeps the bullish bias firmly intact.

The RSI (Relative Strength Index) is currently hovering around 54, suggesting there is ample "runway" left before the pair reaches overbought territory.

EUR/USD Four-Hour Chart, April 27, 2026

Source: TradingView.com

H1 Chart Analysis: Consolidation Before the Next Leg?

Zooming into the H1 chart, we see a more granular view of the recent rally. The pair hit a local peak near 1.1754 (just shy of the 1.1769 resistance level) before edging lower.

Currently, the H1 price has rejected the 200-MA (blue line) as dynamic support. This is a critical junction; if the H1 can print a bullish engulfing candle or a long-wick rejection near this 1.1716-1.1700 area, it would signal that buyers are ready to defend the intraday trend.

The RSI on this timeframe has cooled off from overbought levels, effectively "resetting" for a potential move higher with some leeway for a drop toward 50 first.

EUR/USD One-Hour Chart, April 27, 2026

Source: TradingView.com

M15 Analysis & Scenarios: Tactical Planning for Upcoming Sessions

The Bullish Scenario: For the bulls to maintain control, they need to defend the 1.1710 - 1.1700 area. An ideal entry for a long position would be a successful retest of the M15 200-MA (blue line) followed by a break back above 1.1750.

• Target 1: 1.1769 (Recent high/Horizontal resistance).
• Target 2: 1.1800 (Psychological level).
• Invalidation: A 15-minute candle close below 1.1700.

The Bearish Scenario: The bears need to see a breakdown of the current consolidation. If the price fails to hold the 1.1700 level, we could see a "stop-run" back toward the primary support zone.

• Trigger: A break below 1.1700 would signal a deeper correction.
• Target 1: 1.1685.(Value area high).
• Target 2: 1.1643 April 8 swing low.
• Confirmation: Watch for the RSI on the M15 to drop below 50 to confirm momentum shift and look for an entry.

Key Levels to Watch:

• Resistance: 1.1769, 1.1800, 1.1867.
• Support: 1.1700, 1.1680, 1.1643

EUR/USD M15 Chart, April 27, 2026

Source:TradingView.com

The overall technical posture for EUR/USD remains tilted to the upside as long as the pair remains above the 1.1700 pivot zone. Traders should keep a close eye on the US Dollar Index (DXY) for broader directional cues, but from a pure price action standpoint, the bulls appear to be in the driver's seat heading into the next session.

Nasdaq-100: ⬆️ Buy

• Nasdaq-100 index broke multi-month resistance level 26120.00
•  Likely to rise to resistance level 28000.00

Nasdaq-100 index recently broke above the strong multi-month resistance level 26120.00 (which has been reversing the price from October).

The breakout of the resistance level 26120.00 accelerated the active short-term impulse wave 3 – which belongs to the intermediate impulse wave (3) from the start of April.

Given the clear daily uptrend, Nasdaq-100 index can be expected to rise to the next resistance level 28000.00 (target price for the completion of the active impulse wave (3)).

AUDJPY: ⬆️ Buy

•  AUDJPY reversed from support level 113.60
•  Likely to rise to resistance level 116.00

AUDJPY currency pair recently reversed up from the support level 113.60 (former resistance from the start of March, acting as the support after it was broken earlier this month).

The upward reversal from the support level 113.60 continues the active intermediate impulse wave (5) from December.

Given the clear daily uptrend, AUDJPY currency pair can be expected to rise to the next resistance level 116.00 (target price for the completion of the active impulse wave (5)).