Bank of America believes the odds of the Fed tightening are underestimated. The futures market currently implies a 35% probability of a federal funds rate hike in 2026. Derivatives markets expect it won't happen before March next year. Investors are pricing in the Kevin Warsh factor and the view among some FOMC officials that monetary policy is already restraining economic growth. The Federal Reserve is also concerned about the simmering armed conflict in the Middle East.

Dynamics of employment, Treasury yields, and the funds rate

Bank of America is confident the markets are wrong. Yes, Kevin Warsh was appointed by Donald Trump, who has made no secret of his desire to see lower rates. If their views had differed, the president would likely have chosen someone else. But one person can't do it alone. Even if a new Fed chair advocates for softer monetary policy, other FOMC members are unlikely to support him. The Warsh factor will not prevail.

Financial and economic conditions do not indicate that monetary policy is constraining GDP growth. In Q1, real GDP rose by 2%, employment increased by 100k or more in three of the past four months, and consumer prices have accelerated to a three-year high. Add to that stock indices repeatedly setting new records, and it becomes clear the US economy is in good shape. It can withstand higher rates.

Finally, despite the conflict in the Middle East and the related rise in gasoline prices, US consumer spending has remained stable. The Fed does not need to be overly worried about geopolitics if domestic demand is holding up.

ECB forecast for the economy and inflation

The eurozone economy looks much weaker than the US. France's unemployment rate climbed to 8.1%, its highest in five years, echoing Governing Council member Olli Rehn's comments about early signs of a stagflationary shock.

In these conditions, the ECB will find it extremely difficult to tighten policy. Futures market forecasts of 2–3 deposit rate hikes may prove incorrect.

Technically, on the daily chart, EUR/USD is moving from the upper to the lower band of the fair?value range of 1.169–1.178. It makes sense to hold short positions opened from $1.178 and add to them if the single currency settles below support at $1.170 and $1.168.

On Wednesday, gold (XAU/USD) is showing moderately negative dynamics, attempting to hold above the psychological $4,700 level, though without clear dominance from sellers. US inflation data published on Tuesday exceeded market expectations and strengthened investor confidence in further monetary tightening by the Federal Reserve. At the same time, ongoing geopolitical tensions contributed to the strengthening of the US dollar, which reached its highest level in more than a week, putting pressure on precious metal prices for a second consecutive day.According to the U.S. Bureau of Labor Statistics (BLS), the headline Consumer Price Index (CPI) rose from 3.3% a month earlier to 3.8% year-over-year (for the 12 months through April), reaching its highest level in nearly three years. Meanwhile, core inflation, which excludes food and energy prices, increased by 0.4% month-over-month. Its annual rate accelerated to 2.8%, the highest level in the past seven months and significantly above the Federal Reserve's 2% target.

Market participants reacted quickly: the probability of an interest rate hike by the end of the year is now estimated at around 35%. Additional pressure comes from expectations of further inflation growth amid high oil prices, which in turn are supported by strained relations between the United States and Iran. This has led to higher U.S. Treasury yields: yields on 30-year bonds briefly reached the 5.0% mark, approaching yearly highs, while two-year Treasury yields, which are sensitive to interest rate changes, remain near the 4% level. Such dynamics strengthen the U.S. dollar while simultaneously reducing the attractiveness of gold as a non-yielding asset.

Against this backdrop, prospects for a peace agreement between the U.S. and Iran have deteriorated further after President Donald Trump stated that the ceasefire remains extremely unstable and is effectively "hanging by a thread." Iran, for its part, rejected the U.S. proposal for resolving the conflict, which has now continued for more than two months amid disagreements over the nuclear program and the strategic standoff surrounding the Strait of Hormuz. Ongoing geopolitical tensions support the dollar's status as the world's key reserve currency and increase short-term pressure on precious metal prices. At the same time, the absence of strong follow-through selling calls for caution when opening new short positions after the corrective decline from Tuesday's three-week high.

Market participants appear to be taking a wait-and-see approach ahead of the two-day talks between U.S. President Donald Trump and Chinese President Xi Jinping. Today, to identify better trading opportunities, attention should be focused on the publication of the U.S. Producer Price Index (PPI) and developments on the geopolitical front, both of which could determine the short-term direction for the dollar and gold prices.

From a technical perspective, yesterday's pullback from the $4,765–$4,770 level stalled at the psychological $4,700 level, which coincides with the 20-day SMA and is acting as immediate support. This indicates continued buying interest on dips despite the current consolidation phase. Oscillators remain mixed: the RSI (Relative Strength Index) is neutral, indicating balanced forces between bulls and bears. The MACD histogram is also approaching neutral territory. This configuration reflects stabilization of momentum rather than the formation of a sustained trend. In this context, it would be reasonable to wait for confirmation in the form of active buying and a confident breakout above the $4,770 resistance level before considering a continuation of the upward scenario. Alternatively, traders should wait for a break below the 20-day SMA before looking to sell gold.

The test of the 157.76 price level occurred when the MACD indicator was just beginning to move upward from the zero mark, confirming a valid entry point for buying the dollar. As a result, the pair rose by only 17 points.

Today, U.S. Producer Price Index (PPI) data for April will be released. However, particular interest lies in the core PPI, which excludes the most volatile components such as food and energy prices. If the core PPI data exceeds forecasts, it could increase concerns about persistent inflationary pressure — especially after yesterday's consumer price index data. Conversely, lower readings could indicate slowing price dynamics, giving the Federal Reserve some room to breathe.

Additional intrigue will be added by speeches from FOMC members Susan M. Collins and Neel Kashkari, scheduled for the same day. Their statements may shed light on the Federal Reserve leadership's attitude toward existing inflation risks and economic prospects. Markets will closely watch for clues regarding future interest rate decisions, assessing how closely Fed officials' comments align with the latest economic data and overall market sentiment. The combination of April inflation statistics and Fed speeches creates conditions for potentially heightened volatility in the currency market. A hawkish Fed stance would obviously not favor the Japanese yen.

As for the intraday strategy, I will rely more heavily on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY when the entry point reaches the level of 157.91 (green line on the chart), with a target of growth toward 158.25 (the thicker green line on the chart). Around 158.25, I plan to exit long positions and open short positions in the opposite direction (expecting a movement of 30–35 points in the opposite direction from the level). Growth in the pair today can be expected if strong U.S. data is released.Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 157.69 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 157.91 and 158.25 can then be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after a breakout below the 157.69 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 157.39 level, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Pressure on the pair will return today if weak U.S. data is released.Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 157.91 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 157.69 and 157.39 can then be expected.

What's on the Chart

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated level where Take Profit orders can be placed or profits can be manually locked in, since further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated level where Take Profit orders can be placed or profits can be manually locked in, since further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

Important

Beginner Forex traders should make market entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.

The test of the 1.3531 price level occurred when the MACD indicator was just beginning to move downward from the zero mark, confirming a valid entry point for selling the pound. As a result, the pair declined by more than 20 points.

Against the backdrop of a lack of new fundamental data, the pound remained under pressure. The absence of significant positive news from the UK, as well as ongoing uncertainty in British domestic politics, is forcing investors to reconsider their positions regarding the British currency. At present, the main driver for the pound may be expectations regarding future Bank of England policy. Any hints of possible monetary tightening could halt the pound's decline.

Next, April Producer Price Index (PPI) data is expected to be released. Inflation indicators remain a key factor determining the trajectory of interest rates in the United States. The Producer Price Index, which reflects prices for goods and services at the wholesale level, is an important leading indicator of consumer inflation, since changes in production costs are often passed on to end consumers. Particular attention will be paid to the core PPI, which excludes the most volatile components and provides a clearer picture of underlying inflation. A stronger-than-expected reading could increase concerns about persistent inflationary pressure, leading to demand for the dollar and increasing pressure on the GBP/USD pair.

As for the intraday strategy, I will rely more heavily on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry point reaches the level of 1.3523 (green line on the chart), with a target of growth toward 1.3553 (the thicker green line on the chart). Around 1.3553, I plan to exit long positions and open short positions in the opposite direction (expecting a movement of 30–35 points in the opposite direction from the level). Pound growth today can only be expected after weak U.S. data.Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3500 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3523 and 1.3553 can then be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after a breakout below the 1.3500 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 1.3458 level, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Pressure on the pound will return today if strong U.S. data is released.Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3523 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3500 and 1.3458 can then be expected.

What's on the Chart

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated level where Take Profit orders can be placed or profits can be manually locked in, since further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated level where Take Profit orders can be placed or profits can be manually locked in, since further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

Important

Beginner Forex traders should make market entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.

The test of the 1.1731 price level occurred when the MACD indicator was just beginning to move downward from the zero mark, confirming a valid entry point for selling the euro. As a result, the pair declined toward the target level of 1.1704.

The euro continued to lose ground against the dollar after Eurozone GDP data for the first quarter of this year failed to impress, showing growth of only 0.1%. Industrial production even declined by 2.1% year-over-year. These macroeconomic indicators point to dangerous stagnation trends in the EU economy, which could lead to fairly serious economic consequences. The fact that the European Central Bank can no longer resort to additional economic stimulus measures also creates further challenges for ECB leadership.

U.S. inflation data will be released shortly. Information on the U.S. Producer Price Index (PPI) for April, as well as the core version of the indicator, will be published. A decline in the indicator could signal a slowdown in inflationary processes, though this outcome is unlikely. Particular attention will be paid to the core PPI, as it better reflects persistent inflationary trends by excluding volatile food and energy prices.

At the same time, speeches by FOMC members Susan M. Collins and Neel Kashkari are expected. Their statements may provide insight into the Fed's current assessment of future interest rates — especially given the rise in consumer inflation in the country.

As for the intraday strategy, I will rely more heavily on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible when the price reaches the level of 1.1716 (the green line on the chart), with a target of growth toward the 1.1747 level. At 1.1747, I plan to exit the market and also sell the euro in the opposite direction, aiming for a movement of 30–35 points from the entry level. Euro growth today can only be expected after weak U.S. data.Important! Before buying, make sure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the event of two consecutive tests of the 1.1695 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.1716 and 1.1747 can then be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1695 level (the red line on the chart). The target will be the 1.1649 level, where I plan to exit the market and immediately buy in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Pressure on the pair will return today if strong U.S. data is released.Important! Before selling, make sure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today in the event of two consecutive tests of the 1.1716 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.1695 and 1.1649 can then be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated level where Take Profit orders can be placed or profits can be locked in manually, since further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated level where Take Profit orders can be placed or profits can be locked in manually, since further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

Important

Beginner Forex traders should make market entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.

The wave situation on the hourly chart currently remains simple. The latest completed downward wave did not break the previous low, while the latest upward wave (which is still forming) broke the previous peak. Thus, the trend remains "bullish," but highly unstable — all recent waves are approximately equal in size, and the movement has shifted into a horizontal pattern. The temporary truce between Iran and the U.S. supported the bulls, but now, after five weeks, it can be said that geopolitics is moving toward preserving the conflict. Therefore, bullish attacks may remain restrained or stop altogether.

On Tuesday, negative geopolitical news continued to hit the market. It became known that Donald Trump intends to resume military operations and bombing strikes against Iran if negotiations with Tehran finally reach a deadlock. In my opinion, they are already there. Over the weekend, the U.S. and Iran once again failed to achieve any progress, and on Monday the U.S. president stated that the ceasefire is hanging by a thread. If Washington decides to resume missile strikes against Iran or forcibly lift the blockade of the Strait of Hormuz, Iran threatens to increase uranium enrichment to 90% and to respond to every strike, as it did in February and March. Thus, at the current moment, the parties to the conflict are not moving toward signing a memorandum of understanding or a full peace agreement. They are moving toward an escalation of the conflict, which under such a backdrop could continue for many months or even years. This is precisely why bullish attacks have ceased in recent weeks, while the bears are now attacking more frequently. The market still believes in a miracle and hopes that the parties will at least avoid a new war. Agreeably, a frozen conflict is better than a new war. However, the chances of this relatively positive scenario are shrinking with each passing day.

On the 4-hour chart, the pair made another rebound from the 50.0% corrective level at 1.1778, reversed in favor of the U.S. dollar, and began declining toward the corrective levels of 1.1706 and 1.1617. A consolidation above the 1.1778 level would allow traders to expect a resumption of the bullish trend toward the levels of 1.1849 and 1.1938, which formed after the pair exited the descending trend corridor. No emerging divergences are currently observed on any indicators.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 383 Long positions and 3,893 Short positions. Over seven weeks in February and March, the bulls' total advantage disappeared, and over the past six weeks the situation has somewhat balanced out. The total number of Long positions held by speculators now stands at 217,000, while Short positions amount to 185,000. The gap is once again widening in favor of the euro.

Overall, in the long term, large players continue to look at the euro with considerable interest. Of course, events of various kinds around the world — which have been plentiful in recent years — continue to influence investor sentiment. In particular, the market's attention remains focused on the Middle East, where the war has only been paused, not ended. Thus, in the near future, the euro and dollar exchange rates will depend not on the monetary policies of the Federal Reserve or the ECB, nor on economic data, but on developments in Iran.

Economic Calendar for the U.S. and the Eurozone:

• Eurozone – Industrial Production Change (09:00 UTC).
• Eurozone – Q1 GDP Change (09:00 UTC).
• United States – Producer Price Index (12:30 UTC).
• Eurozone – Speech by ECB President Christine Lagarde (19:15 UTC).

The economic calendar for May 13 contains four entries, none of which are of particular interest. The impact of the news background on market sentiment on Wednesday is expected to be weak.

EUR/USD Forecast and Trading Tips:

Selling opportunities were available after a rebound from the 1.1786 level and after consolidation below the 1.1745 level on the hourly chart, with a target of 1.1666. These positions may still be held open today. New buying opportunities may be considered after consolidation above the 1.1745 level, with targets at 1.1786 and 1.1824.

Fibonacci retracement grids are drawn from 1.2082–1.1410 on the hourly chart and from 1.1474–1.2082 on the 4-hour chart.

The wave situation remains bullish. The last completed upward wave broke through the previous peak, and the last downward wave broke through the previous low by only a few points in sideways conditions. Geopolitics provided the bears with an almost complete advantage in the market for two months, then the geopolitical background changed and now supports the bulls to a greater extent. Currently, the truce between Iran and the United States continues, but the situation is shifting towards an escalation of the conflict and a prolonged confrontation. It will be difficult for bulls to launch attacks in the coming weeks, and the bullish trend will be reversed below the 1.3513–1.3526 level.

The information backdrop on Tuesday was favorable for the bears, as there was no positive news from the Middle East. The market is again focusing on the dollar, fearing a resumption of the war between Iran and the USA, as both sides of the conflict continue to stoke tensions, regularly exchanging new threats. No one is willing to concede in negotiations. Thus, the positions of the bulls are deteriorating day by day. Currently, the GBP/USD pair is being held up from a stronger decline by the fact that the truce is still in place. Though it has been violated several times, full-scale hostilities are not occurring. However, if escalation happens and negotiations are terminated, the pair could drop much lower than the 1.3513–1.3526 level, affecting the graphical picture. It is also worth noting yesterday's report on inflation in the USA, which points to one thing — the indicator is slipping out of the Fed's control. In just two months, the Consumer Price Index has jumped from 2.4% year-on-year to 3.8% year-on-year. If the conflict in the Middle East continues, inflation could surge to 5-6%. What the Fed will do in this case is still hard to understand. Donald Trump continues to demand policy easing, but in this case, inflation could spike to 7-8%.

On the 4-hour chart, the pair has consolidated above the descending trend channel, which allows for an expectation of a full-fledged "bullish" trend. A rebound at the 50.0% Fibonacci level of 1.3514 would lead to new bull attacks towards the levels of 1.3597 and 1.3700. The graphical picture on the hourly chart is now more informative, so I advise keeping a closer eye on the hourly chart. No new developing divergences are currently observed.

Commitments of Traders (COT) Report:

The sentiment among "Non-commercial" traders in the last reporting week has become more "bearish." The number of Long positions held by speculators rose by 2,996, while the number of Short positions increased by 6,265. The gap between the number of Long and Short positions is currently as follows: 62 thousand versus 126 thousand. For six consecutive weeks in February and March, non-commercial traders actively increased their sales and shed their purchases, leading to a significant imbalance between Long and Short positions. In recent months, bears have dominated, which raises no questions given the geopolitical situation.

I still do not believe in a "bearish" trend for the pound, but now everything depends not on economic indicators, Trump's trade policy, or central banks' monetary policy, but on the duration, scale, and consequences of the war in the Middle East. In recent weeks, the market has adjusted towards de-escalation of the conflict, but the latest news indicates that we are still far from a full truce, and war could resume any day. In this case, the advantage of the bears could become even stronger.

News calendar for the USA and the UK:

• USA – Producer Price Index (12:30 UTC).

The economic calendar for May 13 contains one minor entry. The impact of the economic background on market sentiment on Wednesday may be extremely weak.

Forecast for GBP/USD and advice for traders:

Sales of the pair were possible upon a new rebound on the hourly chart from the 1.3632–1.3641 level with a target of 1.3513–1.3526. The target has been reached. New sales should occur upon closing below the 1.3513–1.3526 level with a target of 1.3428–1.3437. Purchases are possible upon a rebound from the 1.3513–1.3526 level with a target of 1.3632–1.3641.

Fibonacci levels are constructed based on 1.3866–1.3158 on the hourly chart and 1.3866–1.3158 on the 4-hour chart.

Despite this, the business confidence index grew 5 points to -24. That gain likely reflects hopes in April for a rapid end to the conflict in the Middle East. However, actual business activity fell by 3 points and remains below the long-term average, reflecting current strains. Forward orders dropped 4 points, and capex fell 8 points, the largest monthly decline since the post-COVID period began.

In April, US inflation showed a sharp pick-up: the annual headline rate rose from 3.3% to 3.8%, and the core rate from 2.6% to 2.8%. Both exceeded forecasts. Markets reacted to these data and to tough comments from Chicago Fed President Austan Goolsbee, who said inflation is not slowing and is moving in the wrong direction. That pushed US bond yields higher.

Before the release, CME Fed funds futures had not priced a rate hike this year. After the report, the probability of a hike by December rose above 30%. This is not definitive yet, since the May inflation report will be released before the next Fed meeting (in 35 days) and will be decisive if it also shows an uptick. It is clear, however, that the chances of a Fed cut have fallen significantly.

On Thursday, the Melbourne Institute will publish its monthly consumer inflation expectations report. A key event that could affect the AUD will be US President Trump's visit to China and any attempts to secure concessions from Xi Jinping. Chinese demand is a major factor for Australia, affecting not only the trade balance but the overall resilience of the economy.

According to the CFTC report, the net long position in AUD rose by $490 million in the reporting week to $5.651 billion. Surprisingly, long?term investors appear to be ignoring geopolitical risks in the Middle East and are positioned for a stronger Australian dollar over the long run. The main driver may be the sharp rise in inflation expectations and the prospect of further RBA rate hikes, which would boost yields and the currency's appeal. Nevertheless, the implied price continues to decline.

Technically, the bullish impulse in AUD/USD remains strong; the daily RSI has not yet entered the overbought zone. However, a move to the 0.8010 target without a corrective pullback seems unlikely. The Australian economy is already facing energy issues, and much will depend on how the RBA seeks to strike a balance. For now, the Bank is focused on fighting inflation and is hiking rates aggressively, which supports the AUD's strong bullish momentum. Still, the implied price dynamics suggest a reversal toward the nearest support at 0.6940–0.6960 is close.

Prices for dairy products, one of New Zealand's key export items, so far show no signs of rising. The market treats the threat of a food crisis following an energy shock (due to the expected decline in global fertilizer production) as hypothetical. At present, this does not have a material effect on prices.

ANZ believes that the war in the Middle East had virtually no impact on New Zealand's economy in Q1, so the quarterly GDP data could even beat expectations — a positive factor supporting the kiwi at the moment. At the same time, GDP forecasts for Q2 and Q3 have been reduced by 0.5% as private consumption, investment and services exports are expected to decline. Accordingly, annual GDP is now expected to be 1.7% rather than 2.1%. Note that this does not yet imply a recession.

The next RBNZ meeting is on May 26; the market currently prices in roughly a 30% probability of a rate hike. Accordingly, there is upside potential for the kiwi if the market raises the likelihood of that event.

This week will bring more information: April PMI indices will be released and will show how New Zealand's economy is adjusting to geopolitical changes. Forecasts are negative; most commentators expect a slowdown in economic activity and in price growth. Inflation forecasts are currently sharply negative — in April the RBNZ identified three indicators it watches to assess medium-term inflationary forces: wage inflation, core inflation and medium- to long-term inflation expectations. In Q1, these indicators did not look threatening and were close to forecast; for Q2, the RBNZ raised expectations from 2.37% to 2.53%, which is still moderate, but risks are clearly shifting toward higher values.

The net short position on the New Zealand dollar (NZD) increased by USD 114 million in the reporting week, reaching -USD 2.84 billion. This is a significant bias against the kiwi. Short positions have been rising for seven consecutive weeks despite NZD/USD having strengthened amid hopes for a resolution of the conflict in the Middle East. Long-term investors appear to be positioning for a more pessimistic scenario. The implied price remains below the long-term average.

Markets are starting to realize that a quick resolution of the current situation is unlikely and that the crisis will develop further. We believe a local peak at 0.5986 has already been formed. Bearish positions are strengthening, and they will look for an opportunity to break below the nearest resistance level at 0.5913.

We expect NZD/USD to fall below that level, which would change the medium-term technical picture to bearish. The next downside target is the 0.5860–0.5880 range.

The recent rise in the kiwi back to pre-conflict levels has been driven mainly by a weaker US dollar and improved global risk appetite, reflected in gains in US stock indices, rather than by local New Zealand factors. In case of renewed escalation in geopolitical tensions, the New Zealand dollar would be vulnerable, coming under significant pressure.

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Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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Headline CPI rose 0.6% month?on?month — exactly in line with forecasts. The annual CPI reached 3.8%, the highest since May 2023 and, for the first time in three years, exceeding wage growth. This means real incomes for Americans have notably fallen.

The core index, excluding food and energy, rose 0.4% for the month — slightly above the consensus forecast. Year?on?year core inflation was 2.8% — the largest increase since September last year.

Several key components stand out among those pushing inflation higher. Energy remains the main driver of price growth: in April it jumped 3.8% month?on?month, after a 10.9% surge in March. Gasoline prices rose 5.4%. Importantly, gasoline price acceleration is a key factor in American consumer confidence in their president and his policies. Airfares surged sharply — up 2.8% month?on?month and about 20.7% year?on?year — one of the most notable spikes in the services sector.

The report also says that housing prices made a distorted contribution to core inflation due to a statistical anomaly. At the end of last year, during the government shutdown, housing market data were not collected and statisticians recorded a zero price change. This led to an overstatement of the April figures: according to Natixis, owner?equivalent rent added 0.17 percentage points to the core measure. Housing prices rose the most since 2024.

The main threat to the US economy now is the so?called second?wave effect: when persistently high headline inflation influences inflation expectations among consumers and businesses. In that case, containing price pressure will become significantly harder, placing increasing strain on the Federal Reserve. This scenario has prompted market participants to revise Fed rate forecasts — the probability of a hike by year?end has already exceeded 40%.

As noted above, the US dollar responded with a rise because the April CPI report clearly showed that inflation in the US remains stubbornly high and increasingly multi?faceted — energy, housing, and services. If the situation in the Middle East does not stabilize in the near term, it will become even harder for the Fed to cope with rising price pressure.

Technical outlook for EUR/USD

Buyers now need to focus on taking the 1.1750 level. Only that would allow targeting a test of 1.1795. From there, the pair can move to 1.1825, though doing so without support from major players will be difficult. The furthest target is 1.1850. On the downside, I expect serious buying interest only around 1.1725. If there is no one there, it would be better to wait for a new low at 1.1700 or open long positions from 1.1675.

Technical outlook for GBP/USD

Pound buyers need to take the nearest resistance at 1.3550. Only that would allow targeting 1.3585, above which a breakout will be quite difficult. The furthest target is 1.3620. On the downside, bears will try to take control of 1.3525. If they succeed, a break of the range would deal a serious blow to bulls and push GBP/USD to a low of 1.3500 with a prospect of moving to 1.3480.

Today, Asian equity markets closed higher despite a mixed news flow. Investors used an early sell-off in chip names to add positions, stopping the rout. The MSCI Asia Pacific index recouped from initial losses and closed up 0.4%. The rally was led by South Korean tech giants: SK Hynix jumped by 7.6% to a record high, and Samsung Electronics added 4.3%. South Korea's market rose by 1.7%, fully erasing the morning decline.

The sector received an additional catalyst when Nvidia CEO Jensen Huang was reported to be joining President Trump's visit to China. The news immediately lifted sentiment — Nvidia shares rose by more than 3% in after-hours trading. Futures on US and European indices also turned higher.

At the same time, tension in the bond markets increased. US April inflation exceeded expectations: headline CPI rose by 3.8% year-on-year, marking the highest level since 2023, while core CPI (excluding food and energy) printed 2.8%. Persistent high oil and food prices, together with the Middle East conflict, are being fingered as the main drivers.

All of this has renewed expectations of Fed rate hikes this year. Two-year US Treasury yields held just below 4%, while 30-year yields are only two basis points off their yearly highs. Japanese 20-year government bond yields hit levels not seen since 1997 amid local inflationary pressure from expensive energy. Australian bond prices fell in the wake of that move.

In FX markets, sterling remained under pressure due to the UK political crisis, although it held relatively steady in the Asian session. The Indian rupee edged lower despite the government's decision to more than double import duties on gold and silver.

Regarding commodities, Brent crude eased by 1.4% to about $106.30 per barrel. Gold lost 0.3% to settle near $4,700 per ounce, while silver traded around $86.40.

Technically, the S&P 500 analysis indicates that the immediate task for buyers is to overcome the resistance level of $7,427. Doing so would confirm renewed upside momentum and could open the path toward $7,451. Maintaining control above $7,474 would further cement buyers' advantage. On the downside, buyers need to defend the $7,404 area. A break below that level would likely push the index back toward $7,381 and open the way to $7,361.

In theory, accelerated inflation forces the Fed to tighten monetary policy, creating an unfavorable backdrop for US equities. In practice, the S&P 500 performed strongly in 2023–2025 despite high inflation and elevated fed funds, largely because falling inflation expectations eventually allowed the Fed to pivot to easing in 2025. Today, expectations of future inflation are rising again.

TIPS yields and inflation expectations

A similar pattern appeared in 2021, but the post-pandemic recovery then supported equities. US stocks only corrected sharply in 2022 once the Fed began hiking in earnest. So equities retain some upside room until the central bank actually starts lifting interest rates. After the April inflation release, the futures market pushed out the expected timing of that first hike from April to March 2027.

Crucially, the S&P needs a durable structural advantage. In 2021, that was rapid post-COVID economic growth. In 2026, impressive corporate profits act as a driver. Q1 results for S&P constituents were the strongest in two decades outside of post-2008 and post-2020 recoveries.

S&P 500 company earnings dynamics

Still, there is a sour note. The bulk of the gains are concentrated in memory-chip manufacturers. Supply shortages have produced windfall profits for producers and rising costs for consumers, creating a massive divergence and fueling the Philadelphia Semiconductor Index's more than 60% rally over the past six weeks.

Those names also took the biggest hit after April's CPI. Broadcom and Micron Technology were among the top five losers on May 12, underscoring how fragile chipmakers' positions have become. If fears intensify, that bubble could burst.

For now, however, FOMO dominates the equity market, and the index's dip was immediately bought.

Technically, the S&P 500 pulled back on the daily chart after reaching the first of two previously set long targets at $7,429 and $7,500. A pin-bar with a long lower wick formed. A break of its high near $7,410 would allow buyers to add exposure and move the target up to $7,700.

Meanwhile, according to the latest Glassnode report, the volume of unrealized losses among long-term Bitcoin holders (LTH Relative Unrealized Loss) reached a relatively low 15% in April. This metric is markedly different from past bear markets, where a similar indicator often approached 75%, signaling a deeper level of pessimism and panic among investors.

The current BTC drawdown, then, does not yet show signs of full-scale capitulation. In previous market cycles, the capitulation phase—characterized by mass sell-offs and maximum losses—preceded the market bottom. The absence of that pattern now may indicate the market has not yet reached its low, and Bitcoin has not found its bottom either.

There remains a possibility that events will follow a more negative scenario. In that case, the market could resume falling in the near term, and the trigger could be anything from a CLARITY failure to new hostilities in the Middle East. Traders should be prepared for the possibility of larger declines, because current data do not rule out a deeper, longer-lasting correction that could take time before the market finds stable support.

Trading recommendations

As for Bitcoin's technical picture, buyers are currently targeting a return to $81,800, which would open a direct path to $83,600, and then on to $85,600. The farthest target is the high around $87,900; surpassing that would indicate attempts to return to a bull market. If Bitcoin falls, buyers are expected at $80,100. A return of the price below that area could quickly push BTC down to around $78,200. The furthest target on the downside would be the $76,300 area.

For Ethereum's technical picture, a clear close above $2,337 would open a direct path to $2,407. The farthest target is the high around $2,446; breaking that would signal strengthening bullish sentiment and renewed buyer interest. If Ether falls, buyers are expected at $2,263. A return of the price below that area could quickly push ETH down to around $2,181. The farthest downside target would be the $2,114 area.

What's on the chart

• The red lines represent support and resistance levels, where the price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.

Yesterday, the precious metal came under pressure following the release of US inflation data, which prompted markets to anticipate an increase in Federal Reserve interest rates. The report indicated that the US Consumer Price Index rose by 0.6% in April, marking the largest jump since 2023, while real wages for Americans fell for the first time in three years—inflation eroded the nominal income growth.

Markets reacted quickly: futures markets are now pricing in a probability of over 40% for a Federal Reserve rate hike by the end of the year, while at the end of April, this probability was close to zero. The yield on US bonds increased as investors demanded a higher premium to hold them amid sustained inflationary pressure from energy prices.

It would seem that gold should be declining: historically, rising interest rates negatively impact the metal, which does not generate interest income. However, losses have been quite moderate—and this is not a coincidence. The key factor in this behavior is demand, primarily from central banks, which continue to actively increase their reserves.

An additional blow to the market came yesterday from India, the world's second-largest consumer of gold. The country's authorities more than doubled import duties on gold and silver, raising them from 6% to approximately 15%. This move is explained by the desire to protect the rupee and replenish foreign exchange reserves. Silver has remained virtually unchanged in price, trading around $86.47 per ounce—up 17% since the beginning of May. Platinum and palladium have seen declines.

Thus, gold finds itself in a turbulent zone, influenced by several factors: the risk of a US monetary policy tightening, unexpected protectionist measures from major consumers, and instability in energy markets. Nevertheless, the metal is currently showing enviable resilience, keeping the chances of a return to a bull market alive in the near future.

Given the current technical picture, gold buyers need to reclaim the nearest resistance at $4,708. This will allow them to target $4,771, which will be quite challenging to break through. The further target will be around $4,835. In the event of a decline in gold prices, bears will attempt to take control of $4,656. If they succeed, a breakout of this range will deal a serious blow to bullish positions and push gold down to a low of $4,607, with the potential to reach $4,546.

Although the condition of Gold is still moving in a ranging pattern, but it has the potential to test its nearest resistance level, as confirmed by both EMAs which is forming a Golden Cross.

Key Levels

1. Resistance. 2 : 4843.55

2. Resistance. 1 : 4779.06

3. Pivot : 4708.50

4. Support. 1 : 4644.01

5. Support. 2 : 4573.45

Tactical Scenario

Positive Reaction Zone: If the price holds at 4708.50, there is a likelihood of a move up toward 4779.06.

Momentum Extension Bias: If 4779.06 is broken, 4843.55 becomes the next target.

Invalidation Level / Bias Revision

The upside bias weakens if Gold falls below 4573.45.

Technical Summary

EMA(50) : 4702.90

EMA(200): 4693.23

RSI(14) : 42.50

Economic News Release Agenda:

Tonight the United States will release the following economic data:

US - Core PPI m/m - 19:30 WIB

US - PPI m/m -19:30 WIB

US - Crude Oil Inventories - 21:30 WIB

US - 30-y Bond Auction - 00:01 WIB

With technical indicator condition supporting the strength in Silver today, then XAG/USD has the potential in the near term to test its nearest resistance level.

Key Levels

1. Resistance. 2 : 89.682

2. Resistance. 1 : 88.108

3. Pivot : 85.567

4. Support. 1 : 81.993

5. Support. 2 : 81.452

Tactical Scenario

Positive Reaction Zone: If the price holds above 85.567, there is a likelihood of a move up toward 88.108.

Momentum Extension Bias: If 88.108 is broken, 89.682 may be tested.

Invalidation Level / Bias Revision

The upside bias weakens if Silver falls below 81.452.

Technical Summary

EMA(50) : 85.448

EMA(200): 82.114

RSI(14) : 51.04

Economic News Release Agenda:

Tonight the United States will release the following economic data:

US - Core PPI m/m - 19:30 WIB

US - PPI m/m -19:30 WIB

US - Crude Oil Inventories - 21:30 WIB

US - 30-y Bond Auction - 00:01 WIB

In the absence of interesting news from the cryptocurrency market, attention has shifted to the announcement that financial giant Charles Schwab will gradually launch innovative "Schwab Crypto" accounts for its retail clients, ushering in a new era of integrating cryptocurrency assets into the traditional investment ecosystem. This strategic move underscores the growing confidence of major Wall Street players in the potential of digital currencies, despite the market's volatility and regulatory challenges.

The first privileged users have already gained access to direct trading of Bitcoin and Ethereum within a single mobile application. Now, without leaving their familiar platform, traders can simultaneously manage positions in crypto assets, stocks, exchange-traded funds (ETFs), bonds, and other traditional instruments. This seamless integration simplifies portfolio diversification while minimizing fees and risks associated with switching between platforms.

I would like to remind you that Charles Schwab is one of the largest brokers in the US, with client assets exceeding $12.2 trillion. The company serves millions of retail and institutional investors, offering tools for all levels of experience—from beginners to professionals. The launch of "Schwab Crypto" follows similar initiatives by competitors such as Fidelity and Robinhood, but it emphasizes security and compliance with the SEC's strict regulatory standards.

This move could act as a catalyst for a massive influx of traditional investors into the cryptocurrency market, thereby enhancing the liquidity of BTC and ETH.

I will continue to act based on any significant pullbacks in Bitcoin and Ethereum, with the expectation of the continued development of a bullish market in the long term, which remains intact.

As for short-term trading, the strategy and conditions are described below.

Bitcoin

Buy Scenario

Scenario #1: I plan to buy Bitcoin today upon reaching an entry price around $81,300, targeting a move to $82,200. At around $82,200, I plan to exit the buy trades and immediately sell on the bounce. Before buying on a breakout, ensure the 50-day moving average is below the current price and the Awesome indicator is in the positive zone.

Scenario #2: I can buy Bitcoin from the lower boundary of $80,900 if there is no market reaction to its breakout back towards $81,300 and $82,200.

Sell Scenario

Scenario #1: I plan to sell Bitcoin today upon reaching an entry price around $80,900, targeting a drop to $80,000. At around $80,000, I will exit the sell trades and immediately buy on the bounce. Before selling on a breakout, ensure the 50-day moving average is above the current price and the Awesome indicator is in the negative zone.

Scenario #2: I can sell Bitcoin from the upper boundary of $81,300 if there is no market reaction to its breakout back towards $80,900 and $80,000.

Ethereum

Buy Scenario

Scenario #1: I plan to buy Ethereum today upon reaching an entry price around $2,308, targeting a move to $2,330. At around $2,330, I will exit the buy trades and immediately sell on the bounce. Before buying on a breakout, ensure the 50-day moving average is below the current price and the Awesome indicator is in the positive zone.

Scenario #2: I can buy Ethereum from the lower boundary of $2,293 if there is no market reaction to its breakout back towards $2,308 and $2,330.

Sell Scenario

Scenario #1: I plan to sell Ethereum today upon reaching an entry price around $2,293, targeting a drop to $2,267. At around $2,267, I will exit the sell trades and immediately buy on the bounce. Before selling on a breakout, ensure the 50-day moving average is above the current price and the Awesome indicator is in the negative zone.

Scenario #2: I can sell Ethereum from the upper boundary of $2,308 if there is no market reaction to its breakout back towards $2,293 and $2,267.

The test of the 157.67 price coincided with the moment when the MACD indicator moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the dollar.

Yesterday, the dollar did not gain significantly against the Japanese yen, despite the US main Consumer Price Index (CPI) rising by 0.6% in April, exceeding analysts' forecasts. Core prices also increased by 0.4%. For the Federal Reserve, such figures are a cause for concern, raising the likelihood of a tighter monetary policy. However, the yen remained around 158, as many market participants remain wary of possible Bank of Japan interventions.

The absence of dollar purchases can be attributed to concerns among many market participants about potential interventions by the BOJ. Amid the yen's weakness, which continues to worry Japanese authorities, there is a real possibility that Tokyo may intervene in the currency market to support the yen if its exchange rate continues to decline rapidly. Such expectations of intervention act as a sort of ceiling for further growth of the dollar against the yen, creating a zone of psychological resistance that market players seek to avoid due to fears of direct losses.

For the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today upon reaching an entry price around 157.76 (green line on the chart), targeting a move to 158.15 (thicker green line on the chart). At around 158.15, I plan to exit the long positions and immediately sell in the opposite direction, expecting a movement of 30-35 pips from the entry point. It is best to return to buying the pair during corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of 157.61 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth towards the opposite levels of 157.76 and 158.15.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after the 157.61 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 157.16, where I plan to exit the short positions and immediately buy in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from the level. Sellers could return at any moment; any hint from the central bank could trigger this. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its decline from it.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of the price at 157.76 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a downward market reversal. One can expect a decline toward the opposite levels of 157.61 and 157.16.

What is on the Chart:

• The thin green line – entry price at which the trading instrument can be bought;
• The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
• The thin red line – entry price at which the trading instrument can be sold;
• The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.

The test of the price at 1.3519 coincided with the moment when the MACD indicator was just starting to move downward from the zero mark, confirming the correct entry point for selling the pound. However, a significant sell-off did not materialize.

Domestic political instability in the UK, along with US inflation data, led to the decline of the British pound yesterday. A sharp rise in US consumer prices, significantly exceeding economists' expectations, triggered a wave of caution among investors, which was immediately reflected in the value of major global currencies. The core Consumer Price Index (CPI) rose by 0.6% in April, surpassing forecasts. Of particular concern was the rise in the core CPI, which, despite excluding volatile components such as food and energy, accelerated to 0.4%.

Today, there is no significant fundamental data scheduled for the UK in the first half of the day, so all attention will be on the speech by Bank of England Monetary Policy Committee member Catherine L. Mann. Given the current inflation picture and the resilience of the British economy, Mann's words could have a substantial impact on the pound sterling's exchange rate. In the absence of economic data, traders will carefully analyze the tone and content of her speech. Any statements regarding inflation prospects, wage growth, or the state of the labor market will be perceived as signals for potential future interest rate hikes. It is important to remember that the BoE is under pressure to balance the fight against inflation with support for economic growth.

Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy the pound today upon reaching an entry price around 1.3558 (green line on the chart), targeting a rise to 1.3603 (thicker green line on the chart). At point 1.3603, I plan to exit the market and also sell the pound in the opposite direction, expecting a movement of 30-35 pips from the entry point. A strong rise in the pound can only be expected if there is good news from the Middle East. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of 1.3531 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth towards the opposite levels of 1.3558 and 1.3603.

Sell Scenarios

Scenario #1: I plan to sell the pound after the 1.3531 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3464, where I plan to exit the short positions and immediately buy in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from the level. Pressure on the pound could return if there is bad news from the Middle East. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its decline from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of 1.3558 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a downward market reversal. One can expect a decline toward the opposite levels of 1.3531 and 1.3464.

What is on the Chart:

• The thin green line – entry price at which the trading instrument can be bought;
• The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
• The thin red line – entry price at which the trading instrument can be sold;
• The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.

The test of the price at 1.1740 coincided with the moment when the MACD indicator was just beginning to move downward from the zero mark, confirming the correct entry point for selling euros. As a result, the pair dropped by 15 pips.

According to reports, the main Consumer Price Index (CPI) in the US rose by 0.6% month-on-month in April. Even more significant is the increase in the core index, which rose by 0.4%, exceeding economists' forecasts. This information raises serious concerns about the further development of inflationary processes in the world's largest economy. The increase in the core index, which is considered a more accurate barometer of persistent inflation as it excludes the volatility of food and energy prices, is especially alarming. The 0.4% figure exceeded expectations, suggesting deeper systemic issues than previously assumed due to the war in the Middle East.

Today, the first half of the day will be filled with economic news from the Eurozone. Revised figures on GDP growth for the first quarter of this year are scheduled for release. These figures are a fundamental marker of the region's economic health and can significantly influence current analyst forecasts. Alongside the GDP data, data illustrating trends in the industrial sector will be published. Investors and analysts also await employment data for the Eurozone. The state of the labor market plays a significant role in shaping consumer activity and overall economic momentum. Favorable changes in employment could signal stability in economic growth, while negative signals could raise concerns about potential weakness, putting pressure on the euro.

Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy euros today upon reaching an entry price around 1.1745 (green line on the chart), targeting a move to 1.1775. At point 1.1775, I plan to exit the market and also sell euros in the opposite direction, expecting a movement of 30-35 pips from the entry point. I expect the euro to rise after good data from the Eurozone. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy euros today if there are two consecutive tests of 1.1731 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect growth toward the opposite levels of 1.1745 and 1.1775.

Sell Scenarios

Scenario #1: I plan to sell euros once the price reaches 1.1731 (red line on the chart). The target will be the level of 1.1704, where I plan to exit the market and immediately buy in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from the level. Pressure on the pair could return at any moment today. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its decline from it.

Scenario #2: I also plan to sell euros today if there are two consecutive tests of 1.1745 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a downward market reversal. One can expect a decline toward the opposite levels of 1.1731 and 1.1704.

What is on the Chart:

• The thin green line – entry price at which the trading instrument can be bought;
• The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
• The thin red line – entry price at which the trading instrument can be sold;
• The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.

The euro declined in the first half of the day amid weak Eurozone data. News that the main Consumer Price Index (CPI) in the US rose by 0.6% in April, and that the core index, excluding food and energy costs, increased by 0.4%, also put pressure on the euro, pound, and other risk assets during American trading.

These data raise serious concerns about the further development of inflationary pressures in the world's largest economy. The ongoing rise in the CPI indicates that inflationary pressure is not only not easing but may be accelerating, despite the Federal Reserve's measures to curb price growth. The increase in the core index, which is considered a more accurate indicator of sustained inflation, is particularly troubling for analysts. The 0.4% figure exceeded expectations, suggesting deeper, more systemic issues than previously thought.

Today, the first half of the day promises to be rich in economic news from the Eurozone. Revised data on first-quarter GDP growth are expected to be released. These figures are a key indicator of the region's economic health and could significantly adjust current forecasts. A minimal growth rate of 0.1% does not reassure about the Eurozone's future prospects.

Simultaneously with the GDP data, figures characterizing the dynamics of industrial production will be published. This indicator reflects activity in the manufacturing sector, which plays an important role in the Eurozone economy. It is expected that the change in industrial production will provide a clearer picture of current production capacities and the potential for future growth, which is at risk due to high inflation stemming from the situation in the Middle East.

As for the pound, there are no surprises in the UK's economic calendar this morning. The main event market participants will be paying attention to is a speech by Catherine L. Mann, a member of the Bank of England's Monetary Policy Committee. Mann's words may shed light on the BoE's current assessments of the British economy and, more importantly, on its vision for the future trajectory of monetary policy. In the context of ongoing inflationary uncertainty and global economic challenges, any hints of an interest rate increase will be closely watched.

If the data aligns with economists' expectations, it is better to act using the Mean Reversion strategy. If the data significantly exceeds or falls short of economists' expectations, it is best to use the Momentum strategy.

Momentum Strategy (Breakout):

For the EUR/USD Pair:

• Long positions on a breakout above the 1.1745 level may lead to a rise in the euro to around 1.1770 and 1.1815.
• Short positions on a breakout below the 1.1725 level may lead to a decline in the euro to around 1.1701 and 1.1674.

For the GBP/USD Pair:

• Longs on a breakout above the 1.3555 level may lead to a rise in the pound to around 1.3585 and 1.3600.
• Shorts on a breakout below the 1.3528 level may lead to a decline in the pound to around 1.3501 and 1.3480.

For the USD/JPY Pair:

• Longs on a breakout above the 157.70 level may lead to a rise in the dollar to around 157.99 and 157.39.
• Shorts on a breakout below the 157.55 level may lead to a sell-off of the dollar to around 157.00 and 156.66.

Mean Reversion Strategy (Return):

For the EUR/USD Pair:

• I will look for shorts after a failed breakout above 1.1747 when returning below this level.
• I will look for longs after a failed breakout below 1.1724 when returning to this level.

For the GBP/USD Pair:

• I will look for shorts after a failed breakout above 1.3553 when returning below this level.
• I will look for longs after a failed breakout below 1.3517 when returning to this level.

For the AUD/USD Pair:

• I will look for shorts after a failed breakout above 0.7252 when returning below this level.
• I will look for longs after a failed breakout below 0.7229 when returning to this level.

For the USD/CAD Pair:

• I will look for shorts after a failed breakout above 1.3705 when returning below this level.
• I will look for longs after a failed breakout below 1.3678 when returning to this level.

Meanwhile, billionaire investor Ray Dalio explained that Bitcoin is unlikely to be considered a "safe haven." Dalio stated that only gold deserves that title, as Bitcoin cannot claim it due to its high risk, volatility, and lack of privacy. All transactions on the Bitcoin network are recorded on a public blockchain, so anyone can see them at any time. Dalio believes this is precisely why central banks are not eager to establish Bitcoin reserves. Recently, the Swiss central bank rejected a proposal from a group of activists to create Bitcoin reserves, calling Bitcoin too volatile and unstable.

Dalio also noted that Bitcoin closely correlates with technology company stocks. When stocks decline, companies often sell Bitcoin to cover those losses. In his view, gold remains at the center of the financial system because it is widely used and maintains a high level of trust worldwide.

General Picture of BTC/USD on 1D

On the daily timeframe, Bitcoin continues to form a downward trend and a correction against it. The trend structure is identified as downward, and the CHOCH line remains at the level of $97,900. Only above this level can we consider the downward trend to be over. Given no signs of a trend reversal to the upside, we believe the decline will resume sooner or later. On the daily timeframe, the nearest POI area for new sell trades is between $79,500 and $81,100. This area has been tested twice, and the price reaction to it was very weak. Therefore, it is likely that this pattern will be canceled, and Bitcoin will continue to rise towards the next FVG in the area of $84,900 - $88,800. The liquidity pool below the trend line remains the target for the price. A small bullish FVG has also been formed. The reaction to it may signal the continuation of the correction, allowing traders to open small long positions.

General Picture of BTC/USD on 4H

On the 4-hour timeframe, Bitcoin continues its upward movement, which is still a correction. The CHOCH line of the current upward structure is at $74,950; a stabilization below this level will signal a trend break to traders. This could be a very important signal for the market regarding a trend change. The end of the upward trend on the 4-hour timeframe could mark the start of a new wave on the daily timeframe. There are still no fundamental grounds for Bitcoin's long-term strengthening.

Trading Recommendations for BTC/USD:

Bitcoin continues to form a full downward trend and a correction against it. We continue to expect a decline targeting $57,500 (the 61.8% level on the Fibonacci from the three-year upward trend), and there are currently no signs of a trend reversal. The only POI area at this time is the nearest bearish FVG on the daily timeframe, located in the range of $79,300 - $81,200. It has not been completely canceled yet, but it could soon be canceled. In this case, the POI area for sales will be $84,900-$88,800 (the next bearish FVG). The decline targets remain below the $60,000 level. For long positions, the only bullish FVG on the daily timeframe can be used, but it should be remembered that any growth in the cryptocurrency now is inherently a correction.

Explanations for Illustrations:

• CHOCH: Break of the trend structure.
• Liquidity: Stop Loss, pending orders, which market makers use to build their positions.
• FVG: Area of price inefficiency. Price moves through such areas very quickly, indicating a complete absence of one side in the market. Subsequently, the price tends to return and react to such areas while continuing the main trend.
• IFVG: Inverted area of price inefficiency. After a return to such an area, the price does not react but rather impulsively breaks through and then tests from the opposite side.
• OB: Order Block. The candle on which the market maker opened a position to capture liquidity for building a position in the opposite direction.

The euro is trading around 1.1733 within the uptrend channel, above the 4/8 Murray line, and above the 200 EMA, which means it could continue its rise in the coming days if the price rebounds above this zone.

After filling the gap it left at the start of the week, the euro is undergoing a technical correction but appears to be reaching support levels, which favors a recovery for the euro since this zone coincides with the lower band of the trend channel. An imminent technical rebound could occur in the coming hours.

A trend reversal could occur in the euro if the price consolidates below the 200 EMA and below the 4/8 Murray level; it could then initiate a new bearish sequence and reach the 3/8 Murray level around 1.1596.

Given that the euro is within an uptrend channel, the outlook could be positive for the coming days, so we should keep an eye on the 4/8 Murray zone. Above this level, we could buy with targets at 1.1757, 1.1787, and finally at 1.1840 around the 5/8 Murray level.

US inflation data supported the dollar, putting downward pressure on the euro, but we believe it could recover in the coming days, and we could buy above the key level of 1.1718.

Bitcoin is trading around $80,655, rebounding after hitting a low of $79,800. We are seeing the crypto rally, so BTC is likely to continue rising in the coming hours and could reach the 2/8 Murray level around $81,250.

A consolidation above the 21 SMA and above the 2/8 Murray level could support a recovery, and we could expect it to reach $82,911 and potentially even the 7/8 Murray level around $84,375.

A decisive break below the uptrend channel and consolidation below $80,000 could lead to Bitcoin returning to the $77,389 level, which coincides with the 200 EMA; this zone represents strong support.

The outlook could remain bullish for Bitcoin in the coming days if the instrument continues to trade above the 5/8 Murray level, in which case it could reach $81,250 and even $84,375.

A trend reversal could occur in Bitcoin if the price falls below $77,000, in which case we could expect a bearish acceleration toward $75,000 and even down to the psychological level of $70,000.

The Eagle indicator is showing a negative signal for Bitcoin, so we could expect a sharp drop if the price consolidates below $79,500.