The GBP/USD currency pair showed a fairly confident rise during the day on Tuesday, and the most important question for traders now is, "Why did the dollar strengthen a day before the FOMC meeting?" In our view, the answer lies within the question itself. The market anticipates that the FOMC may tweak its monetary policy stance towards a more "hawkish" position. We believe there is no basis for this assumption, and we will detail why in this article. However, it can already be said with a high degree of certainty that we are unlikely to hear any "hawkish" rhetoric, as the market has already priced in this scenario. As a result, the U.S. dollar may appreciate further within the current correction that began on April 17, but it likely won't have enough strength for more than that.

In general, discussing the Federal Reserve's monetary policy realization, it should be understood that it currently depends on two factors: inflation and the labor market. This is neither news nor a secret, as the Federal Reserve has been balancing between these two points for several years. However, the situation was somewhat different earlier. Last year, the American central bank implemented three policy easings to support the labor market. While we cannot say the U.S. labor market has fully recovered, at the last Monetary Committee meeting, Jerome Powell made it clear that inflation is now the top priority.

Seemingly, the Fed should be the most eager to raise the key rate, especially since the consumer price index jumped by 0.9% year-on-year in March alone. However, this is not the case. Jerome Powell clearly outlined the Fed's main goal, but that does not mean the Fed is ready to neglect its other objectives. Let's refer to the Nonfarm Payrolls reports: in January, 160,000 jobs were created; in February, -133,000; and in March, 178,000. On average, about 69,000 jobs are created in the American economy each month in 2026. This is an exceptionally low figure. It is worth noting that a normal figure is 150,000-200,000 jobs per month, and during Joe Biden's term, at least 120,000-150,000 jobs were created each year.

Thus, it is still too early to speak of a recovery in the U.S. labor market, and celebrating this recovery would be premature. The Fed understands this well, and tightening monetary policy will lead to a contraction in the labor market and an economic slowdown. Interestingly, the U.S. economy grew only by 0.5% in the fourth quarter of last year, and no one yet knows what the figure will be for the first quarter of this year. The economy under Trump is growing more slowly than under Joe Biden. Therefore, for the Fed, raising rates would be almost tantamount to self-sabotage, especially given that this will be Jerome Powell's last meeting and his successor, Kevin Warsh, will likely push the Monetary Committee to lower the key rate. Thus, we do not expect a tightening of the Fed's rhetoric, which could support the U.S. currency.

The average volatility of the GBP/USD pair over the last five trading days is 74 pips, which is considered "average." On April 29, we expect movement within the range defined by 1.3436 and 1.3584. The upper linear regression channel is pointing downward, indicating a shift to a downward trend. The CCI indicator has entered the overbought area and formed a "bearish" divergence, which has warned of a downward pullback in advance.

Nearby support levels:

S1 – 1.3489

S2 – 1.3428

S3 – 1.3367

Nearby resistance levels:

R1 – 1.3550

R2 – 1.3611

R3 – 1.3672

Trading Recommendations:

The GBP/USD currency pair continues to recover after two "months of geopolitics." Donald Trump's policies will continue to pressure the U.S. economy, so we do not expect the U.S. currency to grow in 2026. Therefore, long positions with a target of 1.3916 and above remain relevant when the price is above the moving average. If the price is below the moving average, short positions can be considered with targets of 1.3436 and 1.3428 on technical grounds. In recent weeks, the British currency has recovered, and the influence of geopolitical factors on the market is diminishing.

Explanations of Illustrations:

Linear regression channels help to define the current trend. If both are directed in the same way, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted;

Murray levels are target levels for movements and corrections;

Volatility levels (red lines) indicate the probable price channel in which the pair will operate over the next day, based on current volatility readings;

The CCI indicator – its entrance into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction may be approaching.

The EUR/USD currency pair traded relatively weakly on Tuesday, which is not surprising given the complete absence of any news. We are no longer inclined to discuss geopolitical news, as the information space is filled with nothing but rumors, conjectures, personal opinions, and so on. In reality, the situation surrounding Iran has not changed for about two weeks. The Strait of Hormuz remains blocked on both sides and by both parties to the conflict, and oil prices are rising again, as, instead of peace talks, the markets received another setback, with Iran and Washington unable to even agree on a personal meeting. Thus, we will not comment on the barrage of recent news regarding the Iranian-American conflict, as there are simply no updates.

We also do not believe the U.S. dollar has been strengthening recently due to a weakening of market optimism about the conflict in the Middle East. The EUR/USD pair (and GBP/USD as well) had been rising for two weeks straight, reflecting a temporary ceasefire that remains temporary a month later. After that, there was a standard technical correction. Traders began taking profits on purchases formed on expectations of an imminent truce, causing the euro to decline slightly while the dollar rose a bit.

As we have said many times, there's no need to try to explain every 50-pip movement in the pair with fundamental or macroeconomic events. Often, the reason lies in simple supply and demand. Someone opened a large position, and someone closed a large position; this doesn't require geopolitical or fundamental justifications. Currency exists not only for profit-oriented speculation. It is also used as a means of settlement and payment. If a major bank needs a large amount of dollars, it enters the market and buys. Traders see the dollar rising and immediately conclude that "geopolitics is bad, and the market no longer believes in a truce between the U.S. and Iran." They then await further declines in the EUR/USD pair...

This week, three central bank meetings are scheduled; however, unlike many analysts, we believe all three will prove inconsequential. Recent meetings of central banks and important macroeconomic reports have been ignored by the market. Central banks are currently not ready for any changes in monetary policy, as no one understands how events in the Middle East will unfold. In March, inflation worldwide surged due to uniform pricing for fuel, oil, and gas. However, if the conflict is resolved tomorrow, inflation will begin to slow down. If tomorrow Trump orders the bombing of Kharg Island or Iranian power plants, and Yemen blocks the Bab-al-Mandab Strait, the current energy crisis will seem like a "flower." The world will need to start preparing for "fruits." Thus, we do not expect a strong market reaction to the central bank meetings.

The average volatility of the EUR/USD currency pair over the last five trading days as of April 29 is 54 pips, characterized as "average." We expect the pair to trade between 1.1657 and 1.1765 on Wednesday. The upper linear regression channel has turned downward, indicating a shift to a downward trend. However, the upward trend of 2025 could resume. The CCI indicator entered the overbought area and formed a "bearish" divergence, warning of a downward pullback.

Nearby support levels:

S1 – 1.1658

S2 – 1.1597

S3 – 1.1536

Nearby resistance levels:

R1 – 1.1719

R2 – 1.1780

R3 – 1.1841

Trading Recommendations:

The EUR/USD pair maintains an upward trend amid the weakening influence of geopolitics on market sentiment and a decrease in geopolitical tensions. The global fundamental background for the dollar remains extremely negative; therefore, in the long term, we still expect the pair to rise. When the price is below the moving average, short positions can be considered with targets of 1.1658 and 1.1597 on technical grounds. Above the moving average, long positions are relevant with targets of 1.1790 and 1.1841. The market is distancing itself from the geopolitical factor, while the dollar is losing its only growth driver.

Explanations of Illustrations:

Linear regression channels help to define the current trend. If both are directed in the same way, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted;

Murray levels are target levels for movements and corrections;

Volatility levels (red lines) indicate the probable price channel in which the pair will operate over the next day, based on current volatility readings;

The CCI indicator – its entrance into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction may be approaching.

The GBP/USD currency pair attempted once again to breach the support area of 1.3465-1.3480 on Tuesday but was unsuccessful once more. Thus, the sideways channel of 1.3465-1.3588 remains relevant. Additionally, the British pound is positioned above the Ichimoku indicator lines, suggesting it maintains its upward prospects. Therefore, we would only consider a decline below the 1.3465-1.3480 range. The macroeconomic and fundamental backgrounds in both the UK and the US were absent on Tuesday, so we observed purely technical movements throughout the day, and volatility remained low.

On the hourly timeframe, as mentioned, the upward trend is still intact. There is no trend line at present, but there is no need for one right now. The first half of the week is entirely empty of fundamental and macroeconomic events, with only the significant FOMC meeting taking place this evening. Hence, the first half of the week is technical, while the second half is fundamental.

On the 5-minute timeframe, two trading signals were formed on Tuesday. Initially, the pair consolidated below the critical line, then rebounded from the area of 1.3465-1.3480. The first signal was not worth attention, as a strong support area lay just below. However, the second signal could have been executed by traders. It is important to remember that within a range, the Ichimoku indicator lines are less significant, so the boundaries of the sideways channel serve as the primary points of reference. After multiple rebounds from the lower boundary, we should expect a resumption of the upward trend.

COT Report

The COT reports for the British pound indicate that commercial traders' sentiment has been changing consistently in recent years. The red and blue lines, representing the net positions of commercial and non-commercial traders, frequently cross each other and are often near the zero mark. Currently, the lines are diverging from each other, with non-commercial traders still dominating with... sales. Given the events in the Middle East, it is no surprise that the demand for risk currencies is declining while demand for the dollar is rising.

In the long term, the dollar continues to weaken due to Donald Trump's policies, which is evident on the weekly timeframe (illustration above). The trade war will persist in one form or another for a long time, and Trump's policies are aimed both directly and indirectly at weakening the U.S. currency. However, geopolitical factors are currently paramount and have recently provided strong support for the dollar. Given the ongoing conflict in the Middle East, the U.S. dollar may still show growth prospects. According to the latest COT report (dated April 21), the "Non-commercial" group opened 8,100 BUY contracts and 5,500 SELL contracts. Thus, the net position of non-commercial traders increased by 2,600 contracts over the week.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair continues to form an upward trend, which may be reversed if a full-scale war resumes in the Middle East. It should also be noted that the influence of geopolitical factors is weakening, as indicated by movements in recent weeks, although military actions in the region are currently on hold. The Strait of Hormuz remains blocked, with no progress in negotiations, but information suggests that negotiations are still taking place at a distance. This situation supports an upward bias in the British pound.

On April 29, we highlight the following important levels: 1.3096-1.3115, 1.3179-1.3187, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681, 1.3751-1.3763. The Senkou Span B line (1.3487) and Kijun-sen line (1.3511) may also provide signals. It is recommended to set a stop-loss order to breakeven once the price moves in the correct direction by 20 pips. The Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals.

On Wednesday, no significant events are scheduled in the UK, while the U.S. will release a report on durable goods orders, which is likely to be ignored, similar to much of the data released in recent months. In the evening, the FOMC meeting will take place, which is when the main volatility is expected. However, it is important to note that significant decisions and announcements are unlikely, so the market may move very sluggishly even in the evening.

Trading Recommendations:

Today, traders may consider short positions with a target of 1.3369-1.3377 if the price consolidates below the 1.3465-1.3480 range. Long positions remain relevant with a target of 1.3588, as the price bounced from the 1.3465-1.3480 area.

Explanations of Illustrations:

Price levels of support and resistance – thick red lines, around which the movement may end. They are not sources of trading signals.

Kijun-sen and Senkou Span B lines – lines of the Ichimoku indicator that are carried over to the hourly timeframe from the 4-hour one. They are strong lines.

Extreme levels – thin red lines from which the price has previously bounced. They are sources of trading signals.

Yellow lines – trend lines, trend channels, and any other technical patterns.

Indicator 1 on COT charts – the size of the net position of each category of traders.

The EUR/USD currency pair continued to exhibit low volatility throughout the day on Tuesday. The fundamental, macroeconomic, and geopolitical backgrounds were again absent, leaving traders with nothing to react to. The technical picture also showed no significant changes. As a result, the market focused on the upcoming FOMC meeting scheduled for Wednesday evening. It cannot be said that the market began to price in the outcomes of the FOMC meeting (which is already known) in advance, as there is essentially nothing to price in. The only event attracting interest is Jerome Powell's speech, which will be his last as Federal Reserve chair at the April meeting. Despite the apparent busyness of the current week, there may not be a single important event in the first three weeks.

From a technical perspective, the upward trend has been broken, but further dollar growth requires a reason. The geopolitical factor no longer provides the same support for the U.S. currency, the macroeconomic background is being ignored by the market, and fundamental events will occur later this week, while the long-term trend remains upward. Therefore, we believe the probability of a new rise in the pair is higher than the probability of a continuation of the decline. However, now, in order to be confident in such a scenario, breaking through the Ichimoku indicator lines is necessary.

On the 5-minute timeframe on Tuesday, only one sell signal was generated. During the Asian trading session, the pair rebounded from the Kijun-sen line and moved down about 30 pips throughout the day, with volatility again being low, and the nearest target area was not reached. By evening, the price returned to the critical line.

COT Report

The latest COT report is dated April 21. The weekly timeframe illustration clearly shows that the net position of non-commercial traders remains "bullish," but it rapidly declines amid geopolitical events. Traders have been offloading the euro in favor of the U.S. dollar in recent months. Donald Trump's policy has not changed, but for some time now, the dollar has served as a "reserve currency." However, this process may already be behind us.

We still do not see any fundamental factors that would strengthen the euro; however, sufficient factors remain for the American dollar to weaken. The war in the Middle East made the dollar temporarily super-attractive, but when this factor runs out of "shelf life," everything will revert to the way it was. This could have already expired. In the long term, the euro may fall to the level of $1.06 (the trend line), but the upward trend will still remain relevant. Currently, the pair has not moved significantly away from the descending trend line, which has been broken several times.

The positioning of the red and blue lines of the indicator indicates parity between bulls and bears. Over the last reporting week, the number of long positions in the "Non-commercial" group increased by 2,700, while the number of shorts decreased by 12,500. Accordingly, the net position increased by a total of 15,200 contracts over the week.

Analysis of EUR/USD 1H

On the hourly timeframe, the EUR/USD pair has started to form a downward trend. The situation in the Middle East remains tense but is not worsening, so there are currently few strong reasons for the U.S. dollar to strengthen further. There will be enough significant events this week, so good volatility can be expected. Technically, the dollar is in a more favorable position than the euro.

For April 29, we highlight the following levels for trading: 1.1362, 1.1426, 1.1542, 1.1615-1.1625, 1.1657-1.1666, 1.1750-1.1760, 1.1830-1.1837, 1.1907-1.1922, as well as the Senkou Span B line (1.1758) and Kijun-sen (1.1716). The Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals. Remember to set a stop-loss order to break even if the price moves in the right direction by 15 pips. This will protect against potential losses if the signal turns out to be false.

On Wednesday, Germany will publish a fairly important inflation report for April, the U.S. will have several secondary reports, and in the evening, the FOMC meeting and press conference with Jerome Powell will take place. Thus, the main movements are expected in the evening.

Trading Recommendations:

Today, traders can open short positions if the price rebounds from the Kijun-sen line or from the 1.1750-1.1760 area, targeting the 1.1657-1.1666 area. Long positions can be opened upon price consolidation above the 1.1750-1.1760 area, with a target of 1.1830-1.1837.

Explanations of Illustrations:

Price levels of support and resistance – thick red lines, around which the movement may end. They are not sources of trading signals.

Kijun-sen and Senkou Span B lines – lines of the Ichimoku indicator that are carried over to the hourly timeframe from the 4-hour one. They are strong lines.

Extreme levels – thin red lines from which the price has previously bounced. They are sources of trading signals.

Yellow lines – trend lines, trend channels, and any other technical patterns.

Indicator 1 on COT charts – the size of the net position of each category of traders.

Recent economic data does not appear convincing enough for the ECB to ignore it. The April PMIs have deteriorated compared to March, particularly in the services sector. Consumer confidence has declined, and the explosive inflation many feared has not yet materialized.

The situation seems frozen, as the military confrontation between the US and Iran is unfolding in a "neither peace nor war" scenario. The stated willingness to negotiate from both sides is hampered by the desire to uphold their objectives, and there is currently no resolution in sight. For Europe, this situation poses significant threats, not only in terms of inevitable inflation but also due to its enormous dependence on external energy supplies, especially since Europe has voluntarily given up reliable, cheap supplies from Russia, effectively trapping itself.

As hopes for a peace agreement remain, the ECB may afford to pause and adopt a wait-and-see position. The market is optimistic that this pause will not last long; there is over a 50% probability that the ECB will raise rates in June and do so three more times by the end of the year. The situation is too uncertain to take hasty action, but the threats are too great to delay for an extended period. Recently, ECB President Lagarde stated that "the ECB needs additional data before drawing conclusions about policy," while Schnabel indicated that "the ECB can afford time to analyze the shock in Iran."

So, here are the realities. While there are no catastrophic consequences from the war in the Middle East yet, inflation will continue to rise, and real production and consumer demand will decrease. This is a road to recession. For the euro, there might be nothing dangerous here, but the scenario in which capital begins to flee Europe becomes more likely by the day. If the conflict ends quickly, this scenario is less likely to develop; thus, positive news pushes the euro higher. However, each day of delay adds to the unfavorable scenario, increasing long-term threats to the euro, making it unwise, in our view, to bet on its growth.

Speculative positioning in the euro improved by $2.2 billion over the reporting week, but the calculated price has lost its upward momentum and is attempting to reverse downward. There is no clear direction.

Last week, we suggested that the resumption of negotiations between the US and Iran could help the euro rise towards 1.2083, but optimism faded just as quickly. The likelihood of continued growth for EUR/USD is decreasing. The ECB's refusal to raise rates on Thursday will intensify pressure on the euro, making a pullback to support at 1.1620/40 more likely. If negative news increases, then further movement down towards the trendline at 1.1540/60 is also possible.

The Strait of Hormuz remains blocked, negotiations between Iran and the U.S. are "ongoing," and the situation is stagnating where it was a few weeks ago, while the market seems to have lost faith in Tehran and Washington's ability to reach a common understanding. I have repeatedly stated in my reviews that the probability of reaching an agreement is extremely low. There's no need to examine all the points of contention between America and Iran; we should focus solely on one issue: nuclear. Iran has been under sanctions from half the world's countries for 50 years, preventing it from freely selling its oil at market prices and in any volume. This is all because Tehran is not willing to abandon its nuclear developments and weapons. What is the likelihood that Iranian authorities will change their stance in negotiations with Trump?

In my view, it's zero. Moreover, the worst is already behind Iran. It has endured a month of active hostilities, responding blow for blow, showing the world that it is not a "punching bag," and other countries will not dictate how it should live. Currently, Iran holds the world hostage as energy prices have skyrocketed due to the blockade of the Strait of Hormuz, threatening recession and inflation in the global economy. Oil prices will continue to rise the longer the Strait remains closed.

Bloomberg analysts have calculated that oil prices will rise in proportion to the duration of the Hormuz blockade. If the Strait opens in early May, oil prices will remain in the $100-110 per barrel range, which is the most favorable but also the least likely scenario. The continuation of the blockade until early July poses a risk to oil prices reaching $160 per barrel. Bloomberg analysts are optimistic and expect the Strait to open in May. Personally, I am more pessimistic and doubt that the Strait will open even by July.

However, there is a "silver lining." Once the Strait opens, oil prices will steadily decline and could very well return to pre-war levels. Bloomberg analysts expect the average Brent price this year to be $74 per barrel. The only thing left is to lift the double blockade of the Strait.

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument remains in an upward trend (bottom picture) and, in the short term, is in a corrective structure. The corrective wave set appears quite complete and could take on a more complex, extended form only if the geopolitical situation in the Middle East improves. Otherwise, from current positions, a new downward wave set may begin to form. We have seen the corrective wave; from here, everything will depend on market confidence in a successful outcome of negotiations.

Wave Pattern for GBP/USD:

The wave pattern for GBP/USD has, over time, become clearer, as I anticipated. We now see a clear three-wave upward structure in the charts, which may already be complete. If this is indeed the case, we can expect the formation of at least one downward wave (presumably d). The upward segment of the trend could take a five-wave form, but this requires the conflict in the Middle East to subside rather than reignite. Therefore, the baseline scenario for the coming days is a decline to the 34 figure or slightly lower. Again, everything will depend on geopolitical factors.

Main Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often carry changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is no such thing as 100% certainty in the direction of movement, nor can there ever be. Do not forget about protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

Ahead of Jerome Powell's latest meeting at the helm of the Federal Reserve, another significant fact cannot be overlooked. This month, the U.S. Department of Justice closed the case against the Fed president, finding no evidence of wrongdoing in the case regarding budget overruns for the reconstruction of Fed buildings. The Department of Justice spent many months searching for any evidence of Powell's guilt, but ultimately was unsuccessful. It is worth noting that Powell's case was examined not by a court but specifically by the Department of Justice.

Thus, I can state that Powell has achieved a crushing victory over Trump. The U.S. president tried by all means to remove Powell from his position, using methods that no one else would ever consider. From the very beginning, it was clear that the accusations against Powell or Lisa Cook were worth no more than a hill of beans. With the same success, Trump could have accused Fed officials of violating traffic laws and demanded their resignations on that basis.

Last year, I stated that Powell is not a foreman, and all expenditures for the reconstruction of Fed buildings were approved by the U.S. Congress. Therefore, if anyone should be blamed, it should only be the congressmen. However, congressmen are unlikely to admit their guilt, and there is likely no guilt to admit. The budget for repairs has increased, but this is a normal occurrence, as anyone who has ever dealt with repairs knows.

Additionally, the Department of Justice found no evidence of Powell providing false testimony in Congress. In simple terms, Powell did not mislead Congress when discussing the budget increase for the reconstruction. And why would Powell need to do that? If there was indeed "money laundering," the focus should have been on finding the actual funds in Powell's accounts. It is likely that no one found anything because there was no "laundering." Moreover, let me remind you that this is not about Jerome's country villa, but a public institution. Powell requested more funds for the repair of a government building, not personal property. Thus, the question arises again: why would Powell theoretically need to "fraudulently" inflate the budget?

In my view, on Wednesday, Powell will appear as a departing victor. He did not cave to Trump's pressures, demonstrated to all of America that the Fed is independent from political pressure, and set an example for other Fed governors who will remain in their positions after his departure. On Wednesday, the markets will be watching his victory speech.

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument remains in an upward trend (bottom picture) and, in the short term, is in a corrective structure. The corrective wave set appears quite complete and could take on a more complex, extended form only if the geopolitical situation in the Middle East improves. Otherwise, from current positions, a new downward wave set may begin to form. We have seen the corrective wave; from here, everything will depend on market confidence in a successful outcome of negotiations.

Wave Pattern for GBP/USD:

The wave pattern for GBP/USD has, over time, become clearer, as I anticipated. We now see a clear three-wave upward structure in the charts, which may already be complete. If this is indeed the case, we can expect the formation of at least one downward wave (presumably d). The upward segment of the trend could take a five-wave form, but this requires the conflict in the Middle East to subside rather than reignite. Therefore, the baseline scenario for the coming days is a decline to the 34 figure or slightly lower. Again, everything will depend on geopolitical factors.

Main Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often carry changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is no such thing as 100% certainty in the direction of movement, nor can there ever be. Do not forget about protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

Following the April meeting, the BoJ maintained the short-term interest rate at 0.75%, implementing the basic, most anticipated scenario. However, the vote on the rate demonstrated a significant shift in sentiment within the bank's leadership. Board members Nakagawa, Takata, and Tamura voted for an immediate 25-basis-point rate hike to 1.0%. They argued that the risks of inflation are significantly tilted to the upside and that the target of 2% has been effectively achieved on a sustainable basis.It should be noted that at the previous (March) meeting, the decision to maintain the status quo was also not unanimous. However, only one board member (Hajime Takada) voted for a rate hike then, arguing that preemptive action was needed to avoid an uncontrollable wage-price spiral.

As we see, in April, the "hawkish wing" has added two more members to its ranks. Now, three of the nine members of the Policy Board advocate an immediate tightening of monetary policy parameters. This is no longer a "lonely protest" but an increase in the hawkish camp. The market observed a stable core forming among the bank's leadership, ready for decisive action, and responded accordingly by increasing demand for the yen.

Additionally, the BoJ significantly raised its forecast for core inflation for the current financial year to 2.8%, from the previous (January) value of 1.9%. This decision was also interpreted by the market in a hawkish context; as such, a substantial revision (nearly 1 percentage point) reflects the central bank's concerns about the sustainability of price pressures.

This is why, after the meeting's results were announced and the accompanying statement was published, the yen received short-term support: the unexpected results of the voting on the rate and the revision of inflation forecasts heightened the market's hawkish expectations. Traders began pricing in a rate hike at the next meeting, and the USD/JPY pair hit a weekly low.

However, the "bearish banquet" did not last long. A few hours after the formal results were announced, the press conference by Bank Governor Kazuo Ueda disappointed USD/JPY sellers.

First, Ueda linked the ongoing Middle Eastern conflict (which has entered a prolonged phase) to the prospects for further tightening of monetary policy parameters. According to him, the likelihood of realizing the central bank's base forecast has significantly decreased, primarily due to the escalation of the situation in the Middle East. Market participants interpreted these words as a signal that even with high inflation, the central bank would maintain a wait-and-see position if geopolitics were to hinder the global (and Japanese) economy.

Second, the central bank's head stated directly that he "does not see an immediate need for a rate hike right now." He noted that the bank needs more time to assess how high energy prices will impact domestic consumption in Japan. Such a soft statement contrasted with the positions of the aforementioned dissenters, who demanded an immediate 25-basis-point rate increase. Nevertheless, the fact remains: a stable majority on the Policy Board currently stands with the cautious Ueda.

Additionally, the head of the BoJ commented on the oil market, stating that rising oil prices have a dual effect and are, in essence, a double-edged sword. On the one hand, the rising cost of crude oil pushes inflation higher; on the other, expensive oil acts as a "tax on consumption," reducing real household incomes and corporate profits. Ueda also indicated that a premature rate hike against a backdrop of weak GDP (the 2026 forecast was lowered to 0.5%) could push the economy into recession. Thus, the sharp yen fluctuations are driven by conflicting signals from the BoJ. On the one hand, there is the strengthening of the hawkish wing of the central bank; on the other, there are the cautious comments from Kazuo Ueda.

But can we trust the current rise of USD/JPY? In my opinion, no. Firstly, the head of the Japanese central bank did not announce anything fundamentally new. His words merely contrasted with the strengthening hawkish sentiment within the Policy Board. Secondly, the USD/JPY pair is once again approaching the key resistance level of 160.00 (the upper line of the Bollinger Bands on the daily chart). This is not just a technical level; it serves as a sort of "red line" for Japanese authorities—overcoming this mark could trigger currency intervention or corresponding verbal signals.

Therefore, price spikes in USD/JPY towards the boundaries of the 160 figure should be viewed as an opportunity to open short positions, with an initial target of 159.50 (the middle line of the Bollinger Bands on H4) and a primary target of 159.10 (the lower line of the Bollinger Bands on the D1 timeframe).

As indicated by the PMI reports, the sub-indices for prices increased significantly across both sectors, particularly for raw materials and inputs, while the finished goods price index reached 62, a record since 2023. Core inflation has slightly decreased; however, the overall index rose from 3.0% to 3.3% year-on-year, as did the retail price index.

The Bank of England, like the European Central Bank, will hold its next meeting on Thursday, April 30. After the BoE raised rates in March, investors anticipated that rates would continue to rise quickly, as the war in the Gulf triggered a surge in inflation. However, sentiments have noticeably shifted over the past couple of weeks. The Governor of the BoE, Bailey, hinted in an interview last week that there is no rush, and the market is already pricing in an unchanged rate. Likely, similar to the ECB, the BoE does not want to take hasty steps while the situation allows, as a preemptive rate hike due to rising inflation could prove premature if the war in the Gulf ends with a peace agreement and the Strait of Hormuz reopens to shipping. In this case, oil prices would decline, and the threat of rising inflation would diminish, requiring the BoE to adjust monetary policy again, but this time downwards. While the situation permits, it makes sense to wait; this position appears balanced.

The net short position on GBP has slightly decreased over the reporting week to -£4.4 billion, with the calculated price losing its upward momentum and actively trading below the long-term average.

As we expected in the previous review, the pound spent the week in a sideways range, as bullish momentum was exhausted and uncertainty remained too high. Currently, the likelihood of a downward movement has increased, with a probable decline towards technical support at 1.3375. If negotiations in Islamabad do not resume and the parties continue to exchange belligerent statements, bearish pressure will intensify, potentially leading to a move towards the broad support zone at 1.3120/60.

The wave pattern on the 4-hour chart for EUR/USD has changed. There is still no indication of a cancellation of the upward trend segment (lower chart), which began in January of last year; however, the wave structure now appears highly ambiguous. In such situations, I recommend switching to a lower timeframe (upper chart) and focusing on the simplest and smallest wave structures to form a short-term forecast, which is sufficient for opening positions. Wave structures can be highly complex and allow for multiple scenarios. The simplest approach is to trade based on the standard "five-three" pattern.

In the chart above, a classic five-wave impulsive structure with an extended third wave can be identified. If this is correct, then this structure has been completed, and a corrective sequence of at least three waves is currently developing. Three waves have already formed, so the market is likely to develop at least one more corrective wave in the near term. Future developments will depend on geopolitics: either a more complex corrective structure will form, or a new downward trend segment will begin.

The EUR/USD pair declined by about 20 points on Tuesday, and market volatility remains relatively low. At this stage, it can be assumed that the upward corrective wave structure may transform into an impulsive one, although this conclusion is based primarily on the weak decline observed over the past two weeks. It should be noted that impulsive movements are typically sharper than corrective ones. Are there grounds to expect euro growth under the current news background?

In my view, there are. The geopolitical factor is gradually losing its influence on the market, as its primary impact was on the US dollar, which investors used as a safe-haven currency. However, most analysts have noted that risk-off flows cannot persist indefinitely. At this point, it can be assumed that investors have already reduced exposure related to the Middle East. Tomorrow, the Federal Reserve will hold a meeting, where monetary policy parameters are expected to remain unchanged with near certainty. Therefore, the main focus will be on Jerome Powell's speech, which will be his final meeting as Fed Chair.

What can Jerome Powell signal? It is highly likely that during his final speech, Powell will avoid introducing uncertainty or increasing market tension. In two weeks, Kevin Warsh is expected to take over as Fed Chair, and he will likely have his own economic perspective and monetary policy approach. Therefore, Powell is unlikely to signal any shift in the current policy stance, which assumes that the interest rate remains at least through the end of the year ? implies keeping interest rates unchanged at least through the end of the year. As a result, the US dollar may lack strong support following the meeting, as the Fed's stance is unlikely to become more hawkish.

General conclusions

Based on the EUR/USD analysis, the pair remains within an upward trend segment (lower chart), while in the short term it is within a corrective structure. The corrective wave structure appears largely complete and may only become more complex and extended if the geopolitical situation in the Middle East improves. Otherwise, a new downward wave structure may begin from current levels. A corrective phase has already formed, and further direction will depend on market expectations regarding the outcome of negotiations.

On the lower timeframe, the entire upward trend segment is visible. The wave structure is not entirely typical, as corrective waves differ in size. For example, the higher-degree wave 2 is smaller than the internal wave 2 within wave 3. However, such cases do occur. It is important to focus on clear and identifiable structures rather than strictly labeling every wave. Recent waves are difficult to interpret, so the analysis is based on the higher timeframe.

Key principles of this analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often subject to change.
2. If there is no confidence in market conditions, it is better to stay out.
3. Absolute certainty in market direction does not exist. Always use Stop Loss orders.
4. Wave analysis can be combined with other analytical methods and trading strategies.

In the current situation, traders can only wait for the reaction at imbalance 13. There are no other clear buying zones at the moment, and the trend remains bullish. Thus, only buy signals are of interest. There are no bearish patterns at present. The previous buy signal from imbalance 12 worked well, with the euro gaining approximately 270 points. These positions could have been closed with solid profits. There are currently no grounds for selling.

It should also be noted that the entire strengthening of the US dollar over the past one and a half to two months has been driven solely by geopolitics. As soon as the United States and Iran agreed on a ceasefire, bearish pressure eased, and bulls resumed buying activity. At present, the truce remains fragile but intact. I have repeatedly stated that I do not expect the bullish trend to end, despite the break of key structural lows. The price movement over the past two months could develop into a bearish trend only if geopolitical tensions continue to escalate. However, markets often price in the most pessimistic scenario in advance, attempting to anticipate the most extreme outcomes. Therefore, it is possible that traders have already fully priced in the geopolitical conflict in the Middle East. In this case, bears no longer hold an advantage.

The overall technical picture is clear. First, the price showed no reaction to imbalance 11. Second, the price reacted to imbalance 12, forming a bullish signal within a bullish trend. Third, a new bullish imbalance 13 has been formed, which represents a key zone of interest for future buy positions and also serves as a support zone for the euro.

The news background on Tuesday was essentially absent, apart from the ADP report, which rarely attracts strong market attention even in its monthly release. A speech by Christine Lagarde is also scheduled today, but the market has already shifted its focus to the Federal Reserve and is closely monitoring oil prices, which have started to rise again.

There remain many reasons for bullish activity in 2026, and even the escalation of the Middle East conflict has not reduced them. Structurally and globally, Trump's policies, which led to a significant weakening of the US dollar last year, have not changed. In the coming months, the US dollar may periodically strengthen due to risk-off sentiment, but this factor requires ongoing escalation in the Middle East. I still do not expect a sustained bearish trend. The US dollar has received temporary support, but it is unclear what could drive sustained bearish momentum in the long term.

News calendar for the US and the Eurozone:

• Germany – Consumer Price Index (12:00 UTC).
• US – Building Permits (12:30 UTC).
• US – Durable Goods Orders (12:30 UTC).
• US – New Home Sales (12:30 UTC).
• US – FOMC Interest Rate Decision (18:00 UTC).
• US – Press Conference with Jerome Powell (18:30 UTC).

On April 29, the economic calendar contains several entries, with the Federal Reserve meeting being the key event. The impact of the news background on market sentiment on Wednesday may be significant, particularly in the second half of the day.

EUR/USD forecast and trading tips:

In my view, the pair remains in the process of forming a bullish trend. The fundamental background shifted sharply two months ago, but the trend cannot be considered invalidated or completed. Therefore, bulls may continue their advance in the near term unless geopolitical conditions shift toward renewed escalation.

Bullish traders had the opportunity to open buy positions based on the signal from imbalance 12, and the upward movement may continue toward the yearly highs. A new imbalance 13 has also been formed, which may generate another bullish signal in the near future. For uninterrupted euro growth, the Middle East conflict would need to move toward a stable resolution, which is not currently the case. However, there are also no increasing reasons for bearish pressure. In the near term, I would rely primarily on technical analysis, which indicates bullish dominance.

Bitcoin is trading around $76,224, breaking the uptrend channel that had been forming since early March. It is now entering a bearish phase, although we could see some consolidation around this level in the coming days.

If Bitcoin continues to fall, it is expected to reach the target and the pivot point ahead of Murray's 4/8 around $75,000.

A technical bounce above $75,000 could be positive for buying targets at the 21 SMA around $77,550 or around $78,125, located at Murray's 5/8.

If bearish momentum prevails, we could expect Bitcoin to reach the 200 EMA around $73,930 and eventually reach Murray's 3/8 level around $71,875.

A decisive breakout and consolidation above the 21 SMA could resume Bitcoin's bullish cycle, but we must be cautious as the Eagle indicator is showing a negative signal.

Given that Bitcoin is overbought on the daily chart, we could look for opportunities to sell below $77,500 or below $78,000 with a target at the psychological level of $70,000.

Gold is trading around $4,568, undergoing a sharp technical correction after consolidating for about seven days around the $4,700 level. Gold is expected to continue falling in the coming days until it reaches the 200-day EMA around $4,447 or the 61.8% Fibonacci retracement level at $4,300.

Gold has reached the key support level from March 27. If it consolidates above $4,650 in the coming hours, we could expect a recovery toward the 21 SMA at $4,734.

Given that gold is under bearish pressure, a pullback toward the 38.2% or 23.6% Fibonacci retracement levels could be considered a signal to continue selling in the coming days.

The daily gold chart shows bearish potential, and any technical rebound in the coming days could be viewed as an opportunity to sell until the 6/8 Murray target is reached, around $4,375.

According to the daily chart, gold has reached the lower band of the downtrend channel; if this support holds, we could expect a technical rebound toward the upper band of the trend channel around $4,645.

If this key support level proves to be strong, we could look for opportunities to buy gold above $4,550, with targets at 4,600 and 4,645, before the main downtrend resumes.

A decisive break above the 23.6% Fibonacci level and above the 21-day SMA could mark the start of a gold rally, and we could expect it to return to the $4,800 level; it could even reach the 8/8 Murray level around $5,000.

The euro is trading around 1.1687, reaching the 200-day EMA and consolidating above this level after testing strong support. The euro could continue its fall in the coming hours, but we should watch for a drop below 1.1679, at which point we could sell.

If the euro rebounds above the 200 EMA in the coming hours, we could look to buy at the 4/8 Murray level around 1.1718 or near the top of the downtrend channel around 1.1730.

If the euro remains under downward pressure and consolidates below 1.1679, we could expect a strong technical correction, potentially reaching the 3/8 Murray level around 1.1506. EUR/USD could even continue its downward cycle until reaching the psychological level of 1.15.

Given that the indicator is reaching oversold levels, the euro will likely continue its rise from current price levels. Therefore, if EUR/USD consolidates above the 200 EMA, this could be considered a positive signal to buy.

A consolidation and a breakout above the downtrend channel and above 1.1820 could mark the start of the euro's recovery. As a result, EUR/USD could reach the 5/8 Murray level again around 1.1840.

After consolidating above $93 since the start of the week around the 50% Fibonacci level, USD/OIL is gaining strong momentum, reaching the $99.48 per barrel area during the early hours of the European session.

The technical chart shows a correction below $100 toward $96.50, around the 61.8% Fibonacci level. We also see a technical rebound, but crude oil may already be struggling to continue rising, so it would be a good idea to sell.

If crude oil reaches the strong resistance at $100 around the 8/8 Murray line and encounters strong rejection in the coming hours, this could be seen as a signal to open short positions with targets at the 61.8% Fibonacci level around $96.50 and at the 21 SMA around $94.59.

On the H4 chart, we can see the Fibonacci retracement line, which crude oil surpassed at the 61.8% level during the Asian session as it approached $100. If crude oil consolidates below the 61.8% Fibonacci level, this could be seen as a clear signal to sell in the coming days.

The Eagle indicator is giving a negative signal, so we can sell around $99.50 or below this zone with targets at $96 and finally at the 21 SMA.

Crude oil left a gap on April 17, and this gap could be filled if crude oil falls below $95 and breaks decisively out of the uptrend channel; in that case, it could reach the 200-day EMA around $90 and eventually reach $83.

The US equity market again showed strength: the S&P 500 and the Nasdaq 100 closed at fresh record highs. The primary catalyst for optimism was the resumption of shipping through the Strait of Hormuz, which immediately eased pressure on the energy sector and pushed oil prices lower. Investors interpreted the de-escalation at this key transit node as a reduction in global risk, allowing capital to flow back into riskier assets — above all, technology stocks.

Although trading closed mixed overall, the prevailing sentiment remains distinctly bullish. Lower logistics and energy costs create a supportive backdrop for corporate margins in the coming quarter. Given these significant moves, we recommend traders use InstaForex tools to trade these assets and not miss the volatility pulse as global highs are reset. Follow the link for more details.

Correspondents' dinner shooting adds to political tensions

The shooting at the annual White House Correspondents' Association Dinner has become a focal point of Washington political life and prompted an immediate reaction from Donald Trump. The president used the incident to advance a law-and-order narrative and project personal resolve — a message that could resonate with conservative voters in an election cycle. At the same time, stepped-up security measures by law enforcement agencies signal deep domestic tensions.

For financial markets, such incidents matter less for their immediate facts than as indicators of socio-political stability in the world's largest economy. A rise in domestic uncertainty in the United States often translates into short-term moves in the dollar and Treasury yields. Analysts are watching closely how the episode will affect candidate ratings, since any shift in political direction could prompt a reassessment of tax and trade policies. Follow the link for more details.

AI vs geopolitics: risks of bubble forming in S&P 500

Despite smoldering conflicts in the Middle East, the S&P 500 continues to climb confidently, shrugging off traditional safe-haven scenarios. The primary fuel for the rally remains the AI sector, where investor expectations often outpace actual financial results. Experts are increasingly discussing the risk of a tech bubble as capital concentration in a handful of giants has reached critical levels, leaving the broader market vulnerable to any disappointing corporate reports.

Near-term index performance will depend on companies' ability to validate high valuations with real earnings. Any earnings disappointment could trigger a chain reaction and a broad correction. That said, current optimism is so strong that even modestly positive news is treated as a buy signal, and InstaForex's trading tools allow market participants to rapidly adjust portfolios to shifting market cycles. Follow the link for more details.

Bitcoin nears $80,000: aggressive short covering pushes crypto higher

Since early April, the flagship cryptocurrency has delivered impressive double-digit percentage gains. Bitcoin has approached the psychologically important $80,000 level, supported by a strong inflow of institutional capital and widespread short covering. A short squeeze in the futures market has created a self-reinforcing rally, where forced long positions by sellers accelerate the price move.

However, experts warn of caution at current levels. Despite the euphoria, the prospect of profit-taking by large holders looms and could trigger sharp corrections. Technically, the market looks overheated, and for Bitcoin to sustain levels above current highs, it will need a new fundamental catalyst to support demand at extreme prices. Follow the link for more details.

Iran and European inflation: Trump turns up the heat on energy

Donald Trump rejected Iran's proposal to reopen the Strait of Hormuz as "insufficient," instantly cooling market hopes for a rapid normalization of oil supplies. Washington's hardline rhetoric means the geopolitical risk premium on the barrel could persist longer than expected. This threatens the eurozone economy, which is highly sensitive to imported energy costs and is already showing signs of stagnation.

High oil prices feed European inflation and constrain the ECB's room to ease policy. If commodity costs keep rising, consumer activity in the EU could fall materially, prompting downward revisions to GDP forecasts. Traders are closely watching EUR/USD, as the divergence in energy security between the US and Europe becomes a key source of pressure on the single currency. Follow the link for more details.

Trading floors in recent days have been sensitive to the worsening geopolitical agenda and to rate expectations. On Tuesday, gold posted its biggest drop in three weeks. High oil prices are adding pressure: the market is pricing in higher inflation and reassessing how the Middle East conflict might affect monetary policy.

At 07:46 GMT, the spot price of gold was down 1.1% at $4,628 per ounce — the lowest level since April 7. US June gold futures also fell 1.1% to $4,642.90.

This is an important signal for traders: gold normally benefits from a rising geopolitical premium and a weak dollar, but this time forces linked to the prospect of unchanged or tighter rates outweigh those supports.

President Trump and his national security advisers did not back an Iranian proposal related to reopening the Strait of Hormuz. According to the Wall Street Journal, the initiative could have delayed talks on Iran's nuclear program, but the White House rejected it. A response is expected soon.

What was the proposal? Axios previously reported that Iran was prepared to reopen the Strait of Hormuz, provided Washington lifted the blockade on ships bound for and from Iranian ports. Due to the conflict, daily transit through this strategically vital route has fallen to near zero, hitting flows of crude oil, natural gas and refined products — and helping to push oil prices higher on Tuesday.

Mark Loeffert, a trader at Heraeus Precious Metals, wrote in a research note that an open-ended extension of the ceasefire while the Hormuz blockade remains in place "increases uncertainty in the market." His scenario suggests that a mix of economic stagnation and rising prices could, over time, create conditions for a long-term gold rally.

At the same time, the current dynamics show the opposite side: geopolitical tension has raised energy supply risks, boosting inflationary fears and increasing the likelihood that central banks will keep rates unchanged or even hike. As a result, non-yielding assets suffer — gold has lost about 12% since the conflict began in late February.

Edward Meir of Marex noted: "If an agreement — or even an interim deal — is struck between the US and Iran, the dollar would likely weaken, which could support gold."

On the other hand, rising oil prices can accelerate inflation by raising transport and production costs, thereby increasing the chance of higher interest rates. Although gold is often seen as an inflation hedge, higher rates make yield-bearing alternatives more attractive and reduce demand for the non-yielding metal.

This week, the key driver will be central bank decisions. Market participants expect the Fed to leave rates unchanged on Wednesday after its two-day meeting.

Additional attention is focused on other central banks:

1. The Bank of Japan on Tuesday left its policy rate unchanged at 0.75%, but dissenting votes signal a high probability of a rate hike in June and reflect concern about inflationary pressure from the Middle East conflict.
2. Decisions from the European Central Bank, the Bank of England and the Bank of Canada are also awaited.

For traders, the outcome is a mix of two opposing forces: geopolitical risk and potential dollar weakness may support gold over the medium term, but in the short term, inflation and rate expectations dominate and make non-yielding metals less attractive.

See also: InstaForex trading indicators for WTI (CL)

Global oil prices continued to rise for a second session in a row, and have settled near multi-month highs. In the early hours of the European session on Tuesday, futures for West Texas Intermediate (WTI) traded around $99.00–$100.00 per barrel, while benchmark Brent exceeded $104.00. The main reason for the rally is the ongoing blockade of the Strait of Hormuz, which has cut access to the global market by roughly 14 million barrels per day, and the complete absence of progress in peace talks between the US and Iran.

Fundamental backdrop: physical shortage replaces hopes

Last week's optimism about a swift diplomatic resolution has evaporated. Over the weekend, US President Donald Trump cancelled a planned trip by his envoys to Pakistan, saying that Tehran's new proposal, although "better" than the previous one, was still "not good enough."

The White House confirmed it had discussed Iranian initiatives, but showed no readiness to accept them. Iran, in turn, conditions talks on the prior lifting of the maritime blockade, which makes the resumption of meaningful dialogue in the near term unlikely. For traders, the decisive factor is not rhetoric, but the physical flow of oil, and that flow remains severely constrained, say oil market analysts.

Ship-tracking data and expert estimates indicate that since the start of the conflict, roughly 850 million barrels of oil have effectively disappeared from the market. Up to 14 million barrels per day are not passing through the strait, even though minimal traffic continued after the blockade began.

New developments worsen the picture: six Iranian tankers were forced to turn back because of the US blockade, and only a handful of vessels, such as a UAE LNG tanker, have been able to transit. It has also emerged that Israel has expanded its strike zone over Lebanon, adding the risk of the conflict spreading to new regions.

This has changed experts' expectations: hopes for a restoration of supplies in April were not realized, and the likely reopening of the strait has been pushed out to May–June, with volumes expected to recover slowly. Moreover, low inventory levels and the need to replenish strategic stocks will keep prices elevated for a long time, even after shipping is unblocked.

The physical blockade has forced major investment banks to substantially revise their price forecasts upwards.

New oil forecasts (quarterly, selected banks)

As the table shows, even in base scenarios banks expect Brent to remain well above $100 in the short term.

Citi, for example, outlines a "super-bullish" scenario with Brent at $150 if the strait stays closed until the end of June, mirroring peaks seen in past energy crises. At the same time, Citi analysts note that the current rally has been relatively restrained: prices have not surged as much as some expected, because the market spent too long hoping for a quick diplomatic solution. However, once the physical shortage becomes obvious, the correction could be rapid.

Brief technical analysis

Technically, WTI confirms a strong upward impulse that began two weeks ago.

Price has firmly closed above the 50-period EMA on the 1-hour, 4-hour and daily charts (96.54, 94.63, 89.40 respectively), which is an early sign that the bulls have taken short-term control.

The 14-day RSI ranges between 55–58, indicating sustained upward momentum without signs of overbought conditions. This leaves room for further gains.

A break above the round level of 100.00 would likely open the door to new highs.

In short, the path of least resistance is up. Any local pullbacks will be treated by the market as buying opportunities ahead of the next leg higher.

Key events

- 29 April: US Congressional vote on the "War Powers Resolution" — could limit or expand the administration's authorities in the conflict with Iran, triggering volatility.

- 29–30 April: meetings of the Fed, ECB and Bank of England — rate decisions will affect the dollar and global energy demand outlook.

- This week: weekly API and EIA inventory reports — further US stock draws are expected, supporting prices.

Conclusion

The oil market has switched from hopes for a ceasefire to a regime of real physical shortage. The diplomatic process is frozen, and economists now expect normal flows through the Strait of Hormuz to resume no earlier than late May, and possibly later.

A technical break of the local resistance zone 100.00–100.40 would be a powerful signal for the rally to continue, opening the way to the $105.00–$110.00 range and beyond.

At the same time, the Suez Canal, the Bab-el-Mandeb strait and other routes remain vulnerable. If the conflict spreads to major Saudi shipping lanes, we could see prices exceed historic records. For now, the path of least resistance for WTI points above $100.00.

According to reports, the package proposed by the European Commission last year, totaling €1.8 trillion, threatens to reignite long-running disputes over spending priorities and who should pay. Historically, the burden has fallen largely on Germany, but these are clearly not the times to load another round of spending onto that country's shoulders.

Ahead of discussions held last week in Cyprus, wealthier EU member states, which are net contributors to the budget, renewed criticism of the proposed size. This budget will govern EU spending from 2028 through 2034. Donor countries voiced concerns about excessive spending and demanded firmer justification of planned outlays.

The Cyprus talks only highlighted deep divisions among member states about the bloc's fiscal future. On one side, the European Commission insists on substantial investment to tackle urgent challenges such as climate change, digital transformation, and security. On the other side, several of the bloc's most advanced economies express worry about the overall rise in spending and insist on tighter controls over financial flows.

The central sticking point remains the allocation of fiscal responsibility. Historically, Germany and other large eurozone economies have acted as the principal sponsors, but current economic realities and the need to support new priorities demand a fairer, more balanced approach. This is forcing a search for new financing models and a reassessment of established practices in order to ensure the EU's sustainability and development.

European officials also criticized the Commission's proposal to remove rebates granted to wealthier countries, such as Germany, the Netherlands, Sweden, Denmark, and Austria.

Another contentious proposal is to raise revenue via EU-level levies to help pay down bonds issued during the post-COVID recovery. French President Emmanuel Macron has argued that the EU debt accumulated during the COVID period should be refinanced and that the bloc should issue new debt — a position unacceptable to countries like Germany.

The Commission is also trying to reengineer the EU budget around priorities such as defense and boosting competitiveness. Given the persistent investment gap between the EU and the US, aligning the new program with the needs of the 21st century will likely be a core priority for the bloc.

Technical picture, EUR/USD

Regarding the current technical picture for EUR/USD, buyers should now consider how to take the 1.1730 level. Only this will allow a test of 1.1762. From there, a move to 1.1791 would be possible, but achieving that without support from major players will be rather difficult. The most distant target is the high at 1.1822. In the event of a decline only to around 1.1700, I expect serious action from large buyers. If there is no one there, it would be prudent to wait for a refresh of the low at 1.1670 or to open long positions from 1.1640.

Technical picture, GBP/USD

As for the current technical picture for GBP/USD, pound buyers need to take the nearest resistance at 1.3530. Only this will allow targeting 1.3550, above which a break will be rather difficult. The most distant target is the 1.3585 area. In the event of a decline, bears will try to seize control at 1.3500. If they succeed, a break of the range will deal a serious blow to bulls' positions and push GBP/USD toward the low at 1.3475, with the prospect of reaching 1.3445.

In the monthly consumer survey, conducted by the European Central Bank, and published today, respondents reported a marked increase in inflation expectations. According to the data, consumers expect prices to rise by 4% over the next 12 months, a sizeable jump from February, when such expectations were only 2.5%. This surge reflects growing consumer concern about the future cost of goods and services.

Expectations over the next three years also show a worrying upward trend, reaching 3.0%, up from 2.5% in the previous survey. That reading is only slightly below the 3.1% peak recorded in October 2022, when inflationary pressure last hit a high. The five-year outlook also ticked up, from 2.3% to 2.4%. These figures indicate that consumers anticipate elevated inflation persisting into the medium and longer term.

Rising inflation expectations can materially affect consumer behavior and central bank decisions. For households, this may mean reduced purchasing power and a change in spending patterns. Persistent increases in inflation expectations are one of the key indicators the ECB monitors when shaping policy.

At present, the ECB is watching closely whether higher energy prices will prompt workers to demand higher wages. Secondary inflation effects, extending beyond fuel and energy, could trigger interest rate increases, although no policy changes are expected at the upcoming monetary policy meeting on Thursday.

Traders are currently pricing in two quarter-point rate hikes this year, starting in June, with an 80% probability of a third. Clearly, much depends on the duration of the Middle East conflict, since talks have not yet produced a durable solution. The longer the conflict continues, the greater the damage it will inflict. Whereas a few months ago commentators spoke of a possible temporary rise in prices, today discussion has turned to potential ECB intervention. We are likely to learn more at the central bank's meeting this Thursday.

The ECB survey also shows a deterioration in consumer economic expectations. Respondents now expect GDP to contract by 2.1% over the next 12 months, compared with an expected 0.9% contraction in February. Expectations for the unemployment rate in a year's time rose to 11.3% from 10.8%.

Technical picture for EUR/USD

Regarding the current technical picture for EUR/USD, buyers should now consider how to take the 1.1730 level. Only this will allow a test of 1.1762. From there, a move to 1.1791 would be possible, but achieving that without support from major players will be rather difficult. The most distant target is the high at 1.1822. In the event of a decline only to around 1.1700, I expect serious action from large buyers. If there is no one there, it would be prudent to wait for a refresh of the low at 1.1670, or to open long positions from 1.1640.

European equities began 2026 on a positive note. Low valuations, prospects for an acceleration in eurozone growth, uncertainty around Donald Trump's policies, and a sell?off in AI stocks in the US gave Europe a favorable relative story versus American indices.

Performance of US and European equity indices

The Middle East conflict flipped that script. Instead of accelerating, the European economy now appears to be fighting for survival. Risks of a repeat of the energy shock from four years ago are looming. The longer the Strait of Hormuz remains blocked, the greater those risks — and US and Iranian proposals for reopening the key oil artery remain mutually unacceptable.

Futures markets still anticipate two ECB tightening moves in 2026, with a non-zero chance of a third. Those odds are supported by the rise in consumer inflation expectations in the eurozone over the next 12 months (from 2.5% to 4%), over three years (from 2.5% to 3%), and over five years (from 2.3% to 2.4%).

Dynamics of eurozone inflation expectations

Bloomberg consensus sees only one ECB deposit-rate hike in 2026 — in June — and expects the rate to return toward 2% next year as the bloc's economy slows. If the futures market is wrong, German yields could fall, and their appeal would decline, triggering capital flows from Europe to the US and putting downward pressure on EUR/USD.

So a weak economy must eventually show up in the currency. That said, investors currently hope for a quick end to the Middle East conflict and have been willing to sell the US dollar as a safe haven while US equity indices continue to hit record highs. Those forces have so far limited EUR/USD's decline.

Conversely, a prolonged closure of the Strait of Hormuz would likely push oil even higher. In that scenario, currencies of net energy exporters typically gain — and the US dollar would be no exception.

Technically, EUR/USD failed to test resistance at the green moving average on the daily chart and returned to fair value around 1.169. A decisive break below that level would increase the odds of further downside and justify initiating short positions in the euro against the US dollar.

The test of the 159.28 level occurred when the MACD indicator had just started moving upward from the zero line, confirming a valid entry point for buying the US dollar. As a result, the pair rose toward the target level of 159.62.

The further trajectory of USD/JPY will be determined by developments in the Middle East, as well as the release of US data on consumer sentiment and housing price dynamics. Tensions in the Middle East region traditionally support the US dollar, which often acts as a "safe haven" during periods of global instability. Any escalation or, conversely, easing of the conflict will remain under close market attention and may significantly influence the movement of major dollar currency pairs. Equally important will be the upcoming economic reports. The consumer confidence indicator, reflecting US household sentiment, is a key measure of economic conditions. The housing price index will provide valuable information about the US real estate market—one of the key sectors of the US economy. The combined analysis of these geopolitical and macroeconomic factors will determine the pair's future direction.

As for the intraday strategy, I will primarily rely on Scenario #1 and Scenario #2.

Buy signal

Scenario #1: Today I plan to buy USD/JPY at the entry point around 159.65 (green line on the chart), with a target at 160.05 (thicker green line on the chart). At 160.05, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move back from the level). A rise in the pair today is possible in the case of a firm stance by the US and Iran. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of 159.49 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 159.65 and 160.05 can be expected.

Sell signal

Scenario #1: I plan to sell USD/JPY after a break below the 159.49 level (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 159.20, where I will exit short positions and immediately open buy positions in the opposite direction (expecting a 20–25 point move back). Pressure on the pair today may return in the case of positive news from the Middle East. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started declining from it.

Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of 159.65 when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 159.49 and 159.20 can be expected.

On the chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated level to place Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – estimated level to place Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important. Beginner Forex traders should make 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 quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

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

The test of the 1.3508 level occurred when the MACD indicator had just started moving downward from the zero line, confirming a valid entry point for selling the pound. As a result, the pair declined toward the target level of 1.3486.

Sellers of the pound acted quite aggressively, and several active attempts by buyers to defend the 1.3500 level quickly failed. Technical analysis shows that the bullish sentiment that dominated the market last week has started to weaken. Short-term prospects for the pound also remain unimpressive unless there is a significant shift in market sentiment due to geopolitics.

Further direction of GBP/USD will depend on US data on consumer confidence and the housing price index. The consumer confidence indicator, which reflects US household sentiment, serves as a barometer of economic conditions. High values of this indicator usually signal strong consumer demand, which may put pressure on the pair. Similarly, the housing price index will provide valuable information about the US real estate market, one of the pillars of the economy. Rising housing prices are generally associated with positive economic trends, while stagnation or decline may indicate potential problems. The combination of these geopolitical and macroeconomic factors will allow traders to form a clearer view of the near-term outlook for the dollar against the pound.

As for the intraday strategy, I will primarily rely on the implementation of Scenario #1 and Scenario #2.

Buy signal

Scenario #1: Today I plan to buy the pound upon reaching the entry point around 1.3501 (green line on the chart), with a target of 1.3530 (thicker green line on the chart). At 1.3530, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move from the level). Further pound growth today can only be expected after positive news from the Middle East. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2: I also plan to buy the pound today in the case of two consecutive tests of 1.3483 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3501 and 1.3530 can be expected.

Sell signal

Scenario #1: I plan to sell the pound after a break below the 1.3483 level (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 1.3443, where I will exit short positions and immediately open buy positions in the opposite direction (expecting a 20–25 point move back). Pressure on the pound today may return in the event of a firm stance by the US and Iran. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started declining from it.

Scenario #2: I also plan to sell the pound today in the case of two consecutive tests of 1.3501 when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3483 and 1.3443 can be expected.

On the chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated level to place Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – estimated level to place Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider 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 quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

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

The test of the 1.1702 level occurred when the MACD indicator had just started moving downward from the zero line, confirming a valid entry point for selling the euro. As a result, the pair declined by 12 points, and the move ended there.

The lack of relevant fundamental data from the Eurozone, as expected, put pressure on the euro. The absence of new information from the region that could clarify the current economic situation or outline future trends encourages investors to remain on the sidelines. The current geopolitical situation also creates uncertainty and reinforces the prevailing negative market sentiment.

Further movement of the US dollar will be determined by the release of US data on consumer confidence, housing price dynamics, and the ADP employment report. The consumer confidence indicator reflects how US households assess current and future economic conditions, while the housing price index serves as an indicator of the real estate market, which is directly correlated with overall economic conditions. Strong data will support the US dollar.

The weekly ADP employment report precedes the release of the more comprehensive US labor market report. Sustained job growth recorded by ADP is generally interpreted as a sign of a healthy labor market and may increase demand for the US dollar.

As for the intraday strategy, I will primarily rely on the implementation of Scenario #1 and Scenario #2.

Buy signal

Scenario #1: Today, euro buying is possible upon reaching the level of 1.1705 (green line on the chart), with a target at 1.1726. At 1.1726, I plan to exit the market and also consider selling the euro in the opposite direction, expecting a 30–35 point move from the entry point. A rise in the euro today can only be expected after positive news from the Middle East. Important! Before buying, make sure that the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1685 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.1705 and 1.1726 can be expected.

Sell signal

Scenario #1: I plan to sell the euro after it reaches the 1.1685 level (red line on the chart). The target will be 1.1656, where I plan to exit the market and open a buy position in the opposite direction (expecting a 20–25 point move). Pressure on the pair will return today in the event of a firm stance by the US and Iran. Important! Before selling, make sure that the MACD indicator is below the zero line and just starting to decline from it.

Scenario #2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1705 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.1685 and 1.1656 can be expected.

On the chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated level to place Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – estimated level to place Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important. Beginner traders in the Forex market should make entry decisions with extreme caution. It is best to stay out of the market before the release of major fundamental reports 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 quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, similar to the one outlined above. Spontaneous decision-making based on current market conditions is an inherently losing strategy for an intraday trader.

According to reports, the reserve could include about 200,000 BTC seized by law enforcement over recent years. If implemented, this initiative could become one of the most significant steps toward integrating cryptocurrencies into the US traditional financial framework — a goal Trump pledged to pursue about 1.5 years ago. Such a move would not only reflect growing recognition of digital assets but also demonstrate an intent to use them as a tool to strengthen economic stability.

White House crypto adviser Patrick Witt said the administration is working on the legal and technical mechanisms needed to secure and protect BTC on the US government's balance sheet. That underlines the seriousness of the plans and the need to work through all aspects of storing and managing such large volumes of cryptocurrency. New steps on the crypto reserve are expected to be presented in the coming weeks, promising a more detailed understanding of the structure and objectives of this ambitious program.

Creating a national Bitcoin reserve could have far-reaching consequences. First, it could boost legitimacy and trust in cryptocurrencies as an asset class. Second, it could drive the development of more advanced regulatory frameworks, ensuring the security and transparency of digital?currency operations. Finally, the move could position the US as a leader in the crypto economy, opening new opportunities for innovation and investment — an outcome that current President Donald Trump is actively pursuing.

Trading recommendations

Bitcoin

Buyers are currently targeting a return to $77,300, which opens a direct path to $7,100, and from there to $80,900. The farthest target is the high near $83,100; breaking that level would indicate attempts to resume a bull market. In case of a decline, buyers are expected at $76,000. A drop below that area could quickly push BTC toward $75,000. The far downside target would be around $73,100.

Ethereum

A clear hold above $2,314 opens a direct path to $2,394. The far target is the high near $2,459; breaking that would indicate strengthening bullish sentiment and renewed buyer interest. In case of a decline, buyers are expected at $2,228. A fall below that area could quickly push ETH toward $2,162. The far downside target would be around $2,114.

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.