On the lower timeframe, I can identify a classic three-wave upward corrective structure. Following the completion of this structure, a new downward trend segment began to form, which logically should take the shape of an impulse wave. If this assumption is correct, the market may develop a five-wave structure within wave C of the higher degree, with targets below the 1.1400 level. Are there sufficient fundamental reasons to expect such a strong strengthening of the dollar? In my opinion, currently there are not. Monday demonstrated that Tehran and Washington may return to the negotiating table, reducing the likelihood of further dollar appreciation.

The EUR/USD pair lost another 30 basis points during Thursday's trading, even before the start of the American session. Neither Monday nor Wednesday managed to force market participants to abandon euro selling in favor of the US dollar. Let me remind you that optimistic news regarding negotiations between Iran and the United States emerged on both Monday and Wednesday, but it is safe to say that Tuesday's and Thursday's developments erased all previous optimism — once again. The market continues to trade almost exclusively on geopolitical factors, which, as we have already established, shift direction almost daily. At present, the formation of wave 3 or wave c downward continues, but it has developed a clearly defined five-wave structure, meaning it may be completed in the near future around the 1.1578 level, corresponding to the 61.8% Fibonacci retracement level.

Today, the Eurozone PMI reports were released. Data showed that the services sector slowed from 47.6 to 46.4 points, while the manufacturing sector declined from 52.2 to 51.4 points. Therefore, it is reasonable to assume that today's euro selling was at least partly driven by economic data. It is important to remember that PMI indices are leading indicators of economic conditions. In other words, if the indices weaken in May, economic growth may also slow in the coming months — especially considering that eurozone growth has remained weak for several years. Based on this, the ECB may decide against raising interest rates in June, as policymakers must now consider not only inflation but also slowing economic activity. Like the Federal Reserve, the European regulator may find itself facing the difficult challenge of stagflation. The question now is which priority the ECB will choose.

General Conclusions

Based on the EUR/USD analysis, I conclude that the pair remains within a broader upward trend segment (lower chart), while in the shorter term it is moving within a corrective structure. The corrective a-b-c wave structure appears complete. Consequently, wave 3 or wave c continues to develop and may become part of a larger wave C. The entire wave C (if the current wave count is correct) could eventually complete far below the 1.1400 area. However, such a scenario would require strong geopolitical support. Otherwise, the current downward structure may instead form a simple a-b-c pattern and conclude near the 1.1578 level.

On the higher timeframe, an upward trend segment remains visible, followed by the formation of a corrective wave structure. In the near future, wave C may develop with targets around 1.1352, corresponding to the 38.2% Fibonacci retracement level. Once the A-B-C structure is completed, a new long-term upward trend may begin to form.

Key Principles of My Analysis:

1. Wave structures should remain simple and easy to interpret. Complex structures are difficult to trade and often subject to change.
2. If there is no confidence in current market conditions, it is better to stay out of the market.
3. Absolute certainty about market direction never exists. Always use Stop Loss protection orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.

Under the current circumstances, traders can only wait either for another reaction from imbalance 13, which remains the final bullish pattern within the current bullish impulse, or for its invalidation. If the pair's decline is viewed as a corrective pullback, then it could reasonably end within imbalance 13. However, without geopolitical support, traders appear unwilling to return to long positions. If the current movement is interpreted as the beginning of a new bearish trend, there were no suitable levels for opening short positions, as the only bearish pattern — imbalance 15 — was never tested.

I must once again point out that the entire appreciation of the US dollar from January through March was driven exclusively by geopolitics. As soon as the United States and Iran agreed to a ceasefire, bears immediately retreated, and bulls dominated trading for more than a month. At the moment, the ceasefire remains fragile, but negotiations have not completely stopped, and chances for peace still exist. Unfortunately, traders are increasingly losing confidence in a full resolution of the conflict and a lasting agreement between Iran and the United States. More precisely, a deal will probably eventually be signed. However, "eventually" is not sufficient for the market. If, hypothetically, an agreement is reached only a year from now, traders are unlikely to remain optimistic about it today and continue selling the US dollar.

The overall technical picture remains relatively clear. The bullish trend remains intact but urgently requires support. Ideally, that support should come from geopolitics — namely, renewed negotiations between Iran and the United States accompanied by genuine concessions from both sides. Without a positive news backdrop, it will be difficult for the euro to resume growth.

Thursday's economic background once again failed to support bulls and the euro. PMI data for the German and eurozone manufacturing and services sectors came in weaker than market expectations. Although traders often ignore economic releases, it is reasonable to assume that today's economic data contributed to pressure on EUR/USD.

There are still many reasons for bulls to remain active in 2026, and even the outbreak of war in the Middle East has not significantly reduced them. Structurally and globally, Trump's policies — which contributed to the sharp decline in the dollar last year — have not changed. In the coming months, the US currency may periodically strengthen amid risk aversion, but this factor would require constant escalation of the Middle East conflict. I still do not believe in the formation of a long-term bearish trend for EUR/USD. The dollar has received temporary support from the market, but what fundamental factors would allow bears to maintain pressure in the long term?

News Calendar for the US and the Eurozone:

Germany

• GfK Consumer Confidence Index (06:00 UTC)
• Business Climate Index (08:00 UTC)

United States

• University of Michigan Consumer Sentiment Index (14:00 UTC)

The May 22 economic calendar contains three events, none of which can be considered particularly important. Therefore, the influence of the economic background on market sentiment on Friday is likely to remain very limited.

EUR/USD Forecast and Trading Advice:

In my view, the pair remains in the process of forming a bullish trend. The information background changed sharply three months ago, but the trend itself cannot yet be considered canceled or complete. Therefore, bulls may resume the upward move in the near term if they receive even modest support from geopolitics.

Traders previously had opportunities to open long positions based on signals from imbalance 12 and the order block. The upward movement may resume toward this year's highs from imbalance 13. However, in the coming days it is important for bulls to maintain control of the market. For uninterrupted euro growth, the Middle East conflict must move toward a sustainable peace, and signs of de-escalation do appear from time to time, although they remain relatively rare. At present, bullish traders still lack sufficient support for a new impulse. The zone for new buying opportunities is 1.1605–1.1649.

The situation surrounding the resolution of the Middle East conflict appears to have reached a deadlock, while traders remain uncertain about the market's next direction. Today the market may favor bulls, while tomorrow it may shift toward bears. This is precisely the type of environment observed in recent weeks. At the moment, confidence in peace efforts in the Middle East and the reopening of the Strait of Hormuz has fallen to very low levels.

In my view, the trend remains bullish despite the pair's sharp declines this year. At present, the ceasefire situation in the Middle East remains fragile, but it still holds. Naturally, markets cannot indefinitely rely on unconfirmed information when making trading decisions. The Strait of Hormuz remains effectively under dual blockade, while Tehran and Washington continue unsuccessfully attempting to break the deadlock without making significant concessions during negotiations. The situation alternates between improvement and deterioration. Markets remained highly optimistic for nearly a full month, but last week they faced the reality of the situation.

The technical picture currently looks as follows. Bullish imbalance 18 generated a price reaction, so if not for bearish imbalance 19, I would already be preparing for a strong bullish advance. However, bearish imbalance 19 was formed within an overall bullish trend, so I do not yet consider it suitable for opening short positions. The downward move may continue only in the event of new, truly significant, and negative geopolitical developments in the Middle East conflict.

Thursday's economic background, to put it mildly, did not support the British pound. PMI indices showed mixed dynamics, as the services sector declined to 47.9 points, while the manufacturing sector remained at 53.7 points. Nevertheless, the pound should be considered relatively resilient given that it did not fall further following this week's unemployment and inflation reports.

In the United States, the broader informational backdrop remains such that, from a long-term perspective, there are few reasons to expect anything other than further dollar weakness. Even the conflict involving Iran and the United States changes little in this regard. Geopolitical tensions temporarily restored the dollar's safe-haven appeal for approximately two months, but the overall long-term outlook for the US dollar remains challenging. The US labor market continues to weaken, the economy is moving closer to recession, and unlike the ECB and the Bank of England, the Federal Reserve does not appear prepared to tighten monetary policy in 2026. Additionally, four major protest movements against Donald Trump have already taken place across the United States, while Jerome Powell's eventual departure could further worsen the dollar's outlook if the FOMC under Kevin Warsh adopts a more dovish stance. From an economic perspective, I see no fundamental reasons supporting dollar growth.

News Calendar for the US and UK:

United Kingdom

• Retail Sales Data (06:00 UTC)

United States

• University of Michigan Consumer Sentiment Index (14:00 UTC)

The May 22 economic calendar contains only two relatively minor events. Therefore, the impact of economic data on market sentiment on Friday may be limited or absent altogether.

GBP/USD Forecast and Trading Advice:

For the British pound, the long-term outlook remains bullish. The Three Drives pattern warned traders about the beginning of the upward move, and since then, three bullish patterns and three bullish signals have formed. Last week, geopolitics complicated the previously optimistic outlook for bulls, but they still have an opportunity to maintain control within imbalance 18. To achieve this, bulls must invalidate imbalance 19 and receive supportive geopolitical developments. My target for the pound remains the 2026 high at 1.3867. I will only begin considering a bearish trend if imbalance 18 is invalidated. In that case, bearish patterns would come into effect. Until that happens, I continue to expect further growth.

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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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The price test at 158.95 occurred at a moment when the MACD indicator was just beginning to move downward from the zero line, which confirmed a valid entry point for selling the dollar. However, no downward movement in the pair followed.

In the second half of the day, investors will focus on the release of important US macroeconomic indicators that could significantly influence the dynamics of the US currency. First in line are weekly initial jobless claims data. Traditionally, a decline in this indicator signals an improving labor market and, consequently, favorable economic trends. Positive data could support further strengthening of the US dollar against the yen. Following the unemployment figures, building permits data will be released. This indicator is an important leading signal reflecting activity in the real estate development sector, which in turn has a significant impact on related industries and employment levels. An increase in permits will be seen as a sign of recovery or active growth in the construction sector, which would be somewhat surprising given the sharp rise in mortgage rates. Weak data, however, may put pressure on the dollar.

Equally important will be reports on key indices that provide insight into the manufacturing and services sectors. The US Manufacturing PMI and Services PMI are key barometers tracking trends in demand, production, employment, and price changes. Improvements in both indicators that exceed analyst expectations will be clearly interpreted as a signal of strong economic activity and a reason to buy the US dollar against the Japanese yen, among other currencies.

Regarding the intraday strategy, I will mainly rely on scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today at an entry point around 159.12 (green line on the chart), targeting a rise to 159.43 (thicker green line). At 159.43, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 point reversal. A rise in the pair today is possible on strong US data. Important: before buying, ensure that the MACD is above the zero line and just beginning to rise from it.

Scenario #2: I will also consider buying USD/JPY if there are two consecutive tests of 158.93 while the MACD is in oversold territory. This would limit downward potential and trigger an upward reversal. A move toward 159.12 and 159.43 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY after a break below 158.93 (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers is 158.56, where I will exit shorts and immediately consider buying in the opposite direction (expecting a 20–25 point rebound). Selling pressure may return on weak US data. Important: before selling, ensure that the MACD is below the zero line and just beginning to decline from it.

Scenario #2: I will also consider selling USD/JPY if there are two consecutive tests of 159.12 while the MACD is in overbought territory. This would limit upward potential and lead to a downward reversal. A decline toward 158.93 and 158.56 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – target price (Take Profit level), where further growth is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – target price (Take Profit level), where further decline is unlikely
• MACD indicator – entry decisions should consider overbought and oversold conditions

Important Notice

Beginner Forex traders should be very cautious when entering the market. Before major fundamental releases, it is best to stay out of the market to avoid sharp price volatility. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you may quickly lose your entire deposit, especially if you do not apply proper money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making impulsive trading decisions based on current market conditions is, from the outset, a losing intraday trading strategy.

The price test at 1.3424 occurred at a moment when the MACD indicator was just beginning to move downward from the zero line, which confirmed a valid entry point for selling the pound. However, no significant downward movement followed.

Rather weak UK PMI data for May prevented the pound from extending gains against the US dollar. The Manufacturing PMI remained at 53.7 versus the forecast of 53.0, while the Services sector dropped sharply from April's 52.7 to 47.9. This significant decline points to a clearly weakening services sector, which is the main driver of the UK economy.

Attention now shifts to US labor market data and building permits statistics. These indicators are important measures of the health of the US labor market and construction sector, both of which significantly influence overall economic growth. In addition, data on the US Manufacturing PMI and Services PMI are also expected. These indices, based on surveys of purchasing managers, provide insight into business expectations and current economic activity. Strong readings signal optimism and growth, which may support the US dollar against the pound.

Regarding intraday strategy, I will mainly rely on scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today at an entry point around 1.3435 (green line on the chart), targeting a rise to 1.3466 (thicker green line). At 1.3466, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 point reversal. A pound increase today is only possible after weak US data. Important: before buying, ensure that the MACD is above the zero line and just beginning to rise from it.

Scenario #2: I will also consider buying the pound if there are two consecutive tests of 1.3418 while the MACD is in oversold territory. This would limit downward potential and trigger a reversal upward. A move toward 1.3435 and 1.3466 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound after a break below 1.3418 (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers is 1.3383, where I will exit shorts and immediately consider buying in the opposite direction (expecting a 20–25 point rebound). Selling pressure may return on strong US data. Important: before selling, ensure that the MACD is below the zero line and just beginning to decline from it.

Scenario #2: I will also consider selling if there are two consecutive tests of 1.3435 while the MACD is in overbought territory. This would limit upward potential and lead to a downward reversal. A decline toward 1.3418 and 1.3383 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – target price (Take Profit level), where further growth is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – target price (Take Profit level), where further decline is unlikely
• MACD indicator – entry decisions should consider overbought and oversold conditions

Important Notice

Beginner Forex traders should be very cautious when entering the market. Before major fundamental releases, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you may quickly lose your entire deposit, especially if you do not apply proper money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making impulsive trading decisions based on current market conditions is, from the outset, a losing intraday trading strategy.

The price test at 1.1617 occurred at a moment when the MACD indicator was just beginning to move downward from the zero line, which confirmed a valid entry point for selling the euro. As a result, the pair declined by only 20 points.

Weak eurozone PMI data put pressure on the euro, which buyers managed to absorb confidently. The eurozone Manufacturing PMI declined, as did activity in the services sector. This may indicate a slowdown in economic growth in the region, which in turn negatively affects the euro's attractiveness. However, it is important to note that PMI readings are leading indicators, and the latest data may be influenced by temporary factors such as seasonality or short-term supply chain disruptions. Final May figures will be released in June.

Later in the second half of the day, investors will closely watch key US macroeconomic data, which may significantly impact the US dollar. First in line are weekly initial jobless claims. Historically, a decline in this indicator signals a strengthening labor market and, consequently, positive economic trends. A positive release could support further strengthening of the US currency. Following the unemployment data, building permits figures will be published. This indicator is an important leading measure of construction sector activity, which in turn has a significant impact on related industries and employment levels. An increase in building permits would be interpreted as a sign of recovery or active growth in the construction sector, which should also support the dollar.

Reports on leading indices will also be important, as they provide insight into the state of the manufacturing and services sectors.

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

Buy Signal

Scenario #1: Today, euro purchases can be considered at a price around 1.1631 (green line on the chart), targeting a rise to 1.1659. At 1.1659, I plan to exit the market and also consider selling in the opposite direction, aiming for a 30–35 point move from the entry point. A euro rise today is only possible after weak US data. Important: before buying, ensure the MACD is above the zero line and just beginning to rise from it.

Scenario #2: I will also consider buying the euro if there are two consecutive tests of 1.1601 while the MACD is in oversold territory. This would limit downward potential and trigger a reversal upward. A move toward 1.1631 and 1.1659 can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after reaching 1.1601 (red line on the chart). The target is 1.1570, where I will exit and immediately consider buying in the opposite direction (expecting a 20–25 point rebound). Selling pressure is expected to return on strong US data. Important: before selling, ensure the MACD is below the zero line and just beginning to decline from it.

Scenario #2: I will also consider selling if there are two consecutive tests of 1.1631 while the MACD is in overbought territory. This would limit upward potential and lead to a downward reversal. A decline toward 1.1601 and 1.1570 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – target price (Take Profit level), where further growth is considered unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – target price (Take Profit level), where further decline is considered unlikely
• MACD indicator – entry decisions should consider overbought and oversold zones

Important Notice

Beginner Forex traders should be extremely cautious when entering the market. Before major fundamental releases, it is best to stay out of the market to avoid sharp price volatility. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you may quickly lose your entire deposit, especially if you do not apply proper risk management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one outlined above. Making impulsive trading decisions based on current market conditions is, from the outset, a losing intraday trading strategy.

Today's preliminary eurozone PMI data for May came in mixed. Similar reports from the UK were also disappointing. The eurozone Manufacturing PMI declined to 51.4 from April's 52.2, falling short of the market forecast of 51.8. Formally, the sector remains in expansion territory, but the trend is becoming concerning. The UK Manufacturing PMI held steady at April's level of 53.7 versus the forecast of 53.0, which in itself is a positive signal. However, that was where the positive news ended. The Services PMI dropped sharply from April's 52.7 to 47.9, which is quite negative for the British economy.

Attention will now shift to US weekly initial jobless claims data and building permits statistics. These indicators are among the key measures of the condition of the US labor market and construction sector, both of which significantly influence broader economic trends. Initial jobless claims are expected to remain largely unchanged from the previous week, signaling continued strength in the labor market. At the same time, building permits data may present a mixed picture, reflecting both ongoing construction activity in some regions and potential slowdowns associated with higher mortgage interest rates.

Reports on the US Manufacturing PMI and Services PMI are also expected. These indices, based on surveys of purchasing managers, provide insight into business expectations and current economic activity. Strong readings are anticipated, signaling optimism and growth, which could provide solid support for the US dollar.

If the data comes in strong, I will rely on the Momentum strategy. If the market shows little reaction to the data, I will continue using the Mean Reversion strategy.

Momentum Strategy (Breakout Trading) for the Second Half of the Day

For EUR/USD

• A breakout above 1.1635 may lead to euro growth toward 1.1659 and 1.1698;
• A breakout below 1.1609 may lead to euro weakness toward 1.1585 and 1.1555;

For GBP/USD

• A breakout above 1.3450 may lead to pound growth toward 1.3475 and 1.3499;
• A breakout below 1.3420 may lead to pound weakness toward 1.3380 and 1.3344;

For USD/JPY

• A breakout above 159.13 may lead to dollar growth toward 159.39 and 159.60;
• A breakout below 158.85 may trigger dollar selling toward 158.57 and 158.28;

Mean Reversion Strategy for the Second Half of the Day

For EUR/USD

• I will look for selling opportunities after a false breakout above 1.1647 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 1.1595 followed by a return above this level;

For GBP/USD

• I will look for selling opportunities after a false breakout above 1.3453 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 1.3413 followed by a return above this level;

For AUD/USD

• I will look for selling opportunities after a false breakout above 0.7155 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 0.7107 followed by a return above this level;

For USD/CAD

• I will look for selling opportunities after a false breakout above 1.3775 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 1.3752 followed by a return above this level.

The euro appears to have found support below the 1.1600 level and is posting moderate gains amid increasing speculation about a potential agreement between the United States and Iran, as well as hawkish signals from the Federal Reserve reflected in the outcome of the April monetary policy meeting.

Market sentiment improved following reports that the United States is close to reaching an agreement with Iran. US President Donald Trump stated that negotiations are in the final stage but warned Iran that failure to reach a deal could lead to military action against the Islamic Republic.

Oil prices dropped sharply on this news, falling by more than 5%, although the decline paused today.

The US Dollar Index (DXY), which measures the value of the dollar against a basket of six major currencies, declined by 0.20% to 99.08.

Recently, the Financial Times reported that "two supertankers heading to China successfully passed through the Strait of Hormuz." This strengthened speculation that keeping the strait open could reduce inflationary pressure by contributing to lower energy prices and reducing the risk of global stagflation.

Regarding the United States, the minutes of the latest Federal Reserve meeting showed that most FOMC members support a hawkish stance, emphasizing the need for further monetary policy tightening if inflation continues to exceed the 2% target.

The April meeting marked the second consecutive occasion on which an increasing number of officials noted that higher borrowing costs could be justified if prices remain elevated. The minutes indicate broad agreement among policymakers that the conflict in the Middle East could significantly affect the balance of risks and the choice of an appropriate monetary policy strategy. Traders have already priced in nearly a 50% probability of an interest rate hike at the Federal Reserve's December meeting.

Across the Atlantic, the latest eurozone inflation data, which exceeded the 3% threshold, has strengthened the arguments of some European Central Bank officials in favor of taking action as early as the June meeting.

At the ECB's April meeting, policymakers discussed the possibility of raising rates, suggesting that the June 11 meeting could become the first at which the deposit rate is increased.

According to Prime Terminal data, the probability of a 25-basis-point rate hike stands at nearly 82%.

On Tuesday, ECB representative Kocher stated that a June rate hike remains possible if the situation surrounding the Iran conflict does not improve. Bundesbank President Joachim Nagel also supported this view, indicating that the ECB is moving away from its original scenario and may take action as early as June.

Francois Villeroy de Galhau of the Bank of France stated that the central bank "will be ready to act as necessary," adding that the conflict surrounding Iran poses risks to both economic growth and inflation.

On the daily chart, the EUR/USD pair is trading near 1.1629. In the short term, the pair maintains a moderately bearish outlook, remaining below the key simple moving averages (SMAs). Oscillators remain in negative territory, confirming bearish sentiment, while the 50-day SMA acts as resistance. The psychological 1.1600 level serves as support.

On Thursday, the GBP/USD currency pair is showing mixed dynamics, fluctuating between modest gains and slight losses while remaining near the weekly high reached the previous day. At the time of writing, the pair is trading around the 1.3420 level, little changed since the start of the day. Traders appear cautious and reluctant to open aggressive positions amid conflicting signals regarding a potential peace agreement between the United States and Iran.

On Wednesday, US President Donald Trump stated that the country was in the "final stage" of negotiations with Iran. Following these remarks, US Vice President J.D. Vance expressed optimism, indicating that Iran was prepared to reach an agreement. However, the initial optimism quickly faded after Trump warned of possible military action if Iran refused to sign a peace deal. In addition, persistent disagreements over Iran's nuclear program and control of the strategically important Strait of Hormuz continue to support a geopolitical risk premium, strengthening the US dollar's position as a traditional safe-haven asset and limiting GBP/USD growth.

At the same time, the minutes of the Federal Reserve meeting held on April 28–29 showed that most policymakers consider further monetary policy tightening appropriate if inflation continues to remain significantly above the 2% target. This aligns with market expectations that the US central bank may raise interest rates by 25 basis points in 2026, which is also supporting the US dollar.

This situation highlights a significant divergence in monetary policy compared with the Bank of England, where the likelihood of near-term tightening remains low, further limiting GBP/USD upward potential.

After the release of UK consumer inflation data on Wednesday, which came in below expectations, traders shifted expectations for the next Bank of England rate hike to December. The UK Office for National Statistics (ONS) reported that the headline Consumer Price Index (CPI), a key inflation indicator, slowed to 2.8% year-on-year in April from 3.3% in March, falling short of forecasts for a 3.0% reading. This, combined with an unexpected rise in the UK unemployment rate to 5.0%, provides an additional argument in favor of the Bank of England maintaining a cautious approach to interest rates amid political instability.

Today, traders should pay close attention to remarks from Bank of England Governor Andrew Bailey, which could significantly influence the market during the US trading session. Attention should also be given to the preliminary Purchasing Managers' Index (PMI) data in both the UK and the US, which may provide opportunities for short-term trading operations. Nevertheless, given the current macroeconomic environment, it would be prudent to wait for signs of sustained buying interest before opening positions targeting a further GBP/USD recovery following the rebound from the 1.3300 level, the lowest level since April 8 reached on Monday.

From a technical perspective, the pair is attempting to hold above the convergence of the 200-day and 50-day SMAs. If this support remains intact and the price breaks above the 9-day EMA, bulls may target the 100-day SMA near the 1.3480 level. However, as oscillators remain in negative territory, bullish momentum remains limited. The 200-day SMA serves as immediate support, followed by the psychological 1.3400 level below it. At the moment, bears retain the advantage.

The wave structure on the hourly chart currently remains straightforward. The latest completed upward wave exceeded the previous peak by only a few pips, while the latest downward wave — which is still incomplete — broke below the previous low. Thus, the trend has shifted to bearish. The temporary ceasefire between Iran and the United States supported the bulls for a month, but now, after six weeks, it can be said that geopolitics is moving toward preserving the conflict. As I previously warned, the bulls were unable to maintain their momentum without a full ceasefire in the Middle East.

On Wednesday, neither bulls nor bears were in a hurry to act. Trading activity remained weak throughout the day, but in the evening Donald Trump decided to wake up the market by stating that negotiations with Iran were progressing successfully and that most of Washington's demands could be met. Following these comments, the bulls regained confidence, but their momentum quickly faded.

Unfortunately, confidence in Donald Trump's statements remains low, as the president changes his rhetoric several times a day. As a result, traders are reluctant to draw conclusions. Just last night, the U.S. leader stated that Iran had only a few days left to accept Washington's terms and sign an agreement, clearly hinting that new missile strikes could follow afterward.

However, I doubt the likelihood of renewed strikes against Iran just as much as I doubt the prospect of a near-term peace agreement. And apparently I am not the only one, as the market on Thursday has also shown little urgency in opening positions. In my view, neither a deal with Iran nor new strikes against Iran are likely in the near future. Trump could have resumed military aggression many times over the past month and a half, but he has not done so.

On the 4-hour chart, the pair rebounded from the 76.4% corrective level at 1.1617 but failed to continue either upward growth or begin a new decline. Thus, geopolitics continues to change the direction of the pair's movement on a daily basis, which is why I currently recommend focusing primarily on the hourly chart for analysis. No emerging divergences are currently visible on any indicators.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 6,528 long positions and closed 1,470 short positions. Over seven weeks in February and March, the bulls' total advantage disappeared due to the war in Iran, while over the last seven weeks the situation has stabilized amid the pause in hostilities in the Middle East.

The total number of long positions held by speculators now stands at 224,000, compared to 184,000 short positions. The gap is once again widening in favor of the euro.

Overall, in the long term, large players continue to view the euro with considerable interest. Naturally, global events of various kinds — which have been abundant in recent years — continue to influence investor sentiment. At the moment, market attention remains focused on the Middle East, where the war has merely been paused rather than ended. Therefore, 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:

Germany

• Manufacturing PMI (07:30 UTC)
• Services PMI (07:30 UTC)

Eurozone

• Manufacturing PMI (08:00 UTC)
• Services PMI (08:00 UTC)

United States

• Building Permits (12:30 UTC)
• Housing Starts (12:30 UTC)
• Initial Jobless Claims (12:30 UTC)
• Manufacturing PMI (13:45 UTC)
• Services PMI (13:45 UTC)

On May 21, the economic calendar includes nine scheduled events, with the German and Eurozone PMI reports attracting the most attention. Despite the large number of releases, the impact of the economic backdrop on market sentiment on Thursday may remain limited.

EUR/USD Forecast and Trading Recommendations:

I recommend considering short positions on Thursday after a rebound from the 1.1630 level on the hourly chart, targeting 1.1578. Long positions may be opened after a close above 1.1630, with targets at 1.1682 and 1.1745.

Fibonacci grids are drawn from 1.1409–1.1850 on the hourly chart and from 1.1474–1.2082 on the 4-hour chart.

The wave structure shifted to a bearish outlook last week. The latest completed upward wave exceeded the previous peak by only a few pips, while the latest downward wave confidently broke below the previous low. Geopolitics is currently supporting the bears, as the market has still not seen the signing of even a temporary memorandum of understanding between Iran and the United States. At the moment, the ceasefire remains in place, but the situation is gradually shifting toward escalation and a prolonged confrontation.

Wednesday's news background supported the bears, although this support came mainly from Donald Trump's evening remarks, in which he stated that Iran was prepared to accept several of Washington's demands. However, this support for the bulls and the pound was short-lived, while the morning inflation report from the United Kingdom — which had been the main source of hope — was largely ignored. And unjustifiably so. Contrary to forecasts, the Consumer Price Index slowed not to 3.0% year-on-year, but to 2.8%. Core inflation also declined more sharply than the market had expected. As a result, the probability of monetary policy easing by the Bank of England has effectively dropped to near zero.

Based on this report and the conclusions drawn from it, the bears could have launched another attack yesterday, but both bears and bulls continue to ignore economic indicators. Thus, geopolitics remains the sole driver of traders' actions. Predicting the next developments on this front is extremely difficult. As recently as last night, Donald Trump set a new deadline for Iran, hinting that if Tehran refuses to sign an agreement, Washington could resume attacks as early as Sunday or the beginning of next week. Therefore, the bulls still have very few reasons for optimism.

On the 4-hour chart, GBP/USD rebounded from the 23.6% corrective level at 1.3327 and reversed in favor of the pound, rising toward the 38.2% Fibonacci level at 1.3429. A rejection from this level would favor the U.S. dollar and signal renewed decline toward 1.3327. A bearish divergence on the CCI indicator also worked in favor of the American currency. A consolidation above 1.3429 would support further gains for the pound.

Commitments of Traders (COT) Report:

The sentiment among the "Non-commercial" category of traders became less bearish during the latest reporting week. The number of long positions held by speculators increased by 17,032, while short positions decreased by 3,817. The gap between long and short positions now stands at approximately 79,000 versus 123,000.

For six consecutive weeks in February and March, non-commercial traders actively increased short positions and reduced long positions, creating a strong imbalance between long and short positions. In recent months, bears have dominated the market, which is unsurprising given the geopolitical backdrop.

I still do not believe in a sustained bearish trend for the pound, but everything now depends not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, the market had repositioned itself for de-escalation, but recent developments suggest that a full ceasefire remains far away and hostilities could resume at any moment.

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

United Kingdom

• Manufacturing PMI (08:30 UTC)
• Services PMI (08:30 UTC)

United States

• Building Permits (12:30 UTC)
• Housing Starts (12:30 UTC)
• Initial Jobless Claims (12:30 UTC)
• Manufacturing PMI (13:45 UTC)
• Services PMI (13:45 UTC)

On May 21, the economic calendar includes seven scheduled events, with the British reports standing out as the most important. However, the influence of the economic backdrop on market sentiment on Thursday may remain limited.

GBP/USD Forecast and Trading Recommendations:

Selling opportunities were available after a rejection from the 1.3454–1.3466 level, targeting 1.3408 and 1.3349–1.3355. These positions may still be held open. Buying opportunities may emerge after a close above the 1.3454–1.3466 level, targeting 1.3526–1.3539, or after a rebound from the 1.3408 level.

Fibonacci grids are drawn from 1.3158–1.3655 on the hourly chart and from 1.3866–1.3158 on the 4-hour chart.

At the start of the European trading session, gold (XAU/USD) continues to show solid intraday declines, partially offsetting the moderate recovery momentum recorded the previous day after rebounding from the $4,450 level. The "hawkish" minutes of the FOMC (Federal Open Market Committee) meeting published on Wednesday confirmed market expectations regarding a possible interest rate increase before the end of the year. This is supporting the U.S. dollar, which remains near six-week highs, putting pressure on gold as a non-yielding asset.

At the same time, the decline in prices remains limited, as market participants remain cautious while awaiting further clarity on the situation in the Middle East, where conflicting signals continue to emerge regarding the prospects of a peace agreement between the United States and Iran. The minutes from the Federal Reserve's April 28–29 meeting showed that most officials consider further monetary tightening justified if inflation remains above the 2% target level. Overall, committee members noted that inflation risks are skewed to the upside, while geopolitical tensions could significantly affect the balance of risks and complicate future monetary policy decisions.

According to the CME Group's FedWatch Tool, the market estimates the probability of a 25-basis-point rate hike in 2026 at more than 50%. Such "hawkish" expectations are helping to limit the corrective weakening of the dollar observed during the Asian session, which had been driven by growing hopes for de-escalation in the conflict with Iran. In particular, on Wednesday, U.S. President Donald Trump stated that negotiations with Iran were in their final stage. Vice President J.D. Vance also gave an optimistic assessment, pointing to Tehran's willingness to reach an agreement. These statements improved risk appetite, somewhat weakening the dollar's position as a safe-haven asset and supporting gold prices.

Nevertheless, positive expectations remain limited amid Trump's warnings about the possible use of military force if negotiations fail. Iran, in turn, reacted sharply to such statements, warning of the risk of large-scale escalation in the event of renewed attacks by the United States or Israel. In addition, investors remain skeptical about the prospects for an agreement due to deep disagreements over Tehran's nuclear program and tensions surrounding the strategically important Strait of Hormuz.

The situation is further aggravated by reports that Iran has established a new "Office for Persian Gulf Strait Affairs," which will oversee shipping in this key region. This maintains elevated geopolitical risks, limiting the downside potential for the dollar while also restraining sustained growth in gold prices, forcing buyers to remain cautious.

From a technical perspective, XAU/USD continues to maintain a moderately bearish tone. The 14-period Relative Strength Index (RSI) remains negative, although it still signals neutral to weak momentum. At the same time, the MACD indicator is also negative, confirming the bearish sentiment.

If growth continues, the nearest resistance is located at the 20-day SMA. On the other hand, the psychologically significant $4,500 level remains the key reference point and the nearest support.

Global commodity markets sharply changed direction. This followed Donald Trump's sensational announcement that talks between the US and Iran had reached a "home stretch." The White House chief canceled a prepared coercive strike on Tehran's positions in response to new compromise proposals from the Iranian side. The emergency de?escalation immediately dampened days?long panic on commodity markets, reversing oil prices. Technology leader Nvidia delivered a phenomenal quarterly report for April, posting record revenue of $81.6 billion (an 85% year?on?year surge) and net income of $58.3 billion, more than tripling year?on?year. The company firmly retains its status as the most valuable public business on the planet with a $5.5 trillion market capitalization.

However, the overheated market's paradox manifested fully: despite the total rout of consensus forecasts, the issuer's shares fell 1.3% in the evening session, exposing extreme buyer fatigue. SpaceX officially moved toward the public markets, filing documents with regulators for an unprecedented IPO. The large?scale offering, slated for mid?June 2026, promises to break all Wall Street records. In preparing for the listing the company intends to raise tens of billions of dollars, restructuring and separating its rocket?launch, Starlink satellite communications and AI?development segments. Global financial venues quickly priced in de?escalation.

After weeks of crisis in the Strait of Hormuz, commodity markets are actively shedding the war premium. A pronounced fall in oil prices has shifted investor sentiment from stagflationary fears back toward growth assets. Nevertheless, the bond market continues to dictate terms, constraining central banks' room for maneuver. Long?term yields have settled at multi?year highs — notably, the 30?year US Treasury yield reached 5.20%. This strong inflationary pressure forced President Donald Trump to noticeably soften his public rhetoric and tone down demands for immediate monetary easing from the Fed.

Expect tough action from Kevin Warsh? Any mention of rate cuts disappeared from the Fed's May minutes published yesterday. The released FOMC minutes confirmed the uncompromising stance of the US regulator. Officials effectively struck easing scenarios from the agenda, shifting the focus to discussion of another round of rate hikes should price pressures remain persistent. Structural overheating of the economy is forcing the committee to act preemptively ahead of Kevin Warsh's official start as Fed chair.

A fresh Reuters consensus survey conducted May 14–19 also recorded a radical reversal in expert expectations. The overwhelming majority of economists acknowledged that the inflationary shock from the Iran conflict will be prolonged, causing the Fed to abandon easing plans this year.

• Of 101 specialist analysts, 83 strongly forecast that the policy rate will be held in the 3.50%–3.75% corridor at least through the end of Q3.
• A month earlier only 50% of respondents held that position.
• In April more than two?thirds of experts expected at least one rate cut by year?end.
• In May their share fell below 50%.
• Nearly 50% of the panel are confident the regulator will keep the status quo until the start of 2026.
• About one?third allow for a symbolic step down in December.
• Four economists explicitly forecast a rate hike.

Against this backdrop, the futures market already prices a 35% probability of a 25?bp move up by the end of January, and the 10?year US Treasury yield pierced a one?year peak at 4.6%.

Bank of America calls the wait?and?see stance the base case, stressing that real easing is pushed into next year. The internal Fed debate has hardened: although at the April meeting some officials still argued to keep hints of cuts, the protracted geopolitical conflict with Iran has consolidated a hawkish majority. Experts agree that future Fed chair Kevin Warsh will ignore Trump's pressure and will not pursue aggressive monetary stimulus.

The PCE inflation gauge underpins this rigidity, having accelerated to 3.5% year?on?year — the highest since May 2023, and well above the 2% target. Analysts are forced to revise forecasts downward for the third time in a row. Expected PCE:

• 3.9% in Q2
• 3.7% in Q3
• 3.4% by year?end

Although 86% of economists still consider this spike temporary, BMO Capital Markets warns that the global system has entered a phase of permanent shocks, where old forecasting models no longer work. The macro backdrop remains stable: unemployment is projected at 4.3% and average GDP growth around 2%.

A US recessionary facade. Daniel Jones (Seeking Alpha) finds clear signs of a latent recession in US macro data. Beneath a glossy exterior lie labour?market weakness, rising corporate bankruptcies and household financial stress. Local successes in manufacturing cannot reverse the overall negative trend: employment in construction and industrial production is showing a sharp decline, and private investment in fixed capital in the industrial segment collapsed by 18.3% from Q1 2025 to Q1 2026.

The current AI boom merely camouflages massive economic impotence. Up to 39% of US GDP growth is now attributable to investments in artificial intelligence, yet the real return on these technologies remains minimal for the vast majority of companies. The White House's hands are effectively tied: a colossal budget deficit and an astronomical government debt?to?GDP ratio deprive the government of fiscal room to launch major stimulus as conditions deteriorate.

21 May

21 May, / New Zealand / Trade balance in April / prev.: -365.0 mln / actual: 698.0 mln / forecast: 842.0 mln / NZD/USD – up

The trade balance reflects the difference between the value of a country's exports and imports. In the prior period, the figures showed a marked improvement, moving from a deficit to a surplus. Analysts expect the positive balance to widen further in the April report. Actuals above market expectations would indicate strong export performance and support the New Zealand dollar.

21 May, 02:00 / Australia / S&P Global manufacturing PMI (May) / prev.: 49.8 pts / actual: 51.3 pts / forecast: 50.6 pts / AUD/USD – down

Last month, Australia's manufacturing PMI rose above the neutral 50 mark. However, much of that increase was driven by longer delivery times amid the Middle East conflict rather than by firm underlying demand. New orders fell, production contracted at the fastest pace in 16 months, and firms reported job cuts and a sharp rise in costs. The May report is expected to show some slowing. Confirmation of the forecast would point to persistent structural issues in the sector and weigh on the Australian dollar.

21 May, 02:50 / Japan / Trade balance in April / prev.: 44.3 bln / actual: 667.0 bln / forecast: 29.7 bln / USD/JPY – up

Japan's trade surplus in March widened thanks to export strength, which hit a historic high due to strong demand from:

• China
• the European region Imports also accelerated significantly, supported by government measures to bolster the domestic market.

Nevertheless, the final surplus was significantly weaker than initial market expectations. The April release is forecast to show a material decline in the positive balance. If realized, this would weaken the yen.

21 May, 02:50 / Japan / Orders for machinery and equipment in March / prev.: 13.7% / actual: 24.7% / forecast: 4.5% / USD/JPY – up

Orders for machinery and equipment in Japan showed a robust increase at the start of the year — somewhat below the previous month's dynamics but well above long?term historical averages. Analysts expect a sharp slowdown in the March figure. If actuals fall toward the forecast, this would confirm weak corporate activity and weigh on the yen.

21 May, 03:30 / Japan / S&P Global manufacturing PMI (May) / prev.: 51.6 pts / actual: 55.1 pts / forecast: 54.5 pts / USD/JPY – up

Japan's manufacturing PMI rose in April to its highest level in several years. The pickup in production and inflow of new orders was largely driven by precautionary stockpiling amid the Middle East conflict. At the same time, firms faced delivery delays, sharply rising costs and were forced to raise selling prices. The May report is expected to show a moderate slowdown. Confirmation of the forecast would still indicate a high level of industrial activity and put upward pressure on USD/JPY.

21 May, 04:30 / Australia / Employment change in April / prev.: -27.7k / actual: 52.5k / forecast: 40.0k / AUD/USD – down

Full?time employment in Australia rose in March, fully offsetting the prior month's decline. Strong labor demand persists despite macro pressure from the international conflict. April's report is expected to show some slowdown in hiring. If the forecast is confirmed, this would point to cooling in the labor market and weaken the Australian dollar.

21 May, 10:30 / Germany / S&P Global manufacturing PMI (May) / prev.: 52.2 pts / actual: 51.4 pts / forecast: 51.0 pts / EUR/USD – down

Germany's manufacturing PMI corrected down from March's multi?year high. Although output and new orders increased, manufacturers expect production to fall in the coming months due to the fallout from the Middle East conflict. Businesses cite:

• rising cost inflation
• supply disruptions
• overall uncertainty

Commodity price growth hit multi?year highs. The May report is expected to show further slowing in activity. Confirmation would weigh on the euro.

21 May, 11:00 / Eurozone / S&P Global manufacturing PMI (May) / prev.: 51.6 pts / actual: 52.2 pts / forecast: 51.9 pts / EUR/USD – down

The eurozone's manufacturing PMI reached multi?year highs in April, showing:

• record production growth
• an inflow of new export orders

The positive momentum was largely driven by precautionary stockpiling amid energy and logistics shocks. At the same time, logistics chains came under strain and employment continued to fall. Input cost inflation hit multi?month highs, denting business confidence. The May release is forecast to show a decrease in the index. If data match forecasts, this will confirm a slowdown in industrial expansion and weaken the euro.

21 May, 11:30 / United Kingdom / S&P Global manufacturing PMI (May) / prev.: 51.0 pts / actual: 53.7 pts / forecast: 53.0 pts / GBP/USD – down

The UK manufacturing PMI showed solid growth in April, hitting multi?year highs thanks to strong domestic and export demand. New orders boosted output, yet the escalation of the Middle East conflict and the closure of the Strait of Hormuz exacerbated logistical problems. This led to a sharp rise in commodity prices and pushed business optimism to annual lows. The May release is forecast to show a moderate decline. Realization of the forecast would signal cooling industrial optimism and weigh on the pound.

21 May, 12:00 / Eurozone / Construction output in March / prev.: -4.1% / actual: -1.9% / forecast: -2.6% / EUR/USD – down

Construction output in the eurozone fell 1.9% year?on?year in February, showing some moderation in the pace of decline compared with the prior month. The sector's dynamics remain weaker than long?term historical averages. Analysts expect the negative trend to deepen in March. Confirmation would indicate ongoing weakness in the sector and weigh on the euro.

21 May, 13:00 / United Kingdom / CBI industrial trends (May) / prev.: -27 pts / actual: -38 pts / forecast: -40 pts / GBP/USD – down

The CBI industrial trends survey recorded a sharp drop in order books in April to the lowest levels seen in recent months. Amid the Iran war, firms' price expectations posted a record monthly surge since records began in the mid?1970s. This led to:

• a collapse in business optimism
• cuts to companies' investment plans for capital expenditure and training
• The May report is forecast to show further deterioration. If confirmed, this would underscore a deep crisis in the sector and put pressure on the pound.

21 May, 15:30 / US / Building permits (m/m) in April / prev.: 11.0% / actual: -11.4% / forecast: 0.5% / USDX (6?currency USD index) – up

Monthly building permits in the US plunged in March, fully reversing strong prior momentum. The current decline was considerably worse than long?term averages. Analysts expect the figure to return to modest growth in April. Confirmation would signal a recovery in construction activity and strengthen the US dollar.

21 May, 15:30 / US / Housing starts in April / prev.: -3.0% / actual: 10.8% / forecast: -3.5% / USDX (6?currency USD index) – down

Housing starts in March posted double?digit month?on?month growth, recovering from February's decline and well exceeding long?term historical averages. The April report is forecast to show a reversal to contraction. If data match expectations, this would indicate cooling construction activity and weigh on the dollar.

21 May, 15:30 / US / Initial jobless claims (weekly) / prev.: 199k / actual: 211k / forecast: 210k / USDX (6?currency USD index) – up

Initial claims for unemployment benefits in the first week of May showed a moderate increase, with continuing claims also rising. Despite this, overall figures remain well below historical averages, confirming labor market resilience and low layoff intensity even amid technical delays from partial government shutdowns. Analysts expect current trends to persist. Realization of the forecast would support the US dollar.

21 May, 15:30 / US / Philadelphia Fed manufacturing index (May) / prev.: 18.1 pts / actual: 26.7 pts / forecast: 18.0 pts / USDX (6?currency USD index) – down

The Philadelphia Fed's manufacturing activity index unexpectedly surged to a multi?month high in April, significantly beating gloomy market forecasts. The rise was driven by a sharp increase in shipments and new orders, although the employment subindex turned negative. Inflationary pressures also intensified as input and output price measures hit local highs. The May report is expected to show a pullback. Confirmation of the forecast would signal a slowdown in the region's manufacturing impulse and weigh on the dollar.

21 May, 16:45 / US / S&P Global manufacturing PMI (May, final) / prev.: 52.3 pts / actual: 54.5 pts / forecast: 54.0 pts / USDX (6?currency USD index) – down

The final S&P Global US manufacturing PMI for April recorded the fastest expansion in the sector in years. Output accelerated, and domestic orders increased amid active stockpiling due to logistics disruptions. Export activity continued to contract due to tariffs and geopolitics. Rising costs led to:

• employment declines at firms
• a sharp rise in selling prices

The May release is expected to show a modest decrease. If confirmed, this would signal stabilization of activity at more moderate levels and weigh on the US dollar.

21 May, 17:00 / Eurozone / Consumer confidence index (May) / prev.: -16.4 pts / actual: -20.6 pts / forecast: -20.8 pts / EUR/USD – up

The preliminary consumer confidence index for the eurozone in April fell sharply, hitting a multi?year low amid rising geopolitical uncertainty. Disruptions to energy supplies and the associated inflationary pressure have increased households' concerns about further rate hikes. This has worsened assessments of household finances and reduced spending. The May report is expected to keep the index at low levels. If the forecast is confirmed, this will signal entrenched pessimism and lead to a firmer euro.

22 May

22 May, 02:01 / United Kingdom / GfK consumer confidence index (May) / prev.: -21 pts / actual: -25 pts / forecast: -28 pts / GBP/USD – down

The GfK consumer confidence index in the UK fell to -25 points in April, marking the steepest decline in a year. The sharp deterioration reflects growing public concern about the economic consequences of the escalation in the Middle East. Pessimism affected both assessments of personal finances and views on the UK economy's prospects. With rising fuel prices putting pressure on household budgets, analysts expect further declines in May. Confirmation of the forecast will indicate greater vulnerability in the consumer sector and weaken the pound.

22 May, 02:30 / Japan / Consumer inflation growth in April / prev.: 1.3% / actual: 1.5% / forecast: 1.8% / USD/JPY – down

Japan's annual inflation rate accelerated to 1.5% in March, rebounding from multi?month lows. The main drivers were:

• higher transport costs amid Middle East tensions
• rising prices for household goods and communications services

Food inflation slowed thanks to stabilizing rice prices, and government subsidies restrained utility costs. Core inflation also rose but remained below the central bank's target. The April report is forecast to show further acceleration in consumer prices. If actuals match the forecast, this will signal strengthening inflationary pressure and support the yen.

22 May, 09:00 / Germany / GfK consumer climate index for June (leading) / prev.: -28.1 pts / actual: -33.3 pts / forecast: -34.0 pts / EUR/USD – down

Germany's consumer climate index fell sharply in May, reaching a multi?month low. The leading indicator reflects growing pressure on household budgets from higher energy costs, which undermines expectations about:

• incomes
• the national economy's prospects

Consumers' willingness to make major purchases dropped to two?year lows, while propensity to save remained high. The June report is expected to keep the index at low levels. If confirmed, this will indicate further cooling in consumer activity and weigh on the euro.

22 May, 09:00 / Germany / GDP growth in Q1 / prev.: 0.3% / actual: 0.4% / forecast: 0.3% / EUR/USD – down

Germany's economic growth in Q1 is expected to slow from 0.4% to 0.3% year?on?year. Current expansion rates remain well below long?term historical averages. The next release is forecast to show continued moderate dynamics at current levels. If the final figure confirms the forecast, this will indicate a lack of significant economic momentum and weigh on the euro.

22 May, 09:00 / United Kingdom / Retail sales growth in April / prev.: 1.8% / actual: 1.7% / forecast: 1.3% / GBP/USD – down

UK retail sales rose 1.7% year?on?year in March, a slight revision from the previous month. Current retail turnover sits near historical averages, showing relative stability in the consumer sector. The April report is expected to show a more noticeable slowdown in commercial activity. Confirmation would signal cooling domestic demand and weaken the pound.

22 May, 11:00 / Germany / Ifo business climate index (May) / prev.: 86.3 pts / actual: 84.4 pts / forecast: 84.2 pts / EUR/USD – down

Germany's Ifo business climate index fell sharply in April to its lowest level since the pandemic. The decline in business sentiment reflects worsening:

• assessments of current conditions
• expectations about the future due to the Middle East conflict

Negative dynamics were recorded across all key sectors — manufacturing, trade, construction and services — with logistics suffering the largest losses. Analysts expect the index to stabilize in May. If actuals match the forecast, this will confirm persistent depressed business sentiment and weigh on the euro.

22 May, 14:00 / Canada / CFIB business activity index (May) / prev.: 55.7 pts / actual: 58.5 pts / forecast: 57.4 pts / USD/CAD – up

Canada's long?run business activity index showed a solid rebound in April after a sharp prior?month decline. Short?term business optimism also improved modestly, with gains recorded in:

• retail trade
• services
• construction

Transport and hospitality, however, faced deterioration. At the same time, inflation accelerated to multi?month highs and wage growth picked up. The May report is expected to show a slight correction. If confirmed, this will indicate moderately positive business sentiment and weigh on the Canadian dollar.

22 May, 15:30 / Canada / Retail sales growth in March / prev.: 1.4% / actual: 3.8% / forecast: 1.5% / USD/CAD – up Canadian retail sales accelerated markedly in February, posting the strongest growth in the past six months. Turnover still lags long?term averages but points to a notable rise in consumer activity. The March report is forecast to show a sharp slowdown. Confirmation of the forecast would signal cooling domestic demand and weigh on the loonie.

22 May, 15:30 / Canada / Producer inflation growth in April / prev.: 5.6% / actual: 7.8% / forecast: 10.0% / USD/CAD – down

Canada's producer price index jumped sharply year?on?year in March to a multi?year high. The main driver of industrial inflation was an unprecedented rise in precious?metal prices on world markets. The April report is forecast to show further acceleration in wholesale prices. If realized, this would increase pressure on consumer prices and strengthen the Canadian dollar.

22 May, 17:00 / US / University of Michigan consumer sentiment index (May) / prev.: 53.3 pts / actual: 49.8 pts / forecast: 48.2 pts / USDX (6?currency USD index) – down

US consumer sentiment hit a historic low in early May amid growing concerns about the high cost of living. Declining assessments of current conditions were driven by higher gasoline prices and protectionist tariffs, which pressure personal finances and deter big purchases. Despite a slight easing in inflation expectations, overall consumer mood remains deeply depressed. If final data confirm the forecast, this will cement long?term US pessimism and weaken the dollar.

21 May, 15:00 / United Kingdom / Speech by Martin Taylor, Bank of England Financial Policy Committee / GBP/USD

21 May, 18:00 / United Kingdom / Speech by Andrew Bailey, Governor, Bank of England / GBP/USD

22 May, 17:00 / US / Speech by Christopher Waller, Governor, Federal Reserve Board / USDX

Speeches by senior central bank officials are also scheduled on these days. Their comments typically trigger volatility in currency markets as they can indicate regulators' future policy intentions.

S&P 500 vs Treasury yield dynamics

Fed officials have begun openly discussing the possibility of raising the fed funds rate. The prevailing view is that if inflation remains above the 2% target, monetary restraint will be required. The bond market greeted that debate with relief — if the Fed were not even discussing tightening, inflation might accelerate out of control. With the central bank perceived as engaged, Treasury yields retreated from recent highs and offered relief to equities.

Investors had high expectations for NVIDIA's earnings, and the company did not disappoint. Q1 revenue rose by 85% to $81.6bn, and net income more than tripled to $58.3bn, beating Wall Street estimates. Still, investors recognize that the leader faces tougher conditions ahead: competition is intensifying, and chip buyers are exploring alternatives.

As a result, NVIDIA has outperformed the S&P 500 year-to-date but has lagged some other semiconductor names. Goldman Sachs reports that the semiconductor group's share of the S&P 500 market cap hit a record 19%.

S&P 500 and NVIDIA dynamics

That concentration is worrying: reliance on a handful of names can end badly — the dot-com crisis is the textbook example, when dominant sector leaders plunged by 25% within six months of their peak in 2000.

Parallels do not end there. Over the past four years, the S&P 500 has averaged annual gains of about 23%, close to the 27% seen a quarter-century ago. Forward P/E for current S&P 500 constituents stands at 20.7, above the 10-year average of 19. A similar pattern was in place prior to the dot?com collapse.

Rumors of a bubble are circulating, but a greater risk may be stagflation in the US economy, or an aggressive Fed tightening cycle to curb high prices.

Technically, the daily chart shows that the S&P 500 bounced off a moving average and returned to the breakout-bar high. The next key test is the pivot at 7,460. Its breakout would generate a buy signal, while a retreat would favor selling.

It is clear the regulator finds itself in a situation where it is impossible to both cut and raise rates at the same time, and that is why it is doing nothing. The minutes state that nearly all committee members voted to keep the policy rate unchanged. The sole exception was one participant who voted for a 25?basis?point cut out of concern that policy might be too tight and the labor market could soften.

More importantly, a majority of Fed officials explicitly acknowledged that a rate hike could become necessary if inflation remains persistently above 2%. This is no longer an abstract scenario — it is the official position recorded in the minutes.

The inflation picture offers little cause for optimism. The Fed notes rising prices for energy, transportation, airfares and a range of goods — all direct consequences of the Middle East conflict and tariff pressures. The labor market formally remains stable, but job growth is weak, and the Fed worries that even a small deterioration in consumer demand could quickly push unemployment up. Economic activity, meanwhile, continues to expand — driven primarily by consumer spending and AI?related investment.

Markets reacted to the minutes as expected: expectations for rate cuts have shifted further out, and the probability of a hike in 2027 has risen to roughly 30%. For the dollar, this is mildly positive — the Fed's wait?and?see stance amid persistent inflation supports the US currency better than any hints of easing. Some committee members still allow for cuts later this year if inflation begins to abate and the labor market weakens. In other words, everything again hinges on the Strait of Hormuz and the situation in the Middle East, which may continue to sustain an energy shock and price pressures for some time.

As I noted above, there was no significant reaction in the FX market to the minutes.

Technical outlook for EUR/USD

Buyers now need to focus on taking out the 1.1610 level. Only that would allow a test of 1.1635. From there, a move up to 1.1660 is possible, but doing so without support from big players will be difficult. The ultimate target is 1.1690. On the downside, I would expect serious buying interest only around 1.1590. If there is no one there, it would be prudent to wait for a new low at 1.1570 or to open long positions from 1.1550.

Technical outlook for GBP/USD

Pound buyers need to take the nearest resistance at 1.3415. Only then can they aim for 1.3445, above which further progress will be difficult. The ultimate target is around 1.3475. On a downside break, bears will try to take control of 1.3380. If they succeed, a range breakout would inflict serious damage on bulls and push GBP/USD toward 1.3340, with a potential extension to 1.3300.

By 2025, global losses from online scams had reached $442 billion, and the schemes have evolved into a full?blown industry with specialized suppliers, standardized business models and complex supply chains. The epicenter of this ecosystem has become the so?called "guarantee platforms" — marketplaces where thousands of sellers trade personal data, technological infrastructure for deceiving victims and money?laundering services. The largest of them was Huione Guarantee, which processed some $31 billion in transactions and eclipsed even the legendary Silk Road in scale.

Remarkably, most settlements were conducted in Tether's USDT on the TRON blockchain — a setup that allowed operators to circumvent banking AML checks.

In 2025, the US FinCEN designated Huione Group as a major money?laundering organization, Telegram blocked thousands of its channels, and in 2026, the group's chairman was extradited to China. Rather than destroying the system, however, these actions exposed its true nature: new platforms sprang up to replace the shut ones. Xinbi Guarantee, which processed $21 billion in transactions, after being blocked simply recreated channels on the same Telegram and continued operating — now with an audience of over half a million users. Notably, Telegram explained its reluctance to continue blocking by citing concern for the "financial freedom" of Chinese users.

Many experts have repeatedly pointed out that Tether, as a payment mechanism, still faces no real accountability. Analysts insist on a coordinated international mandate requiring messaging platforms to shut down such marketplaces and obliging stablecoin issuers to freeze implicated wallets. For now, however, blocks on the Tron network occur only after criminal cases are opened, and official requests are made by authorities.

Trading recommendations

Bitcoin

Buyers are currently targeting a return to $78,400, which would open a direct path to $80,100, and from there, $81,700 is within reach — a break above which would signal attempts to resume a bull market. On the downside, buyers are expected around $76,500; a drop back below that area could quickly push BTC toward $74,700. The longer?term target would be the $73,100 area.

Ethereum

A clear close above $2,146 opens the direct road to $2,222. The longer?term target is the high around $2,291; surpassing that would indicate strengthening bullish sentiment and renewed buyer interest. On the downside, buyers are expected at $2,084; a fall back below that area could quickly push ETH toward $1,997. The longer?term target would be the $1,911 area.

What's on the chart

• The red lines represent support and resistance levels, where 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.

However, trading on such headlines is becoming increasingly difficult. This week, conflicting reports about the progress of negotiations have sent oil prices swinging up and down by several percentage points.

At the moment, Iran is reviewing a new American draft agreement in response to its 14-point proposal, but there has been no news on their response yet. Meanwhile, Tehran warned that in the event of new attacks from the U.S. or Israel, it would take retaliatory measures not just in the Middle East. Trump stated that a deal will happen—or "we will take some unpleasant actions."

It is important to understand that even a peaceful agreement will not be an instant remedy for the oil market. The CEO of Abu Dhabi National Oil Company, Sultan Al Jaber, stated yesterday that the full recovery of supplies from the region will take time, possibly until 2027, and called the closure of the Strait of Hormuz the most significant supply disruption in history.

According to Goldman Sachs, transporting oil from the Persian Gulf to its destination takes up to 55 days—meaning that stock shortages will persist long after the Strait is opened.

Interestingly, the U.S. oil inventory report was also released yesterday. According to last week's data, inventories decreased by approximately 7.9 million barrels as overseas buyers actively accumulated American oil to offset Middle Eastern shortages.

On the positive side, there have been initial signs of renewed traffic through the Strait: three oil supertankers, according to tracking data, attempted to cross it. Iran reported that 26 vessels passed in the last 24 hours, although its previous reports have significantly diverged from actual estimates.

Regarding the current technical picture of oil, buyers need to reclaim the nearest resistance at $100.40. This will allow targeting $106.80, above which breaking through will be quite challenging. The furthest target will be around $113.40. If oil prices fall, bears will attempt to take control at $92.50. If they succeed, a breakout from this range will deal a significant blow to bulls' positions and push oil down to a low of $86.60, with the prospect of reaching $81.40.

The logic here is straightforward. A potential end to the war and the reopening of the Strait of Hormuz would reduce energy price pressures on inflation and, therefore, the need to keep rates elevated for an extended period. For gold, which does not yield income, this is a positive scenario, as once the situation in the Strait of Hormuz stabilizes, the macroeconomic factors weighing on gold are likely to diminish—and prices may find a bottom. If the route remains closed for an extended period, concerns will shift toward stagflation, a period when precious metals historically perform well.

However, investor optimism remains subdued, and there are good reasons for this. The rhetoric from both sides of the conflict changes too frequently to make serious bets on it. The minutes from the May FOMC meeting, published recently, reminded us that most committee members are prepared to consider a rate hike if inflation continues to sustainably exceed 2%. The yield on 10-year Treasury bonds also remains near its yearly high. Since the start of the war, gold has lost about 14% and has been trading within a narrow sideways range—the market clearly cannot decide which scenario will prevail.

Silver has decreased by 0.2% to $75.73 per ounce. Platinum and palladium also traded lower.

Given the current technical picture, gold buyers need to reclaim the nearest resistance at $4,546. This will allow for targeting $4,607, above which it will be quite challenging to break through. The furthest target will be around $4,656. If gold falls, bears will attempt to take control at $4,481. If they succeed, a breakout from this range will deal a serious blow to the bulls' positions and push gold down to a low of $4,432, with the prospect of reaching $4,401.

For the Eurozone, the consensus forecast for the manufacturing PMI suggests the index will remain near the April level of 52.2, with a slight slowdown to 51.5-52.0. It should be noted that in April, the manufacturing sector posted its best results in nearly 4 years; however, much of that growth was attributed to pre-emptive purchasing in light of supply chain concerns and the war—rather than to real demand growth. This effect may weaken in May.

The situation in the services sector looks much worse: in March, the Eurozone services PMI fell to 50.2—its lowest level since May last year, and the composite PMI for April dropped to 48.8—a 17-month low, indicating a contraction in activity. The May forecast is around 49.5-50.0, meaning the market is once again balancing on the edge between growth and contraction. If the data comes in below 50, the euro will face additional pressure: weakness in the services sector, combined with inflationary pressure, creates the stagflation trap that Nagel and Wunsch warned about in their recent speeches. Conversely, if the PMI surprises with growth above 50, the euro may receive short-term support—the market will interpret this as a signal that the economy is managing the energy shock better than expected.

For the UK, the April picture looked noticeably better. The manufacturing PMI jumped to 53.7—the highest since May 2022—while the services PMI increased to 52.7, significantly exceeding the market expectations of 50.0. The forecasts for May are more cautious: the manufacturing PMI is expected to be around 52.0-52.5, and the services PMI around 51.5-52.0.

It's worth noting that the April growth was also partially explained by the effect of pre-emptive purchases, and the resilience of the May figures will be a real test for the British economy. If the data holds above April levels or at least near them, the pound will have a strong argument for strengthening—especially in light of the recent inflation data, which unexpectedly fell to 2.8%. The combination of soft inflation and strong PMIs could maintain the firmness of the Bank of England's decisions regarding fewer rate hikes, which paradoxically may weaken the pound. If the PMI disappoints, particularly in the services sector, pressure on the pound will increase from both sides.

The bullish momentum in the cryptocurrency market continues to fade. Spot ETFs for Bitcoin and Ethereum are experiencing sustained outflows, signaling that large players are using the recent small upward correction as a convenient moment to exit their positions. BlackRock made a notable move: it transferred 4,986 BTC (approximately $386.2 million) and 28,081 ETH (approximately $59.8 million) to the Coinbase Prime exchange. The transfer of assets to an exchange is traditionally interpreted by the market as a signal of intent to sell, and in this context, it's hard to interpret otherwise.

The developments indicate synchronous pressure from both institutional investors and retail traders: they are selling Bitcoin and Ethereum amid the local price bounce. When the world's largest asset manager consistently moves hundreds of millions of dollars onto an exchange, it creates a strong bearish signal for the entire market. Until the outflows from ETFs turn into inflows and such transfers cease, it is premature to speak of a recovery of a sustainable upward trend.

Regarding the intraday strategy in the cryptocurrency market, the strategy and conditions are outlined below.

Bitcoin

Buying Scenario

Scenario No. 1: I plan to buy Bitcoin today upon reaching an entry point around $77,900, aiming for growth to level $78,500. At around $78,500, I will exit the buy trades and sell immediately on the bounce. Before buying on a breakout, ensure that the 50-day moving average is below the current price and that the Awesome indicator is above zero.

Scenario No. 2: I can buy Bitcoin from the lower boundary of $77,600 if there is no market reaction to its breakout in the opposite direction towards levels $77,900 and $78,500.

Selling Scenario

Scenario No. 1: I plan to sell Bitcoin today upon reaching an entry point around $77,600, with a target for a decline to level $77,300. At around $77,300, I will exit the sell trades and immediately buy back on the bounce. Before selling on a breakout, ensure that the 50-day moving average is above the current price and that the Awesome indicator is below zero.

Scenario No. 2: I can sell Bitcoin from the upper boundary of $77,900 if there is no market reaction to its breakout in the opposite direction towards levels $77,600 and $77,300.

Ethereum

Buying Scenario

Scenario No. 1: I plan to buy Ethereum today upon reaching an entry point around $2,138, targeting growth to level $2,161. At around $2,161, I will exit the buy trades and sell immediately on the bounce. Before buying on a breakout, ensure that the 50-day moving average is below the current price and that the Awesome indicator is above zero.

Scenario No. 2: I can buy Ethereum from the lower boundary of $2,129 if there is no market reaction to its breakout in the opposite direction towards levels $2,138 and $2,161.

Selling Scenario

Scenario No. 1: I plan to sell Ethereum today upon reaching an entry point around $2,129, with a target for a decline to level $2,109. At around $2,109, I will exit the sell trades and immediately buy back on the bounce. Before selling on a breakout, ensure that the 50-day moving average is above the current price and that the Awesome indicator is below zero.

Scenario No. 2: I can sell Ethereum from the upper boundary of $2,138 if there is no market reaction to its breakout in the opposite direction towards levels $2,129 and $2,109.

The price test at 158.95 occurred when the MACD indicator was just beginning to move downward from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair declined by 25 pips.

By the time of today's Asian session, the downward movement was already priced in, and the U.S. dollar maintained its position against the yen despite Trump's statements that he does not want to continue the war with Iran. Investors seem to interpret these words as a signal of reduced geopolitical tension, which traditionally supports risk assets, but the situation with the Japanese yen is a bit different. Even without escalating tensions, the fundamental differences in monetary policy between the U.S. and Japan continue to play a significant role. The Federal Reserve's more hawkish stance compared to the Bank of Japan creates a rate differential that supports the dollar's appeal.

Regarding the intraday strategy, I will focus on implementing Scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy USD/JPY today at an entry point around 159.12 (green line on the chart), with a target for growth at 159.43 (thicker green line on the chart). At level 159.43, I intend to exit the long positions and sell back in anticipation of a 30-35-pip move from the entry point. It is best to resume buying the pair on corrections and significant USD/JPY drawdowns. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from that level.

Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive tests of the price 158.95 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth toward the opposite levels of 159.13 and 159.43.

Selling Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the 158.95 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be level 158.56, where I intend to exit the short positions and immediately buy back in the opposite direction (anticipating a 20-25-pip move in the opposite direction from the level). Sellers may return at any moment; it only takes a hint from the central bank. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from that level.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the price 159.12 when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline toward the opposite levels of 158.95 and 158.56.

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 price test at 1.3395 coincided with the MACD indicator just beginning to move upward from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose to the target level of 1.3422.

The U.S. dollar declined against the British pound following Trump's statements that he does not want to continue the war with Iran and is looking for a deal. This became a significant signal for the financial markets, which had long feared an escalation of the conflict in the Middle East. The U.S. president's comments regarding his desire for a diplomatic resolution and an agreement with Iran were perceived as a reduction in geopolitical tension. Such a de-escalation traditionally has a positive impact on investors' sentiment, particularly those inclined to increase their allocation of risk assets in their portfolios. The British pound, one of the major global currencies, benefited from this trend, gaining additional momentum in its growth against the U.S. dollar.

Today's release of macroeconomic data, which may significantly influence the British pound's exchange rate, is highly anticipated by market participants. The publication of purchasing managers' indices (PMIs) for the manufacturing, services, and composite sectors will provide valuable insights into the state of the British economy. These indicators are leading indicators that reflect business sentiment and trends in key industries, enabling predictions of future economic developments. The services sector PMI is particularly significant, as it accounts for the largest share of the nation's GDP. Consistent growth or stagnation in this segment could be a decisive factor in shaping the tone of the Bank of England's future statements on monetary policy.

In addition to the macroeconomic releases, attention will be drawn to the speech of Bank of England Monetary Policy Committee member Alan Taylor. The tone of his remarks and hints at future interest rate changes toward increases could support the British pound in its growth against the U.S. dollar.

Regarding the intraday strategy, I will focus on implementing Scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy the pound today upon reaching an entry point around 1.3439 (green line on the chart), targeting growth to level 1.3466 (thicker green line on the chart). At point 1.3466, I intend to exit the market and sell back, anticipating a 30-35-pip move from the entry point. Strong pound growth can only be expected after positive data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from that level.

Scenario No. 2: I also plan to buy the pound today if the price tests 1.3424 twice in a row, when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth toward the opposite levels of 1.3439 and 1.3466.

Selling Scenarios

Scenario No. 1: I plan to sell the pound today after the 1.3424 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be level 1.3395, where I intend to exit the short positions and immediately buy back in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). Pressure on the pound may return at any moment. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from that level.

Scenario No. 2: I also plan to sell the pound today if two consecutive tests of the price 1.3439 occur while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline toward the opposite levels of 1.3424 and 1.3395.

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 price test at 1.1611 coincided with the MACD indicator just beginning to move upward from the zero mark, confirming the correct entry point for buying euros. As a result, the pair rose by 20 pips.

The euro reacted positively to Trump's statements about the progress of negotiations with Iran. The minutes from the U.S. Federal Reserve meeting did not bring significant changes to the balance of power in the currency market. Tensions in the Persian Gulf related to the Iranian issue remain a top concern and directly influence the currency market. Any escalation in the situation could lead to a sharp rise or a strengthening of the dollar, prompting traders to react to every Trump statement.

Today, important data regarding the purchasing managers' index (PMI) for the manufacturing sector in the Eurozone for May are expected in the first half of the day, as well as the PMI for the services sector. Investors and analysts will pay close attention to the manufacturing PMI, as it reflects sentiments and trends in one of the key sectors of the economy, and its dynamics often serve as a precursor to changes in other sectors. Values above 50 typically signal growth, while values below indicate a decline.

Data on the current account balance from the European Central Bank, to be released shortly thereafter, provides information on trade in goods and services and capital flows. A positive balance may indicate the Eurozone's competitiveness on the international stage, while a deficit could raise concerns about external imbalances. A significant divergence from economists' forecasts is sure to trigger a reaction in the currency market.

Regarding the intraday strategy, I will focus on implementing Scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: Today, euros can be bought when the price reaches around 1.1631 (green line on the chart), with a target for growth to level 1.1661. At point 1.1661, I plan to exit the market and sell euros back, anticipating a move of 30-35 pips from the entry point. Strong euro growth can only be expected after positive data from the Eurozone. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from that level.

Scenario No. 2: I also plan to buy euros today if the price tests 1.1617 twice in a row, when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth toward the opposite levels of 1.1631 and 1.1661.

Selling Scenarios

Scenario No. 1: I plan to sell euros once the price reaches 1.1617 (red line on the chart). The target will be level 1.1589, where I intend to exit the market and immediately buy back in the opposite direction (anticipating a 20-25-pip move in the opposite direction from the level). Pressure on the pair may return at any moment today. Important! Before selling, ensure the MACD indicator is below the zero line and just beginning to decline from that level.

Scenario No. 2: I also plan to sell euros today if the price tests 1.1631 twice in a row, with the MACD indicator in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline toward the opposite levels of 1.1617 and 1.1589.

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 and the pound reacted positively to news that negotiations with Iran are progressing well, with the key problematic issue being disagreements over the nuclear program. Traders welcomed signals indicating a potential decrease in geopolitical tension in the region, which typically supports risk assets. However, despite the optimism, the ongoing disagreements over the Iranian nuclear program and the situation in the Strait of Hormuz prevent any claims of a complete resolution. This means that increased volatility in the currency market is likely to persist, and further movements of the euro, the pound, and other risk assets will depend on the development of negotiations and other factors affecting the global economy.

Regarding reports, key economic indicators for the Eurozone are expected to be released today. In the first half of the day, data on the Eurozone manufacturing purchasing managers' index (PMI) for May will be published. This indicator is one of the most important barometers of the economy, reflecting production, employment, and business expectations in the industry. Alongside the manufacturing sector, special attention will be paid to the PMI for the services sector. Since the services sector accounts for a significant share of the Eurozone's GDP, its dynamics are critical for assessing the region's overall economic health. Given that activity in this sector has been declining in recent months, the euro may face new challenges.

In addition to the PMI indices, the publication of data on the European Central Bank's balance of payments current account is also on the agenda. This information provides insight into a country or region's trade balance, capital flows, and other financial operations, which can shed light on the Eurozone's external economic positions and potential impact on the exchange rate.

As for the pound, the situation there could also change dramatically, as important data similar to those in the Eurozone are forthcoming. Traders will closely monitor the release of key PMI activity indices in the UK, which will serve as indicators of the state of the British economy at the beginning of the second quarter.

First and foremost, attention will be on the publication of the manufacturing sector's PMI data. This indicator, which reflects the state of this crucial sector of the economy, will provide insight into how well the industry is coping with current challenges, including potential consequences of the war in the Middle East. Equally important will be the release of the PMI for the services sector. Given the significant share of services in the UK's GDP, the dynamics of this indicator are vital for shaping the overall picture of economic activity. Growth or stagnation in this sector could have a substantial impact on the evaluation of the British economy's prospects and the British pound.

If the data matches economists' expectations, it would be best to act based on the Mean Reversion strategy. If the data significantly exceeds or falls short of expectations, it is best to use the Momentum strategy.

Momentum Strategy (on Breakout):

For the EUR/USD Pair

Long positions on a breakout of level 1.1635 may lead to a rise in the euro to the area of 1.1659 and 1.1678;

Short positions on a breakout of level 1.1609 may lead to a drop in the euro to the area of 1.1585 and 1.1555;

For the GBP/USD Pair

Longs on a breakout of level 1.3444 may lead to a rise in the pound to the area of 1.3473 and 1.3505;

Shorts on a breakout of level 1.3410 may lead to a drop in the pound to the area of 1.3379 and 1.3344;

For the USD/JPY Pair

Longs on a breakout of level 159.15 may lead to a rise in the dollar to the area of 159.40 and 159.65;

Shorts on a breakout of level 158.85 may lead to a sell-off of the dollar to the area of 158.55 and 158.25;

Mean Reversion Strategy (on Return):

For the EUR/USD Pair

Shorts will be sought after a failed breakout beyond 1.1638 on a return below this level;

Longs will be sought after a failed breakout beyond 1.1610 on a return to this level;

For the GBP/USD Pair

Shorts will be sought after a failed breakout beyond 1.3448 on a return below this level;

Longs will be sought after a failed breakout beyond 1.3414 on a return to this level;

For the AUD/USD Pair

Shorts will be sought after a failed breakout beyond 0.7145 on a return below this level;

Longs will be sought after a failed breakout beyond 0.7095 on a return to this level;

For the USD/CAD Pair

Shorts will be sought after a failed breakout beyond 1.3775 on a return below this level;

Longs will be sought after a failed breakout beyond 1.3748 on a return to this level;