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

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

General Picture of BTC/USD on 1D

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

General Picture of BTC/USD on 4H

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

Trading Recommendations for BTC/USD:

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

Explanations for Illustrations:

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

The S&P 500 and Nasdaq continue to reach fresh highs, driven by a powerful tailwind from the artificial-intelligence technology boom. Investors are aggressively accumulating tech names and largely overlooking rising Middle East risks. The widening conflict has already pushed energy prices sharply higher, but so far, that inflationary impulse has not derailed Wall Street's broad bullish trend.

The flip side is pressure in fixed income: US Treasury prices are falling as yields and inflation expectations tick up. Higher oil traditionally signals tighter monetary policy ahead, forcing market participants to balance defensive and risk assets. For volatility traders, these price swings create trading opportunities: using instruments such as those offered by InstaForex, it is possible to hedge exposure effectively by combining trades in energy and equity index futures. Follow the link for more details.

Semiconductors in focus amid political threats

The US equity market is showing remarkable resilience, using any news flow as an excuse to push to new record levels. The main beneficiaries remain chip and semiconductor producers — suppliers of the hardware backbone for global digitalization. Capital continues to flow into this segment, leaving it materially ahead of the broader market and creating localized pockets of investor overheating.

Nonetheless, the market faces the risk of a sharp sentiment reversal driven by geopolitics. Strong rhetoric from Donald Trump on Iran could instantly sober buyers, shifting focus from corporate earnings to international risk. Analysts warn that further escalation could trigger a rapid and deep correction in the S&P 500, given how sensitive prices are to unpredictable shocks today. Follow the link for more details.

Narrow US job growth amid AI?infrastructure ambitions

Official US labor market data paints a picture of deceptive stability that is increasingly worrying macroeconomists. A detailed read of April's figures shows that employment gains were very narrow, concentrated in just a few sectors, while the rest of the economy stagnated. Such dispersion often acts as an early warning of an upcoming recession, signaling structural weakness hidden behind upbeat headline numbers.

Against this ambiguous backdrop, the US government is making a strategic bet on technology, announcing large-scale public investment to build national AI infrastructure. This step aims to secure technological sovereignty and support growth, but underlying labor market problems could limit the policy's real economic impact. During releases of such mixed data, major FX pairs typically see sharp swings. Follow the link for more details.

Macro and corporate reports weigh on crypto market

Bitcoin continues to trade in an environment of elevated uncertainty, showing high sensitivity to external shocks. Escalation in the Middle East has triggered capital outflows from high-risk assets, hitting BTC positions. At the same time, macro pressure is compounded by adjustments within the traditional financial sector that are restricting new institutional liquidity into digital assets.

The corporate side of the crypto industry adds further headwinds. Mixed — and in some cases weak — financial results from public mining companies and crypto exchanges point to falling margins. Analysts view these signals as worrying for the wider ecosystem: without strong corporate performance and fresh capital inflows, it will be difficult for the market to establish a durable driver for a renewed, broad-based bullish run. Follow the link for more details.

There are a few macroeconomic reports scheduled for Wednesday. In the Eurozone, reports on industrial production for March and the second estimate of GDP for the first quarter will be released. We do not consider this data significant, and the market has been ignoring nearly all macroeconomic factors for the past three months. A vivid example of this is the recent reports on inflation, the labor market, and unemployment in the US. Geopolitics remains the primary focus, and the market is no longer ready to respond with movements of hundreds of points to yet another unsubstantiated statement from Trump. However, it is precisely geopolitics that keeps the market in check. In the US, the Producer Price Index will be released today, but we already reviewed inflation yesterday. As expected, it is rising rapidly.

Analysis of Fundamental Events:

Among the fundamental events on Wednesday, we can highlight the speeches of Christine Lagarde and representatives from the European Central Bank (Lane, Buch), the Bank of England (Mann), and the Federal Reserve (Kashkari, Logan Collins). However, the positions of all central banks on monetary policy are well known to traders, and the market is currently ignoring fundamentals and macroeconomic factors. There is no expectation of a decrease or increase in the Fed's key interest rate in the coming months, while the ECB and the BoE may tighten policy if the situation in the Middle East does not improve and inflation continues to accelerate.

The geopolitical backdrop has begun to change, but unfortunately, words continue to say one thing while facts indicate another. In the past seven days, the ceasefire has been violated three times, and the latest round of negotiations has failed miserably. The parties have agreed to continue dialogue, but if there is no progress, the conflict will resume sooner or later.

General Conclusions:

During the third trading day of the week, both currency pairs may trade rather sluggishly. In fact, both the euro and the pound have been trading in a flat or near-flat movement for several weeks. The euro can be traded today in the range of 1.1745-1.1754, while the British pound can be traded in the ranges of 1.3587-1.3598 and 1.3456-1.3476; however, volatility may again be low. We await new developments related to the conflict between Iran and the US.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or breakout of the level). The less time it took, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from this level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, it is preferable to trade signals from the MACD indicator only in the presence of good volatility and a trend that is confirmed by a trend line or trend channel.
5. If two levels are too close together (5-20 pips apart), treat them as a support or resistance zone.
6. After a move of 15 pips in the right direction, a Stop Loss should be set to breakeven.

What is on the Charts:

Price levels (areas) of support and resistance – levels that are targets when opening purchases or sales, or sources of signals.

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

MACD indicator (14, 22, 3) – histogram and signal line – a supporting indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be done as cautiously as possible, or one should exit the market to avoid a sharp price reversal against the preceding movement.

Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and sound money management are key to long-term trading success.

1-Hour Chart of the GBP/USD Pair:

The GBP/USD pair continued its downward movement on Tuesday, which began on Monday, largely due to geopolitical pressure and the threat of a stalled mythical deal between Iran and the US. Yesterday, an important US inflation report was published, but the market ignored it, just as it had ignored the Nonfarm Payrolls and unemployment reports from Friday. Thus, we can once again say that the market is disregarding macroeconomic and fundamental backgrounds. Inflation in the US rose to 3.8%, which could pressure the Federal Reserve to raise interest rates in 2026, but in practice, this is unlikely. Kevin Warsh, who will soon head the Fed, is expected to maintain "dovish" views, and the US labor market has not fully recovered—any new policy tightening would again put pressure on jobs and businesses. Therefore, rising inflation does not yet indicate that the Fed will adopt a more "hawkish" stance. As a result, the dollar cannot rely on strong strengthening.

5-Minute Chart of the GBP/USD Pair:

On the 5-minute timeframe, one trading signal for selling was formed on Tuesday. At the very beginning of the European trading session, the pair broke through the area of 1.3587-1.3598, prompting a decline of 50-60 pips during the day. By the end of the day, beginner traders could have closed their trades manually several times for a good profit.

How to Trade on Wednesday:

On the hourly timeframe, the GBP/USD pair maintains an upward trend, but it has been trading with a sideways bias for almost a month. Without a serious escalation in the Middle East, the dollar cannot be expected to rise as it did in February-March. Individual events may still provoke their strengthening, but overall, the geopolitical factor has weakened its influence on the market. The British currency retains excellent upward prospects according to the daily and weekly timeframes.

On Wednesday, beginner traders may open short positions targeting the 1.3456-1.3476 area if the pair bounces from the 1.3587-1.3598 area. A bounce from the 1.3456-1.3476 area will allow for opening long positions targeting 1.3587-1.3598.

On the 5-minute timeframe, the following levels can be traded: 1.3175-1.3180, 1.3259-1.3267, 1.3319-1.3331, 1.3380-1.3386, 1.3456-1.3476, 1.3587-1.3598, 1.3695, and 1.3741-1.3751. Today, the UK economic calendar is completely empty, while in the US, the Producer Price Index will be released, which, after yesterday's inflation report, essentially means nothing.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or breakout of the level). The less time it took, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from this level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, it is preferable to trade signals from the MACD indicator only in the presence of good volatility and a trend that is confirmed by a trend line or trend channel.
5. If two levels are too close together (5-20 pips apart), treat them as a support or resistance zone.
6. After a move of 15 pips in the right direction, a Stop Loss should be set to breakeven.

What is on the Charts:

Price levels (areas) of support and resistance – levels that are targets when opening purchases or sales, or sources of signals.

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

MACD indicator (14, 22, 3) – histogram and signal line – a supporting indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be done as cautiously as possible, or one should exit the market to avoid a sharp price reversal against the preceding movement.

Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and sound money management are key to long-term trading success.

1-Hour Chart of the EUR/USD Pair:

The EUR/USD currency pair continued to decline on Tuesday, but the hourly chart shows the decline is weak and not impactful. The dollar received market support at the beginning of the week amid geopolitical tensions between Iran and the US, but it did not show significant growth. Recall that on Monday, it was reported that Donald Trump rejected the peace agreement proposed by Iran, and on Tuesday, the US President stated that the deal with Tehran is at risk of collapse. Once again, Trump's statements triggered market movements. However, how truthful these statements are remains an open question. Regardless, the dollar did not strengthen significantly because the geopolitical factor no longer affects traders as it did a month or two ago. The market understands that Trump's statements are significant, but they shouldn't be taken at face value 100%. Therefore, the reaction has been subdued, and the dollar cannot count on a new trend.

5-Minute Chart of the EUR/USD Pair:

On the 5-minute timeframe, one sell signal was generated on Tuesday, and movements throughout the day were weak. During the American trading session, the price consolidated below the 1.1745-1.1754 area, but we did not see a significant decline. There were no losses on the trade, but it was also unlikely to achieve a profit.

How to Trade on Wednesday:

On the hourly timeframe, the upward trend persists, but the euro is struggling to reverse. The rise of the US currency has halted, as the conflict in the Middle East is in a "quiet mode," but the European currency is also not in a hurry to rise, as negotiations are progressing very slowly, there is no official information, and both sides regularly violate the terms of the ceasefire.

On Wednesday, beginner traders may open short positions targeting the 1.1655-1.1666 area if the price bounces from the 1.1745-1.1754 area. New long positions can be considered if the price consolidates above the 1.1745-1.1754 area, targeting 1.1830-1.1837.

On the 5-minute timeframe, the levels to consider include 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527-1.1531, 1.1584-1.1591, 1.1655-1.1666, 1.1745-1.1754, 1.1830-1.1837, and 1.1899-1.1908. On Wednesday, industrial production and the second estimate of first-quarter GDP will be published in the EU, while the US will release the Producer Price Index. We consider all three reports to be secondary and do not expect a market response to them.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or breakout of the level). The less time it took, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from this level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, it is preferable to trade signals from the MACD indicator only in the presence of good volatility and a trend that is confirmed by a trend line or trend channel.
5. If two levels are too close together (5-20 pips apart), treat them as a support or resistance zone.
6. After a move of 15 pips in the right direction, a Stop Loss should be set to breakeven.

What is on the Charts:

Price levels (areas) of support and resistance – levels that are targets when opening purchases or sales, or sources of signals.

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

MACD indicator (14, 22, 3) – histogram and signal line – a supporting indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be done as cautiously as possible, or one should exit the market to avoid a sharp price reversal against the preceding movement.

Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are key to long-term trading success.

The GBP/USD currency pair also declined sharply on Tuesday, which many view as the start of a new cycle of US dollar strength amid the lack of an agreement between Iran and the US. In our opinion, this is not the case at all.

First, it should be understood that even if the dollar lacks any growth factors, it does not mean it will fall every day. Second, individual geopolitical events and news can occasionally strengthen the US currency. Third, the character of the GBP/USD pair's movement in recent weeks resembles a "roller coaster." The price is constantly tossed around, making Tuesday's decline insignificant. Fourth, long-term trends remain upward, so we expect only growth for the British currency. Fifth, the geopolitical factor has an expiration date, and in the case of the Middle Eastern conflict, that date is nearly up. It is worth noting that the Middle East conflict is not the only conflict in the world over recent years and decades, nor is it the only one to have significantly impacted the energy market. As time passes, the world learns to live in a new reality.

Thus, the first thing to note is that the dollar still lacks reasons for prolonged growth. The Bank of England may raise the key rate at its next meeting alongside the European Central Bank. The Federal Reserve is very unlikely to implement any form of monetary tightening in 2026. Donald Trump's policies, in and of themselves, are already a significant reason to sell the dollar. The trade war is not over. The US economy is growing more weakly under Trump than it did under Joe Biden. Therefore, what basis is there to expect long-term growth for the US currency? It can also be added that the upward trends on the daily and weekly timeframes remain intact, and Trump sees a cheap dollar as the solution to all of the US's problems.

While the British pound also has very few reasons for growth, it continues to appear much more attractive in the long term than the dollar. It should also be understood that cycles exist in the market. The US dollar rose for about 15-16 years against its main competitors. It cannot continue to grow indefinitely. A new cycle presumably began in 2022, which Trump effectively supported. Thus, we view the decline of the British pound on Tuesday as a common pullback within the framework of a nearly sideways movement.

Of course, if the war in the Middle East resumes, one could expect a new strengthening of the US currency. But it would not be strong enough to break global trends. Thus, the dollar could strengthen to 1.3367. For this, it would not even need substantial reasons—just a typical technical correction. However, after the correction finishes, the trend will resume. Even another political crisis in the UK will not matter, as everyone has grown accustomed over the past 10 years to the fact that no Prime Minister stays at 10 Downing Street for long.

The average volatility of the GBP/USD currency pair over the last 5 trading days is 98 pips, which is considered "average" for this pair. On Wednesday, May 13, we expect the pair to move within the range limited by the levels of 1.3422 and 1.3618. The upper channel of the linear regression has turned upward, indicating a recovery of the upward trend. The CCI indicator has not generated signals recently.

Nearest Support Levels:

S1 – 1.3489

S2 – 1.3428

S3 – 1.3367

Nearest Resistance Levels:

R1 – 1.3550

R2 – 1.3611

R3 – 1.3672

Trading Recommendations:

The GBP/USD currency pair continues its recovery after two months of geopolitical uncertainty. Trump's policies will continue to put pressure on the US economy, so we do not expect the US currency to grow in 2026. Therefore, long positions with a target of 1.3916 and above remain relevant when the price is above the moving average. If the price is below the moving average line, short positions can be considered with targets at 1.3489 and 1.3428 on technical grounds. In recent weeks, the British currency has recovered, and the influence of geopolitical factors on the market has decreased.

Explanations for the Illustrations:

• Linear Regression Channels help identify the current trend. If both are pointing in the same direction, it indicates a strong trend.
• The Moving Average Line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should currently proceed.
• Murray Levels serve as target levels for movements and corrections.
• Volatility Levels (red lines) indicate the likely price channel in which the pair will trade over the coming days, based on current volatility metrics.
• CCI Indicator: Its entry into the oversold area (below -250) or the overbought area (above +250) signifies that a trend reversal in the opposite direction is approaching.

The EUR/USD currency pair unexpectedly fell on Tuesday. Recently, optimism regarding the Iran-US peace agreement among investors and traders in financial markets had been exceedingly high. We have repeatedly pointed out that this optimism lacks any solid foundation. Simply put, Iran and the US can hold new rounds of negotiations every two days, but what good does it do if the parties cannot reach an agreement? Tehran can propose anything: a temporary halt to uranium enrichment, an agreement to allow international experts to oversee its nuclear facilities, and promises not to produce uranium for ballistic missiles. But what is the point if Trump demands complete denuclearization? Washington can also propose anything: lifting sanctions, paying reparations, unfreezing Iranian assets, lifting the blockade on Iranian ports, and allowing oil trade. But there is no sense in that either, because Iran is not ready to abandon uranium, and the US is not willing to give up its main demand, which is the reason the war in the Middle East began.

As a result, the negotiations may continue for several months or even years. Maintaining optimism and hope for a positive outcome during such a lengthy period is extremely difficult. Meanwhile, crude oil inventories in strategic reserves worldwide are steadily declining. In a month or two, they could simply run out. Then the world will face a new wave of rising energy prices, and along with it, the inflation spiral will continue to escalate. Thus, the last month and a half of the ceasefire has provided a temporary pause for the entire world. If the situation with the Strait of Hormuz is not resolved soon, oil prices could soar to $150 per barrel. And this is still far from the most pessimistic scenario.

However, there is some good news. The euro, along with the British pound, experienced a sharp decline on Tuesday, which many experts quickly associated with the market's waning patience. The deal is not being signed, the Strait of Hormuz remains blocked—how much longer must we wait? Nonetheless, we do not believe that the decline in the euro and the pound on Tuesday was linked to market discontent over the Middle East peace agreement. Looking at the movements of both currency pairs over the past weeks, it is clear that the direction of movement frequently changes, and there is no pronounced trend. In other words, Tuesday's movements fit well within the characteristics of previous weeks.

It is important to remember that not every movement has a specific reason behind it. It is a mistake to try to explain every market movement by certain events. Yesterday, a large bank might have executed a significant transaction to buy dollars necessary for its operational activities, not to profit from currency fluctuations and not because faith in the peace agreement in the Middle East has run out. Therefore, we would not be surprised if the euro and pound appreciated again today.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of May 13 is 66 pips, which is "average." We expect the pair to trade between 1.1667 and 1.1799 on Wednesday. The upper channel of the linear regression has flattened, indicating a possible trend change to the upside. In fact, the upward trend for 2025 could have resumed a month ago. The CCI indicator has entered the overbought zone and has formed two "bearish" divergences, which warned of the beginning of a downward correction that is likely already complete.

Nearest Support Levels:

S1 – 1.1719

S2 – 1.1658

S3 – 1.1597

Nearest Resistance Levels:

R1 – 1.1780

R2 – 1.1841

R3 – 1.1902

Trading Recommendations:

The EUR/USD pair retains its upward trend amid the weakening influence of geopolitics on market sentiment and diminishing geopolitical tensions. The global fundamental backdrop for the dollar remains extremely negative, so we continue to expect long-term growth in the pair.

If the price is positioned below the moving average, short positions can be considered with targets at 1.1667 and 1.1658 on technical grounds. Above the moving average line, long positions are relevant with targets at 1.1841 and 1.1902. The market continues to distance itself from geopolitical factors, and the dollar continues to lose its only source of growth.

Explanations for the Illustrations:

• Linear Regression Channels help identify the current trend. If both are pointing in the same direction, it indicates a strong trend.
• The Moving Average Line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should currently proceed.
• Murray Levels serve as target levels for movements and corrections.
• Volatility Levels (red lines) indicate the likely price channel in which the pair will trade over the coming days, based on current volatility metrics.
• CCI Indicator: Its entry into the oversold area (below -250) or the overbought area (above +250) signifies that a trend reversal in the opposite direction is approaching.

The GBP/USD currency pair declined sharply on Tuesday, following a decline the day before. As noted yesterday, it became known about another violation of the ceasefire between Iran and the US, as well as another failure in negotiations. Additionally, Keir Starmer's party suffered a crushing defeat in local elections, and another political crisis seems to be brewing in Britain, with yet another Prime Minister preparing to resign. Last night, Donald Trump mentioned the possibility that the deal with Iran could fall through, adding to the uncertainty. US inflation surged to 3.8% in April, slightly increasing the likelihood of at least one Federal Reserve interest rate hike this year. All of these events favored the US dollar, driving the GBP/USD pair down by 120 pips. One could say that the British pound got off lightly.

On the hourly timeframe, the upward trend has been formally invalidated as the price consolidated below the Senkou Span B line. However, the movements of recent weeks resemble a flat structure, so we wouldn't make sudden conclusions above the 1.3465-1.3480 area. The pound has fallen for two consecutive days, but there is no basis for a long-term decline. If the flat structure is indeed present, the British currency could return to 1.3645 this week.

On the 5-minute timeframe, three trading signals for selling were formed on Tuesday. Early in the European trading session, the price breached the critical line, enabling short positions to be opened. The pair then crossed below the Senkou Span B line and later bounced off it, allowing traders to maintain their short positions. By evening, the trades could have been closed for a profit of about 50 pips.

GBP/USD 4H Analysis

On the 4-hour timeframe, we analyze according to the ICT trading system. The exchange rate of the British pound correlates closely with the euro, similar to the relationship between Ethereum and Bitcoin. Therefore, patterns and signals from EUR/USD should always be considered. The trend on the 4-hour timeframe is also upward, with the CHOCH line passing through the 1.3511 level; only below this level can we say the upward momentum is exhausted. Until this time, we will only look for buy signals. It should be noted that there is a probability of a flat structure with possible boundaries at 1.3511 and 1.3656. If this is the case, a deviation around the 1.3511 level could form, sending the pound back up. We do not yet consider the upward trend to be broken; the likelihood of new growth in the pair on the 4-hour timeframe remains quite high. Therefore, we are not considering the last bearish FVG. If the upward trend is indeed broken, then patterns such as Order Blocks and FVG will come into play, from which short positions could be considered.

GBP/USD 1H Analysis

On the hourly timeframe, the GBP/USD pair continues to form an upward trend, which could be invalidated if the British pound consolidates below the Ichimoku indicator lines. The influence of geopolitics continues to wane; the market no longer pays close attention to all news from the Middle East, and the dollar has lost its only significant support.

For May 13, we highlight the following important levels: 1.3096-1.3115, 1.3179-1.3187, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681, and 1.3751-1.3763. The Senkou Span B line (1.3550) and Kijun-sen line (1.3577) may also be sources of signals. It is recommended to set a Stop Loss at break-even once the price moves 20 pips in the correct direction. The Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals.

On Wednesday, no significant events are scheduled for the UK, while the US will release the Producer Price Index, which is certainly less important than yesterday's inflation report, which the market ignored.

Trading Recommendations:

Today, traders may consider short positions if the price consolidates below the 1.3465-1.3480 area, targeting the 1.3377 level. Long positions can be opened on a bounce from the 1.3465-1.3480 area, targeting the Ichimoku indicator lines. On the 4-hour timeframe, long positions can be held if a deviation, as previously mentioned, forms.

Explanations for the Illustrations:

• Support and Resistance Levels – Thick red lines at which market movement may end. These are not sources of trading signals.
• Kijun-sen and Senkou Span B Lines – Lines from the Ichimoku indicator transferred from the 4-hour timeframe to the hourly timeframe. These are considered strong lines.
• Extreme Levels – Thin red lines from which the price has previously bounced. These are sources of trading signals.
• Yellow Lines – Trend lines, trending channels, and any other technical patterns.
• CHOCH – Change of the trend structure.
• Liquidity – Liquidity, Stop Loss, and pending orders that market makers use to build their positions.
• FVG – Fair Value Gap. The price rapidly passes through such areas, indicating a complete absence of one party in the market. Subsequently, the price tends to return and react to these areas in alignment with the main trend.
• IFVG – Inverted Fair Value Gap. After returning to such an area, the price does not react from it; instead, it impulsively breaks through and then tests it from the other side.
• OB – Order Block. The candle on which the market maker opened a position aimed at capturing liquidity to form their position in the opposite direction.

The EUR/USD currency pair sharply fell on Tuesday after failing to break above the 1.1786 mark. As before, geopolitical factors played a significant role. Donald Trump stated late Monday that the deal with Iran is under threat of collapse, and the sides cannot agree on the terms of a peace agreement. Trump has decided not to withdraw from negotiations, but it is clear that war in the Middle East could resume at any moment. Against this understanding, demand for the US currency began to rise again. We do not believe the dollar can form a whole new trend, but individual geopolitical events might still support it. Significant strengthening of the American currency should only be expected in the event of a full-scale war in the Middle East.

On the hourly timeframe, it is evident that the 1.1786 level was too much for the bulls to handle. Currently, the price is still holding above the Senkou Span B line, maintaining upward prospects. However, if geopolitical factors continue to deteriorate, the pair is bound to decline. In this case, the trend on the hourly timeframe will shift back to a downward trend.

On the 5-minute timeframe, the pair moved lower throughout the day, but profits were hard to realize. The first signal was formed when the price consolidated below the 1.1750-1.1760 area, but the Ichimoku indicator lines were already below it, so opening short positions made little sense. These lines were not breached until the evening.

EUR/USD 4H Analysis

On the 4-hour timeframe, according to the ICT trading system, the situation is quite clear as well. There is an upward trend, with the CHOCH line at 1.1723; only below this level can we consider the upward momentum exhausted. As long as the upward trend persists, we will focus only on bullish patterns, signals, and liquidity grabs. Just yesterday, a liquidity grab for buying occurred. Therefore, a new wave of upward movement may begin today. However, to execute this, new bullish patterns are needed. If liquidity grabs do not occur, the decline may continue, and in that case, the upward trend will be broken. A downward trend will begin, and traders will be able to consider bearish patterns for opening short positions.

EUR/USD 1H Analysis

On the hourly timeframe, the EUR/USD pair maintains an upward trend. The situation in the Middle East remains tense, but it is not getting significantly worse; therefore, there are no strong reasons to further strengthen the US dollar. The dollar had every opportunity to show growth on Friday, but the market once again ignored important macroeconomic reports. The only potential hindrance to the pair's further rise could be geopolitical factors.

For May 13, we highlight the following trading levels: 1.1362, 1.1426, 1.1542, 1.1615-1.1625, 1.1657-1.1666, 1.1750-1.1760, 1.1830-1.1837, and 1.1907-1.1922, as well as the Senkou Span B line (1.1726) and Kijun-sen line (1.1760). The Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. Don't forget to set a Stop Loss order to break even if the price moves 15 pips in the correct direction. This will protect against potential losses if the signal turns out to be false.

On Wednesday, the EU will publish reports on industrial production and GDP, along with the US Producer Price Index. We consider all three reports to be secondary and do not expect a market reaction to them. Yesterday, another important inflation report was published, but the market again ignored it.

Trading Recommendations:

Today, traders may open short positions if the price consolidates below the Senkou Span B line, targeting the 1.1657-1.1666 area. Long positions can be opened if the price does not break below the Senkou Span B line, targeting 1.1750-1.1760 and 1.1786.

Explanations for the Illustrations:

• Support and Resistance Levels – Thick red lines at which market movement may end. These are not sources of trading signals.
• Kijun-sen and Senkou Span B Lines – Lines from the Ichimoku indicator transferred from the 4-hour timeframe to the hourly timeframe. These are considered strong lines.
• Extreme Levels – Thin red lines from which the price has previously bounced. These are sources of trading signals.
• Yellow Lines – Trend lines, trending channels, and any other technical patterns.
• CHOCH – Change of the trend structure.
• Liquidity – Liquidity, Stop Loss, and pending orders that market makers use to build their positions.
• FVG – Fair Value Gap. The price rapidly passes through such areas, indicating a complete absence of one party in the market. Subsequently, the price tends to return and react to these areas in alignment with the main trend.
• IFVG – Inverted Fair Value Gap. After returning to such an area, the price does not react from it; instead, it impulsively breaks through and then tests it from the other side.
• OB – Order Block. The candle on which the market maker opened a position aimed at capturing liquidity to form their position in the opposite direction.

In my recent reviews, I have repeatedly discussed the Strait of Hormuz blockade, potential reopening dates, conditions for reopening the strait, and the consequences of the blockade for the world. Unfortunately, these topics can be described as pessimistic not only for the markets but for the entire world. Simply put, positive news is scarce, and the market is gradually shedding its unbridled and unfounded optimism.

Most people have likely heard of the TACO principle. It posits that Trump always backs down. In practice, this looks like this: the US President threatens someone, makes ultimatums, but then either gets what he wants and backs down or does not get what he wants and also backs down. I would call this scenario, which repeats time and time again, not TACO, but rather just a typical poker bluff. Trump is a player at the poker table. The goal of the game is to defeat all opponents. Bluffing is one of the tools for victory.

The first year of the controversial Republican's presidency showcased the TACO principle in full swing multiple times. How many times did Trump threaten to impose new tariffs, leave NATO, start a military intervention, or seize certain territories? Every week. In this way, the American President "tests" his opponent. By the response, one can determine whether to expect a "piece of someone else's pie" or whether to change the target of attack.

Many countries around the world have shown that taking a piece of their pie is quite possible. Once Trump understood this, he would grab a piece twice as large. Not all governments backed down before the White House, and the TACO principle did not always work. But every time Trump backed down, he only confirmed the principle's effectiveness.

What does the NACHO principle entail? It states that the Strait of Hormuz will not reopen until the economic damage becomes critical. The question is—critical for whom? I remind you that the Strait of Hormuz is under blockade by the US and Iran. Iran has been accustomed to living in poverty for decades, without adequate healthcare, education, communication, and development. Thus, the loss of income from oil sales is a serious blow to it, but it will not be fatal enough to cause the country to fall, nor will Tehran rush to sign a deal on Trump's terms. The US is reaping enormous profits from increased oil and gas sales at inflated prices. One could argue that Washington benefits more from the Strait of Hormuz blockade than from a war in the Middle East.

Wave Picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument remains within an upward segment of the trend (see the lower chart), while in the short term, it is within a corrective structure. The corrective wave setup appears to be quite complete and may take on a more complex, extended form. The geopolitical backdrop in the Middle East may cause a decline in the instrument in the near future, so caution is advised when buying. I expect the instrument to continue to rise with targets around the 19th figure.

Wave Picture for GBP/USD:

The wave picture for the GBP/USD instrument has become clearer over time, as I anticipated. We now see a clear five-wave upward structure on the charts, which may be completed soon. If this is indeed the case, we can expect a corrective wave setup to form after wave 5 completes. Wave 5 may be completed around the 1.3699 mark, corresponding to 76.4% on the Fibonacci. If geopolitics continues to progress toward long-term peace, the bullish segment of the trend may take on a more extended form. Therefore, the combination of waves and geopolitical developments will determine the pound's fate in the coming weeks.

Key Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to act on and often undergo changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There can never be 100% certainty in the direction of movement. Do not forget about protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

However, in the current circumstances, it is not the EUR/USD decline that is surprising, but rather its relatively limited nature, given that many fundamental factors currently favor the greenback.

I would like to remind you that last week, the market was driven by optimism about the prospects of resolving the Middle Eastern conflict. Influential media outlets published reassuring insider information, suggesting that the US and Iran were close to signing a memorandum that would secure a ceasefire, partially lift sanctions pressure on Tehran, and serve as a basis for a broader negotiation process. Additionally, there were active rumors in the press that the parties might transition to an in-person format for direct negotiations as early as this week, which was perceived as a signal of diplomatic progress.

However, this week, market optimism has dissipated as the US President rejected Iran's latest counter-proposal, calling it "absolutely unacceptable." Commenting on the negotiations, Donald Trump stated that the ceasefire regime (in effect since April 8) is "on life support." In other words, the peace process is effectively on the verge of collapse.

Adding fuel to the fire, Axios and CNN insiders reported that the President is considering renewing active military operations. This not only refers to escorting vessels through the Strait of Hormuz but also to potential airstrikes on Iranian facilities.

Tehran, for its part, threatened to increase uranium enrichment to 90%, effectively reaching weapons-grade levels, in response to any new military strikes from the US.

Against this backdrop, Israeli Prime Minister Benjamin Netanyahu stated that military confrontation with Iran "will not end as long as the country possesses highly enriched uranium stocks."

In other words, geopolitical tensions have once again increased, while negotiations between the US and Iran are essentially at a standstill.

Yet, despite such a grim fundamental backdrop, the EUR/USD pair remains within the 17th figure and has not even tested the aforementioned support level at 1.1690.

In my opinion, traders are maintaining a cautiously optimistic outlook ahead of Trump's upcoming visit to China, set to begin on May 13. The market still hopes that this visit will at least partially stabilize the global agenda, primarily through a possible extension of the US-China trade truce and by leveraging Beijing's influence over Tehran to de-escalate the Middle Eastern crisis.

This optimism remains very fragile. If the negotiations in China do not yield tangible results, the market will start to price in the risks of a renewed trade war. Concurrently, the US rhetoric towards Iran may once again become significantly more aggressive. In such a scenario, the dollar would strengthen across the market, and the EUR/USD pair would consolidate below the 1.1690 support level.

However, an alternative scenario is also possible, in which Washington and Beijing demonstrate readiness for further dialogue, and tensions around Iran gradually decrease (including due to China's mediating efforts). In this case, the EUR/USD pair could approach the 18th figure again, potentially testing the 1.1810 resistance level (the upper line of the Bollinger Bands indicator on the D1 timeframe).

The intrigue remains, and the stakes are very high. Therefore, traders are reluctant to open large positions in favor of or against the dollar.

Market participants essentially ignored the US CPI growth report published on Tuesday, despite nearly all components showing positive results (the overall consumer price index accelerated to 3.8% year-on-year, while the core index rose to 2.8% year-on-year). This indicates that the geopolitical agenda is currently "in a league of its own," overshadowing macroeconomic factors. In such a high level of uncertainty, the most prudent strategy is to maintain a wait-and-see position, as the balance of risks could shift at any moment in favor of or against the dollar.

Dynamics of the Treasury Yield Curve

According to MUFG, Warsh may push the FOMC towards monetary expansion, but most officials are unlikely to heed him. Indeed, strong employment data from April signals stabilization in the US labor market. At the same time, a rise in consumer prices to 3.8% and core inflation to 2.8% compels the Fed to consider increasing the federal funds rate.

Against this backdrop, the "hawkish" rhetoric from European Central Bank officials and the pleasant surprise from the German investor sentiment index fade. Encouraged by the potential for a peace agreement between the US and Iran, ZEW respondents raised their business sentiment prospects. Current conditions continued to deteriorate.

Dynamics of Investor Sentiment in Germany

MUFG claims that EUR/USD bulls should not get carried away by this. The historical pattern seems to spiral. The euro was expected to drop significantly, as it did at the beginning of the armed conflict in Ukraine.

The primary reason for the regional currency's resilience is the absence of the energy crisis that plagued 2022. Gas prices have not risen as high as they did four years ago. However, the depletion of blue fuel reserves could cause the main currency pair to stumble into old pitfalls — falling to parity.

Pressure on EUR/USD could stem from the plummeting political ratings of German Chancellor Friedrich Merz. He was met with jeers in parliament after presenting a strict austerity proposal involving cuts to healthcare spending and a structural overhaul of the pension system. Attempts to bring order to the coalition and his own party have yet to yield positive results. Merz risks following in the footsteps of Keir Starmer, whose position as Prime Minister of Britain has become shaky, leading to sell-offs in the pound.

Neither the economy nor politics is in favor of the euro. The US dollar, by contrast, may benefit from rising oil prices and accelerating inflation. As long as the Strait of Hormuz remains closed, the probability of Brent prices increasing is much higher than the chances of them decreasing. This power dynamic in the oil market risks igniting US inflation and prompting the Fed to raise rates.

Technically, the EUR/USD is continuing to trade within the fair-value range of 1.1680-1.1780 on the daily chart. The bulls' failed attempts to breach the upper boundary of the trading channel have been ongoing for 5 days now. A drop in the euro below $1.1735 will provide a reason for selling.

Oil prices have surged as negotiations between the US and Iran fall apart, the Strait of Hormuz is effectively blocked, and supplies are in chaos. Brent is already up about 2% and may exceed $106 per barrel.

Oil is rising again, largely due to the precarious situation with Iran. No one is sure if a ceasefire can be quickly reached, which is making markets nervous and pushing prices higher.

Monday began with American indices hitting record highs, driven by rising energy prices and AI-related companies. At the same time, yields on Treasury bonds have slightly increased.

Trump, in the Oval Office, stated to reporters that the ceasefire with Iran could collapse and that he does not intend to reduce pressure until Tehran abandons its nuclear program. The US leader referred to Iran's latest response as "a piece of garbage." Following this, shipping in the Strait of Hormuz has been virtually paralyzed, and oil prices have soared further.

In response to the US proposal, Iran demanded the removal of the naval blockade and the easing of sanctions, while wanting to maintain control over passage through the strait. As a result, Brent has gained about 2%, and there are already talks that the price could exceed $106 per barrel.

This has also fueled concerns about inflation: 10-year Treasury yields have risen about 2 basis points to around 4.43%. Trump claimed that a new military operation has not yet been confirmed and that diplomacy is still possible, but Tehran does not seem ready to make concessions—the Iranians continue to maintain control over the strait and periodically attack American targets.

All of this confirms the complete failure of every attempt to end this protracted conflict. This war, which has shaped the global energy crisis, creates political risks for Trump and the entire Republican Party.

To relieve some pressure on American drivers, Trump decided to suspend the gasoline tax. While it seems reasonable, such a broad gesture will cost the US budget billions of dollars each month. Meanwhile, the Department of Energy released 53.3 million barrels from strategic reserves, including through traders and involving refiner Marathon Petroleum.

The Wall Street Journal, citing unnamed sources, reported that the UAE allegedly conducted attacks on Iran last month. The US Treasury has also imposed sanctions on a dozen companies and individuals linked to the sale of Iranian oil to China. Companies from Hong Kong, the UAE, and Oman have been included in these lists.

It is evident that one of the topics for the upcoming negotiations between Trump and Xi Jinping at the end of this week will be Iran. Reports indicate that the leaders of the two countries intend to discuss the money China receives from Tehran and potential arms exports. This is a highly sensitive topic, so the meeting will receive close attention.

Saudi Aramco CEO Amin Nasser stated that global markets are losing about 100 million barrels a week due to the closure of the Strait of Hormuz. Analysts at Saxo Bank note that the oil market is tightening: the chances for a quick restoration of passage through the strait are diminishing.

The market is also focused on reports from the EIA, IEA, and OPEC, which will be released in the coming days to finally clarify the picture of supply and demand.

There are rumors in the market that gold is no longer seen as a safe haven but as an asset that protects against macro risks. Stagflation is an unfavorable backdrop for XAU/USD, as in such a situation, central banks prefer to focus on raising rates. This leads to increased bond yields and strengthens currencies. The precious metal loses its advantage in the debasement trade, causing its price to decline.

Dynamics of Gold

If a combination of slowing economic growth and high inflation leads to a recession, gold could shine with renewed brilliance. According to UBS Investment Bank, the precious metal could set new record highs in 2026, closing at $5,600 per ounce due to macroeconomic uncertainty. This uncertainty boosts demand for diversification of investment portfolios and increases interest from both the public and private sectors.

The World Gold Council (WGC) estimates that in April, there was a capital inflow of 45 tons into gold-focused ETFs. Following an outflow of 84.3 tons in March, this is a positive sign for XAU/USD. The WGC notes that the reserves of specialized exchange-traded funds increased to 4,137 tons, the third-highest on record, following a record 4,176 tons set in February.

Gold enthusiasts need not worry about the 30 tons of net sales of bars by central banks in March, as it was driven by the activity of certain countries—Russia and Turkey. At the same time, the trend is toward purchases, with Poland, Uzbekistan, Kazakhstan, and, of course, China leading the way. China has been increasing its reserves for 18 consecutive months. However, the share of gold in those reserves is a modest 15%. This figure has room to grow, which is setting a positive tone for XAU/USD.

Gold is preparing for the important release of the US April inflation data. Consumer prices are expected to rise to 3.7%, while core inflation is projected to reach 2.7%. Such dynamics in indicators, coupled with the stabilization of the US labor market, may prompt the Federal Reserve to tighten monetary policy, which would be bad news for the precious metal.

Technically, on the daily chart, gold is consolidating in the $4,650- $ 4,770 range per ounce. It makes sense to bet on the breakout of the trading channel and set pending orders to buy the precious metal at $4,770 and to sell at $4,650. The closing price will be of significant importance. There is a high probability of false breakouts, so it is essential to monitor how XAU/USD closes the trading day.

What is causing the weakness among bulls? The answer is straightforward: geopolitics. The problem is that time is passing, the Strait of Hormuz remains closed, global oil supplies are shrinking, and Iran and the United States are making no progress toward resolving the key issues necessary for signing an agreement.

As a result, the market is gradually beginning to lose faith that any agreement between Tehran and Washington is even possible. A new acronym has even emerged — NACHO ("Not A Chance Hormuz Opens"). In other words: there is virtually no chance that the Strait of Hormuz will reopen.

I previously wrote that there were no signs of a near-term agreement between Iran and the US. I also noted that bulls would struggle to sustain attacks under such an informational backdrop. The bullish impulse has not disappeared completely yet, but it is moving in that direction.

In the current situation, traders looking to open new positions can only wait for the formation of fresh bullish patterns. I still consider the trend bullish. Last week, bulls fell just short of fully working through imbalance 13, but a bullish order block with preliminary liquidity removal was formed instead. This pattern was triggered a few days later and provided another buy signal.

At present, there are no bearish patterns whatsoever, meaning there is no basis for selling the pair even hypothetically. The only thing worth noting is the liquidity grab on the sell side, but a liquidity grab alone is not a pattern — and four days have already passed since then without any visible bearish offensive.

I once again have to point out that the entire rise of the US dollar from January through March was driven solely by geopolitics. As soon as the United States and Iran agreed to a ceasefire, bears immediately retreated, and for more than a month now, bulls have dominated the market.

At present, the ceasefire remains fragile, but negotiations continue, and the chances for peace still exist. I have repeatedly said that I do not believe the bullish trend has ended, despite the break below important trend-defining lows and despite the war involving Iran. Markets often price in the most pessimistic scenario immediately, trying to anticipate the most extreme outcome. Therefore, I allow for the possibility that traders have already fully priced in the geopolitical conflict in the Middle East. If that is the case, the bears may have retreated for quite some time.

The overall chart picture is currently crystal clear. The bullish advance remains intact, but it desperately needs support. Ideally, this support would come from geopolitics — meaning Iran and the United States continue moving toward compromise. However, even without such support, bulls are still capable of continuing their advance. It simply will not be rapid.

The economic backdrop on Tuesday once again attracted little interest from traders. Active trading began in the morning before the US inflation report was even released. The morning economic sentiment indices in Europe went completely unnoticed by the market. Meanwhile, the US Consumer Price Index gave no reason to believe that the Federal Reserve System would move toward monetary tightening anytime soon, which could have supported the dollar.

Bulls still have many reasons to stay active in 2026, and even the outbreak of conflict in the Middle East has not reduced them. Structurally and globally, the policies of Donald Trump — which contributed to the sharp decline of the dollar last year — have not changed.

In the coming months, the US currency may occasionally strengthen amid investor flight from risk, but that factor requires constant escalation in the Middle East conflict. I still do not believe in a sustained bearish trend for EUR/USD. The dollar has received temporary support from the market, but what exactly would allow bears to dominate over the long term?

Economic Calendar for the US and the Eurozone

• Eurozone – Industrial Production Change (09:00 UTC)
• Eurozone – First-Quarter GDP Growth Rate (09:00 UTC)
• United States – Producer Price Index (12:30 UTC)
• Eurozone – Speech by Christine Lagarde (19:15 UTC)

The May 13 economic calendar contains four events, though none are likely to capture major market attention. The impact of the news background on market sentiment on Wednesday is expected to remain weak.

EUR/USD Forecast and Trading Advice

In my view, the pair remains in the process of forming a bullish trend. The information backdrop changed sharply three months ago, but the trend itself cannot yet be considered canceled or completed.

Thus, bulls may continue their offensive in the near future, provided geopolitics does not suddenly shift toward renewed escalation.

Traders previously had opportunities to open long positions based on the signal from imbalance 12, as well as from the order block signal. The upward movement may continue toward this year's highs.

For the euro to rise without obstacles, the conflict in the Middle East must move toward lasting peace, and signs of de-escalation do occasionally appear. For now, however, bullish traders still lack sufficient support for a new impulse move, which is why the advance remains slow and difficult.

However, I would like to point out that this is far from the first pullback in the pound recently. Over the past seven to eight days, Iran and the United States have violated the ceasefire at least three times, each occasion providing moderate support for the US dollar. Therefore, I cannot rule out that rockets were launched again today in the Middle East, or that new bombings took place that have simply not yet appeared in the news feeds. Alternatively, information may have emerged indicating that Iran and the US remain far from signing a comprehensive agreement and are still unable to break the diplomatic deadlock.

In any case, I do not believe the bullish trend is over. It will only be possible to speak about the cancellation of the bullish scenario after bearish patterns appear or bullish patterns become invalidated — neither of which is currently observed.

The situation surrounding the resolution of the Middle East conflict remains uncertain, while traders are still unclear about the next direction of the market. Today it may favor the bulls; tomorrow it may favor the bears. This is exactly the kind of picture we have been observing in recent weeks. At the moment, the bulls maintain the advantage, but if a new escalation occurs, the bears could launch a full-scale offensive.

The pound's rally began with a "Three Drives Pattern." Thus, traders received a bullish signal at the very beginning of the move, and the trend has remained bullish ever since. Currently, the ceasefire in the Middle East remains quite fragile, but the parties involved are still making attempts to reach an agreement, if media reports are to be believed.

At the same time, the market cannot rely indefinitely on news that is not confirmed by facts. Official negotiations may resume, but the conflict itself may also resume. The Strait of Hormuz remains under a dual blockade, while Tehran and Washington appear to have chosen a path toward lifting the blockade — though unsuccessfully so far. The situation is gradually improving, but far too slowly, and this can only be judged from unverified reports. Markets are overflowing with optimism, yet a harsh reality check could arrive at any moment.

The "Three Drives Pattern," marked on the chart with a triangle, allowed bulls to launch an offensive. Imbalance 18 allowed traders to open long positions, imbalance 19 provided another opportunity, and imbalance 20 did so once again. As a result, we have received four bullish signals within the current impulse wave. Geopolitics allowed the bulls to launch another attack, but it could just as easily turn in favor of the bears.

The economic news background on Tuesday was not the reason behind the pound's decline. The first significant US inflation report was released only several hours later, after GBP/USD had already fallen by 90 points. Therefore, geopolitics continues to be the sole factor influencing the market — even if this is not always obvious.

In the United States, the overall background remains such that, from a long-term perspective, little other than further dollar weakness should be expected. Even the conflict between Iran and the US changes little in this regard. Geopolitical tensions forced markets to remember the dollar's safe-haven status for two months, but overall, the long-term outlook for the US currency remains difficult.

The US labor market continues to weaken, the economy is approaching recession, the Federal Reserve — unlike the European Central Bank and the Bank of England — does not intend to tighten monetary policy in 2026, and four major protest movements against Donald Trump have already taken place across the country. In addition, the departure of Jerome Powell could worsen the situation for the dollar even further, especially if the FOMC under Kevin Warsh adopts a more dovish stance.

From an economic standpoint, I see no basis for sustained dollar growth.

News Calendar for the US and the UK

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

The May 13 economic calendar contains only one secondary event. Therefore, the influence of the economic background on market sentiment on Wednesday may be extremely limited.

GBP/USD Forecast and Trading Advice

For the pound, the long-term outlook remains bullish. The "Three Drives Pattern" warned traders about the beginning of the rally, and since then, three additional bullish patterns and signals have formed. Therefore, despite geopolitical risks, I continue to expect further gains for the pound under current conditions.

At the same time, it must be acknowledged that geopolitics could still spoil the bulls' momentum. My target for the pound remains the 2026 high at 1.3867. The reaction to imbalance 20 allowed traders to open long positions for the third or fourth time already. At present, there are no bearish patterns or signals whatsoever.

For GBP/USD, the wave structure continues to indicate the development of an upward trend segment (lower chart), while in the short term the market continues building a structure that was initially interpreted as corrective, but is now viewed as impulsive. Consequently, both major currency pairs are currently within a bullish wave formation.

The rise of the euro and the pound was supported by the ceasefire in the Middle East, which has lasted for about a month (with rare exceptions) and still has every chance of becoming the basis for a full-fledged peace agreement. However, recently the rhetoric of Iranian and US leaders has become more aggressive and uncompromising, which could erase any optimism regarding a peace deal.

The latest bullish wave structure has taken on a five-wave form, and wave 5 may complete its development in the near future. If that is indeed the case, then a corrective structure of at least three waves should follow. Much will depend on developments in the Middle East. If no new escalation occurs and Tehran and Washington continue working toward a final ceasefire, the upward movement of the pair may continue after the correction.

The GBP/USD pair declined by 75 basis points on Tuesday, but all of this decline occurred before the release of the US inflation report. Consumer inflation for April came in at 3.8%, rising by 0.5% year-over-year compared to March. Core inflation accelerated to 2.8%, also exceeding market expectations.

Therefore, inflation is surpassing forecasts, which theoretically could force the Federal Reserve to tighten monetary policy in 2026. At present, the market has almost completely ruled out a rate cut this year, though it also remains skeptical about rate hikes. Nevertheless, it must be acknowledged that hawkish expectations in financial markets have started to grow.

According to the CME FedWatch tool, the probability of a 25-basis-point rate hike by year-end has now risen to 27.5%. Just yesterday, it was below 10%. Inflation is rising, and along with it, hawkish market expectations are increasing as well.

Most likely, the European Central Bank and the Bank of England will also tighten policy, potentially beginning as early as next month. Therefore, the US dollar stands to gain little from rising inflation and the possibility of a US rate hike, since the ECB and Bank of England are unlikely to sit idle while their efforts to stabilize inflation over recent years are undermined.

Based on this, I do not believe in a prolonged rise of the US dollar without a renewed war in the Middle East, and I continue to view geopolitical developments as the primary factor driving movements in the currency market.

General Conclusions

The wave pattern of GBP/USD has gradually become clearer, as I previously expected. We can now see a distinct five-wave upward structure on the charts, which may soon be completed. If that is indeed the case, then a corrective wave sequence should begin after wave 5 is completed.

Wave 5 may end near the 1.3699 level, which corresponds to the 76.4% Fibonacci retracement level. If geopolitical developments continue moving toward a long-term peace agreement, the upward trend segment may become more extended. Therefore, the combination of wave structure and geopolitics will determine the fate of the British pound in the coming weeks.

The higher-timeframe wave count looks nearly perfect, even though wave 4 moved beyond the peak of wave 1. However, it is worth remembering that ideal wave structures exist only in textbooks. In practice, market structures are far more complex. Wave 4 has a classic three-wave form, so after its completion, a new impulsive trend segment began to develop.

Core Principles of My Analysis

1. Wave structures should be simple and easy to understand. Complex structures are difficult to trade and frequently subject to revision.
2. If there is no confidence in current market conditions, it is better to stay out of the market.
3. There can never be absolute certainty regarding market direction. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.

The wave pattern on the 4-hour chart for EUR/USD has changed. There is still no talk of canceling the upward trend segment (lower chart), which began in January of last year, but the trend structure now appears highly ambiguous. In such situations, I always recommend switching to a lower timeframe (upper chart) and focusing on the simplest and smallest wave structures in order to make a short-term forecast, which is more than sufficient for opening trades. Wave structures can become very complex and may imply multiple different scenarios. The easiest approach is to trade according to the standard "five-three" pattern.

In the chart above, I can identify a classic five-wave impulse structure with an extended third wave. After the completion of this structure, a corrective formation of at least three waves began. However, this structure may also take on an impulsive, five-wave form, which is entirely possible. Consequently, I now expect the development of wave 5 with targets located around the 1.1900 level. Geopolitical developments may still alter the wave count.

The EUR/USD pair fell by 40 basis points on Tuesday following new comments from US President Donald Trump regarding Iran. In particular, the White House leader stated that the deal with Iran is at risk of collapsing. Trump noted that the United States does not seek to resume war with Iran, but did not clarify what would happen if diplomacy ultimately reaches a dead end.

And it is highly likely that diplomacy will indeed fail. Let me remind you that Iran's position remains unchanged: first, the lifting of the Hormuz blockade, security guarantees, and the removal of sanctions — only then discussions on the nuclear issue. Washington's position remains directly opposite: first, Iran must completely abandon uranium enrichment and surrender all uranium stockpiles, and only afterward can other issues be discussed. One can only speculate about what negotiations have taken place over the past month if the positions of both sides have not changed at all.

However, the market is gradually beginning to assess the situation more realistically. Over recent weeks, I have repeatedly stated that the chances of a deal between Iran and the United States are extremely slim. Of course, this does not necessarily mean that war will resume in the near future, but the prospect of a prolonged conflict and an extended blockade of the Strait of Hormuz now seems almost certain.

Against the backdrop of deteriorating geopolitics, demand for the US dollar may begin rising again, though I do not believe the EUR/USD pair will fall below its March lows. However, if oil prices climb to $150 per barrel or higher, anything becomes possible. At the moment, the decline in EUR/USD is too weak to be viewed as the start of a new bearish trend segment. Moreover, Donald Trump's rhetoric changes almost daily. Tomorrow we may hear that Iran has accepted Washington's demands and that a deal is about to be signed.

General Conclusions

Based on my EUR/USD analysis, I conclude that the pair remains within a broader upward trend segment (lower chart), while in the short term it remains within a corrective structure. The corrective wave formation appears largely complete, though it could still evolve into a more complex and extended pattern. Geopolitical tensions in the Middle East may trigger further downside pressure in the near future, so caution is advised when considering long positions. For now, I continue to expect further growth toward targets around the 1.1900 level.

On the smaller timeframe, the entire bullish trend segment is visible. The wave structure is somewhat unconventional because the corrective waves differ significantly in size. For example, the higher-degree wave 2 is smaller than the internal wave 2 within wave 3. Nevertheless, such situations do occur. I would also remind traders that it is best to identify clear and understandable structures on charts rather than rigidly tying analysis to every single wave. The most recent waves are difficult to identify, so my analysis relies primarily on the higher timeframe.

Core Principles of My Analysis

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often subject to revision.
2. If there is no confidence in current market conditions, it is better to stay out of the market.
3. There can never be absolute certainty regarding market direction. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.

The test of the 157.52 price level occurred when the MACD indicator was just beginning to move upward from the zero mark, confirming a valid entry point for buying the dollar. As a result, the pair rose by only 15 points.

April US Consumer Price Index data will attract close attention from traders. This indicator, which tracks fluctuations in the prices of a broad range of goods and services, is one of the Federal Reserve's key benchmarks. The most important aspect will be the analysis of core CPI, which excludes the most volatile components such as food and energy prices. This measure is often considered more reliable for assessing long-term inflation trends, which is especially important amid the energy crisis. Analyzing the dynamics of Core CPI will help determine more precisely whether inflationary pressure is stabilizing or intensifying.

In addition to the statistical releases, markets will closely monitor public remarks from Federal Open Market Committee member Austan D. Goolsbee. Any unexpected data or comments could trigger heightened volatility in financial markets.

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

Buy Signal

Scenario No. 1

Today, I plan to buy USD/JPY upon reaching the entry point around 157.67 (green line on the chart), targeting growth toward 158.15 (thicker green line on the chart). Around 158.15, I plan to exit long positions and open short positions in the opposite direction, expecting a 30–35 point reversal move from the level. Expectations for further growth in the pair today are justified if US data comes in strong.

Important: Before buying, make sure the MACD indicator is above the zero mark and just beginning its upward movement from it.

Scenario No. 2

I also plan to buy USD/JPY today if there are two consecutive tests of the 157.50 price level while the MACD indicator is in oversold territory. This would limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 157.67 and 158.15 can then be expected.

Sell Signal

Scenario No. 1

I plan to sell USD/JPY today after a breakout below the 157.50 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 157.16 level, where I plan to exit short positions and immediately open long positions in the opposite direction, expecting a 20–25 point reversal move from the level. Pressure on the pair will return today if US data comes in weak.

Important: Before selling, make sure the MACD indicator is below the zero mark and just beginning its downward movement from it.

Scenario No. 2

I also plan to sell USD/JPY today if there are two consecutive tests of the 157.67 price level while the MACD indicator is in overbought territory. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 157.50 and 157.16 can then be expected.

What's on the Chart

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

Important

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

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.

The test of the 1.3558 price level occurred when the MACD indicator had already moved significantly downward from the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound.

The British pound fell sharply amid intensifying domestic political tensions clouding the UK's economic outlook. It became known that Prime Minister Keir Starmer, contrary to expectations, does not intend to resign without a determined fight for party leadership. Starmer firmly rejected any suggestions of his imminent resignation, calling attempts to remove him destabilizing and emphasizing that such political maneuvering would inevitably lead to serious economic consequences for the country. These remarks came amid growing pressure from opponents who view the government's recent actions as signs of weakness and indecision.

Next, investors and analysts will focus closely on the US Consumer Price Index data for April 2026. This key economic indicator, which tracks price changes across a broad range of goods and services, is one of the Federal Reserve's main benchmarks when making monetary policy decisions. The April report is expected to provide fresh signals regarding the pace of inflation growth in the US economy, which in turn could influence expectations for future interest rates.

In addition to the economic data release, market attention will also be focused on remarks from Federal Open Market Committee member Austan D. Goolsbee. FOMC members are key figures in shaping US monetary policy, and their public statements often contain important hints regarding the regulator's future actions.

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

Buy Signal

Scenario No. 1

Today, I plan to buy the pound upon reaching the entry point around 1.3552 (green line on the chart), targeting growth toward 1.3603 (thicker green line on the chart). Around 1.3603, I plan to exit long positions and open short positions in the opposite direction, expecting a 30–35 point reversal move from the level. Pound growth today can only be expected after weak US data.

Important: Before buying, make sure the MACD indicator is above the zero mark and just beginning its upward movement from it.

Scenario No. 2

I also plan to buy the pound today in the event of two consecutive tests of the 1.3519 price level while the MACD indicator is in oversold territory. This would limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3552 and 1.3603 can then be expected.

Sell Signal

Scenario No. 1

I plan to sell the pound today after a breakout below the 1.3519 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 1.3464 level, where I plan to exit short positions and immediately open long positions in the opposite direction, expecting a 20–25 point reversal move from the level. Pressure on the pound will return today if US data comes in strong.

Important: Before selling, make sure the MACD indicator is below the zero mark and just beginning its downward movement from it.

Scenario No. 2

I also plan to sell the pound today in the event of two consecutive tests of the 1.3552 price level while the MACD indicator is in overbought territory. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3519 and 1.3464 can then be expected.

What's on the Chart

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

Important

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

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.

The test of the 1.1754 price level occurred when the MACD indicator was just beginning to move downward from the zero mark, confirming a valid entry point for selling the euro. As a result, the pair declined by 17 points.

Optimism among German investors failed to support the euro. According to the data, the ZEW Economic Sentiment Index rose to -10.2 in May from -17.2 in April, exceeding economists' expectations. Although the ZEW indicator remains in negative territory, the improvement signals a shift in sentiment. Investors are likely assessing the possibility of easing geopolitical tensions in the Middle East as a factor that could stabilize energy prices and reduce uncertainty weighing on business activity in Germany. Last week saw some escalation, but the absence of a broader regional conflict may have encouraged more optimistic expectations.

Next, market participants will focus on the release of key US inflation data. Traditionally, inflation reports trigger increased volatility across financial markets. Traders will carefully examine every figure, especially core inflation, attempting to predict the future actions of the US regulator. Any deviation from forecasts — whether higher or lower — could significantly alter market expectations regarding future interest rates, which in turn would affect the dollar's exchange rate.

A speech by Federal Open Market Committee member Austan D. Goolsbee is also scheduled for today. Goolsbee's comments could either confirm existing expectations or introduce additional uncertainty, causing noticeable market fluctuations.

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

Buy Signal

Scenario No. 1

Today, buying the euro is possible when the price reaches the 1.1754 level (green line on the chart), targeting growth toward 1.1775. At 1.1775, I plan to exit the market and also sell the euro in the opposite direction, expecting a movement of 30–35 points from the entry point. Expectations for euro growth today are justified only if US data comes in weak.

Important: Before buying, make sure the MACD indicator is above the zero mark and just beginning its upward movement from it.

Scenario No. 2

I also plan to buy the euro today if there are two consecutive tests of the 1.1740 level while the MACD indicator is in oversold territory. This would limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.1754 and 1.1775 can then be expected.

Sell Signal

Scenario No. 1

I plan to sell the euro after the price reaches the 1.1740 level (red line on the chart). The target will be 1.1716, where I intend to exit the market and immediately buy in the opposite direction, expecting a 20–25 point reversal move from the level. Pressure on the pair will return today if US data comes in strong.

Important: Before selling, make sure the MACD indicator is below the zero mark and just beginning its downward movement from it.

Scenario No. 2

I also plan to sell the euro today if there are two consecutive tests of the 1.1754 level while the MACD indicator is in overbought territory. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.1740 and 1.1716 can then be expected.

What's on the Chart

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated Take Profit level or area for manually locking in profits, since further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated Take Profit level or area for manually locking in profits, since further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

Important

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

Remember that successful trading requires a clear trading plan, similar to the one outlined above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.

The euro adopted a wait-and-see stance despite encouraging economic signals from Germany. According to the latest data, optimism among German investors is showing steady improvement, fueled by hopes for a swift resolution to the Middle East conflict. This trend reduces the immediate threat to Europe's largest economy, allowing investors to look to the future with greater confidence.

According to recent figures, the Economic Sentiment Index calculated by the respected ZEW Institute reached -10.2 points in May. This represents a significant improvement from April's reading of -17.2 points. It is worth noting that the current result exceeded analysts' average expectations, which had forecast a reading of -19.5 points. Such growth in optimism suggests that investors are beginning to reassess potential risks and see opportunities for a recovery in economic activity.

The British pound collapsed as a direct consequence of growing domestic political disagreements negatively affecting the United Kingdom's economic situation. According to reports, Prime Minister Keir Starmer, contrary to expectations, does not intend to voluntarily step down and is preparing for a fierce battle over party leadership. His address to cabinet members sounded like an open confrontation with those he believes are trying to remove him from office.

Market participants will next focus on the release of key US inflation data. The Consumer Price Index data for April, as well as the core CPI measure excluding volatile components such as food and energy prices, are expected to become the main drivers of market movements. The figures are expected to come in below March's readings. If the inflation release deviates from economists' forecasts, increased volatility in the currency market is likely.

Also scheduled for today is a speech by Federal Open Market Committee member Austan D. Goolsbee. Statements from central bank representatives are always an important source of information for the market. Attention will focus on any hints or comments regarding inflation trends, the state of the economy, and the outlook for monetary policy. Goolsbee's remarks could either confirm current expectations for interest rate hikes later this year.

In the event of strong economic data, I will rely on implementing the Momentum strategy. If the market shows no 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

• Buying on a breakout above 1.1751 could lead to euro growth toward 1.1786 and 1.1819;
• Selling on a breakout below 1.1724 could lead to euro decline toward 1.1701 and 1.1678;

For GBP/USD

• Buying on a breakout above 1.3557 could lead to pound growth toward 1.3585 and 1.3617;
• Selling on a breakout below 1.3520 could lead to pound decline toward 1.3490 and 1.3455;

For USD/JPY

• Buying on a breakout above 157.70 could lead to dollar growth toward 157.99 and 158.35;
• Selling on a breakout below 157.40 could lead to dollar sell-offs toward 156.90 and 156.65;

Mean Reversion Strategy for the Second Half of the Day

For EUR/USD

• I will look for selling opportunities after a failed breakout above 1.1764 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.1735 followed by a return above this level;

For GBP/USD

• I will look for selling opportunities after a failed breakout above 1.3585 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.3510 followed by a return above this level;

For AUD/USD

• I will look for selling opportunities after a failed breakout above 0.7236 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 0.7210 followed by a return above this level;

For USD/CAD

• I will look for selling opportunities after a failed breakout above 1.3722 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.3691 followed by a return above this level.

The wave structure on the hourly chart currently remains straightforward. The latest completed downward wave did not break the previous low, while the new upward wave broke above the last peak. Thus, the trend remains bullish, though highly unstable — all recent waves are approximately equal in size. The temporary ceasefire between Iran and the United States supported the bulls, but now, three weeks later, it can be said that geopolitical developments are moving toward preserving the conflict. Therefore, bullish attacks may remain limited or stop altogether.

Monday's news background was interesting, but traders once again reacted very inconsistently to the events and headlines. To understand the unusual market behavior, we should begin with Friday, when important US Nonfarm Payrolls and unemployment data were released but received virtually no reaction from traders. Interestingly, bears had an excellent opportunity to launch an attack that day, but instead chose to wait for the weekend.

Over the weekend, another escalation attempt occurred around the Strait of Hormuz. Several American ships attacked Iranian ports and received retaliation. On Monday, Donald Trump stated that he had received a counterproposal from Iran regarding ending the conflict and reaching an agreement, but he found it completely unacceptable. As a result, Iran rejected the US proposal, while the United States rejected Iran's proposal. The central issue remains the "nuclear clause," where the sides have not come close to reaching consensus. As before, Iran is willing to temporarily freeze uranium enrichment and accept international oversight of nuclear facilities, but not to fully abandon nuclear energy or transfer all uranium reserves to third countries. Meanwhile, Washington insists precisely on those conditions. How the sides intend to reach an agreement remains unclear to me.

On the 4-hour chart, the pair reversed in favor of the US dollar and began declining toward the 76.4% corrective level at 1.1617. A rebound from the 1.1778 level would once again allow expectations for some decline. In my view, the hourly chart is currently more informative due to weak market movements. Bulls seized the initiative about a month ago, but are now searching for new growth drivers. No emerging divergences are visible today on any indicator.

Commitments of Traders (COT) Report:

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

Overall, in the long term, major market participants continue to view the euro with considerable interest. Naturally, various global events — which have been plentiful in recent years — continue to influence investor sentiment. In particular, market attention remains focused on the Middle East, where the war has merely been paused rather than ended. Therefore, in the near future, movements in the euro and dollar will depend not on Federal Reserve or ECB monetary policy or economic data, but on developments in Iran.

US and Eurozone Economic Calendar:

• Eurozone – ZEW Economic Sentiment Index (09:00 UTC)
• Germany – ZEW Economic Sentiment Index (09:00 UTC)
• United States – Consumer Price Index (12:30 UTC)

The May 12 economic calendar contains three events, one of which is especially important. The news backdrop will influence market sentiment on Tuesday, particularly during the second half of the day.

EUR/USD Forecast and Trading Tips:

Selling opportunities are possible today if the pair consolidates below the 1.1745 level on the hourly chart, targeting 1.1666. New buying positions may be considered after a rebound from the 1.1745 level, targeting 1.1824.

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

The wave structure remains bullish. The latest completed upward wave broke above the previous peak, while the latest downward wave failed to break the previous low. Geopolitical factors had given bears nearly complete control of the market for two months, but the geopolitical backdrop has since shifted and now largely supports the bulls. At present, the ceasefire between Iran and the United States remains in place, but the situation is moving toward escalation and prolonged confrontation. It will be difficult for bulls to launch strong attacks in the coming weeks, and the bullish trend would be canceled below the 1.3513–1.3526 level.

We have already reviewed Monday's news background. Today, traders should focus on the US inflation report. The new trading day began with another decline in the pound, as bulls failed to break through the 1.3632–1.3641 level after five attempts. However, under the current circumstances, I do not believe the pound's decline will last long. Most likely, bulls have temporarily retreated from the market in order to gather momentum for breaking through this important resistance area. The inflation report due later today may help them accomplish that task.

Most likely, the US Consumer Price Index accelerated in April. However, for the dollar, it makes little difference whether inflation slows or accelerates. The Federal Reserve still does not intend to tighten monetary policy, so rising inflation would not necessarily increase the chances of interest rate hikes in 2026. At best for the dollar, rates may remain unchanged throughout 2026. Therefore, I do not expect the US currency to strengthen following the inflation release. Geopolitics remains the key theme for traders.

On the 4-hour chart, the pair consolidated above the descending trend channel, which allows expectations for a full-fledged bullish trend. Consolidation above the Fibonacci level of 61.8% at 1.3597 would support further growth toward the 76.4% retracement level at 1.3700. However, the chart setup on the hourly timeframe is currently more informative, and I recommend paying closer attention to it. No new emerging divergences are observed today.

Commitments of Traders (COT) Report:

Sentiment among the "Non-commercial" category of traders became more bearish over the latest reporting week. The number of long positions held by speculators increased by 2,996, while short positions increased by 6,265. The gap between long and short positions now stands at approximately 62,000 versus 126,000. For six consecutive weeks in February and March, non-commercial traders actively increased short positions and reduced longs, creating a significant imbalance between long and short exposure. Bears have dominated in recent months, which comes as no surprise given the geopolitical environment.

I still do not believe in a bearish trend for the pound, but everything now depends not on economic indicators, Donald Trump's trade policy, or central bank monetary policy, but rather on the duration, scale, and consequences of the war in the Middle East. In recent weeks, the market had shifted toward expectations of de-escalation, but recent developments suggest that a full ceasefire remains far away and the conflict could resume at any moment. In that case, the bears' advantage could strengthen even further.

US and UK Economic Calendar:

• United States – Consumer Price Index (12:30 UTC)

The economic calendar for May 12 contains only one entry, but it is an important one. The impact of the economic backdrop on market sentiment may become apparent during the second half of the day.

GBP/USD Forecast and Trading Tips:

Selling opportunities were possible after another rebound from the 1.3632–1.3641 level on the hourly chart, targeting 1.3513–1.3526. These trades may still be kept open today. A close below the 1.3513–1.3526 level would allow traders to maintain short positions with a target of 1.3428–1.3437.

Buying opportunities may arise from a rebound off the 1.3513–1.3526 level, targeting the 1.3632–1.3641 level.

Fibonacci retracement grids are based on 1.3866–1.3158 on both the hourly and 4-hour charts.

Today, gold prices (XAU/USD) continue their intraday pullback from the three-week high recorded earlier this Tuesday. At the start of the European session, prices fell below the $4,700 mark, though they are currently returning to that level. This decline remains limited as traders eagerly await new US consumer inflation data.

At the same time, negative developments in the Middle East are being compounded by concerns over a possible failure to reach a peace agreement between the United States and Iran, strengthening the US dollar's position as a reserve currency. Diplomatic setbacks continue to keep oil prices elevated, fueling inflation risks and increasing the likelihood that central banks, including the US Federal Reserve, will maintain a more "hawkish" stance. All of this creates conditions for moderate strengthening of the dollar, which in turn restrains gains in gold prices.

In particular, US President Donald Trump rejected Iran's proposal to end the conflict, which has now lasted for more than two months. The reason lies in disagreements over Iran's nuclear program and tensions surrounding the strategically important Strait of Hormuz.

Moreover, CNN reported that Trump is losing patience over the continued blockade of this vital waterway and is dissatisfied with how the Iranian side is conducting ceasefire negotiations. Some presidential advisers note that he is now more seriously considering the possibility of resuming large-scale military operations. This raises fears of a new escalation of the conflict and further strengthens the US dollar, putting additional pressure on gold.

Meanwhile, traders continue to assess the probability of another Federal Reserve interest rate hike before the end of the year, currently estimated at around 25%. These expectations persist amid concerns that the sharp rise in energy prices caused by the conflict could once again trigger inflationary pressure. Therefore, market participants remain focused on the key indicator — the US Consumer Price Index (CPI), whose release is expected to influence forecasts regarding future Federal Reserve policy and demand for the dollar. However, expectations of a hawkish Fed stance continue to support the dollar and contribute to gold's intraday pullback from the $4,775–$4,774 levels. Nevertheless, the lack of continued downward movement calls for caution before opening bearish positions on gold.

From a technical analysis perspective, the XAU/USD pair is showing resilience below the 20-day simple moving average (SMA). A return above $4,700 serves as support for the bulls. If prices fail to hold this level, the nearest support will be at $4,645, where the 9-day SMA is located. A breakout above the psychological $4,800 level would open the way toward the next major level at $4,900.

The Relative Strength Index (RSI) remains slightly above 50, indicating moderate bullish sentiment, while the MACD histogram fluctuates just below zero.