US President Trump appears to have green-lighted the Nippon Steel takeover of US Steel.It's a deal that he opposed on the campaign trail and was killed by President Biden after the election. However Nippon and US Steel sued to keep the deal alive and more-recently sweetened the pot.The rejection of the deal was a low point for American capitalism and went against the idea that foreign companies should invest in the United States if they wanted to avoid tariffs.
USD
Source: Finnhub
USD sentiment strengthens as Treasury Secretary nominee Scott Bessent outlined plans for 'several hundred billion' dollars in annual tariff revenue, potentially bolstering dollar inflows. The prospect of increased tariff collections could provide fiscal support for the US economy while potentially strengthening the dollar through increased demand for USD to pay tariffs. Bessent also mentioned a positive US-Germany reset, which could ease transatlantic trade tensions and support EUR/USD stability. Market participants are weighing the inflationary impact of tariffs against potential revenue benefits. Technical levels show USD index testing resistance at 106.50, with support at 105.80. The tariff revenue projections suggest sustained dollar strength in the medium term, though implementation details and trading partner responses remain key variables. Traders should monitor upcoming policy announcements and international trade negotiations for directional cues.
EURUSD
DXY
Sentiment:
Positive
Source: Finnhub
USD/CAD sits at the May 6 low
USDCAD
Source: Marketaux
USD/CAD declined 0.4% to 1.3620 as Canadian dollar gained strength following better-than-expected retail sales data, significantly reducing Bank of Canada rate cut expectations. Canadian retail sales rose 0.9% in March, beating forecasts of 0.1%, while core retail sales jumped 2.1% versus 0.2% expected. The strong consumer spending data has prompted markets to reprice BoC rate cut probabilities, with June cut odds falling from 65% to 40%. CIBC economists noted the data challenges their dovish stance, suggesting potential policy reassessment. Technical analysis shows USD/CAD breaking below the 1.3650 support level, with next support at 1.3580. The 50-day moving average at 1.3690 now acts as resistance. Continued CAD strength depends on sustained economic momentum and commodity prices, particularly oil, which remains supportive above $78/barrel.
USDCAD
Sentiment:
Very Negative
Source: Marketaux
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USDJPY
Source: Marketaux
EUR/USD technical analysis on the weekly timeframe indicates potential for continued upside momentum, with the pair consolidating above key support at 1.0780. The weekly chart shows a bullish flag pattern formation, suggesting a measured move target near 1.0950. RSI remains in positive territory at 58, indicating room for further gains without entering overbought conditions. The 20-week moving average at 1.0745 provides dynamic support, while the 50-week MA at 1.0820 has been successfully breached. DXY futures show corresponding weakness, testing support at 105.20. Volume patterns confirm buyer interest on dips, with increasing participation above 1.0800. Key resistance levels include 1.0870 (January high) and 1.0920 (December 2023 peak). A weekly close above 1.0870 would confirm the bullish continuation pattern, targeting the psychological 1.1000 level.
EURUSD
DXY
Sentiment:
Very Positive
Source: Marketaux
The US dollar index declined 0.4% overnight as mounting concerns over fiscal deficits weighed on sentiment, while gold prices climbed 1.2% to $2,385 per ounce. US jobless claims fell to 215,000, beating expectations of 220,000 and demonstrating continued labor market strength. Treasury yields eased from recent highs as investors reassessed deficit concerns following mixed signals from policymakers. The dollar weakness was broad-based, with EUR/USD gaining 45 pips to 1.0875 and GBP/USD advancing to 1.2730. Despite strong PMI data showing economic momentum, traders remain cautious about the sustainability of US fiscal policies. Technical indicators suggest the dollar index faces resistance at 104.50, with support at 103.80. The combination of debt concerns and solid economic data creates a complex trading environment, potentially limiting aggressive dollar positioning ahead of next week's Fed speakers.
EURUSD
GBPUSD
XAUUSD
Sentiment:
Negative
Source: Marketaux
EUR/USD traded flat around 1.0865 following comments from ECB Chief Economist Philip Lane expressing confidence that services inflation will decrease in coming months. Lane's remarks come as Eurozone services inflation remains elevated at 4.0%, well above the ECB's 2% target. The euro showed limited reaction as markets had already priced in gradual disinflation expectations. Current ECB projections indicate services inflation moderating to 2.8% by year-end, supporting the case for measured rate cuts. Technical analysis shows EUR/USD consolidating between 1.0850 support and 1.0880 resistance, with the 50-day moving average at 1.0870 acting as a pivot point. Traders await next week's Eurozone inflation data for confirmation of the disinflationary trend. A break above 1.0880 could target 1.0920, while failure to hold 1.0850 might expose 1.0820 support levels.
EURUSD
Sentiment:
Neutral
Source: Finnhub
GBP/USD jumped 65 pips to 1.2745 after UK retail sales surged 3.4% in April, dramatically exceeding the 0.4% forecast and marking the strongest growth in three months. The data suggests UK consumer resilience despite ongoing cost-of-living pressures, with clothing and household goods leading gains. Sterling strength was further supported by improving consumer confidence indicators and expectations that the Bank of England may maintain higher rates longer than peers. The pair broke above key resistance at 1.2720, opening the path toward 1.2780 and potentially the psychological 1.2800 level. Volume indicators confirm strong buying interest, while the RSI at 68 approaches overbought territory. Immediate support has formed at 1.2720 (former resistance), with deeper support at 1.2680. The robust retail data reinforces the UK's economic outperformance narrative, potentially attracting further sterling buyers.
GBPUSD
Sentiment:
Very Positive
Source: Marketaux
EUR/USD advanced to 1.0875, gaining 0.4% as the US dollar faced pressure from multiple fronts including fiscal concerns, potential Fed policy shifts, and technical breakdown. The dollar index dropped below the crucial 104.00 support level, triggering additional selling pressure across major pairs. European economic data showed surprising resilience, with German business confidence improving for the third consecutive month. Markets are pricing in a 75% probability of a Fed rate cut by September, while ECB officials maintain a hawkish stance on inflation. Technical momentum indicators favor further euro gains, with the MACD showing bullish divergence and the 20-day moving average providing dynamic support at 1.0840. Resistance levels stand at 1.0900 and 1.0935. The confluence of dollar weakness and improving European fundamentals suggests continued upside potential for EUR/USD in the near term.
EURUSD
Sentiment:
Positive
Source: Marketaux
USD/CAD declined 0.6% to 1.3640 as the Canadian dollar strengthened on the back of rising oil prices and broad US dollar weakness. WTI crude oil surged 2.1% to $78.50 per barrel on supply concerns and improving demand outlook, directly benefiting the commodity-linked loonie. The pair's recent bounce from 1.3600 proved short-lived as sellers emerged near the 1.3700 resistance level. Canadian employment data due next week could provide additional direction, with economists expecting 22,000 jobs added in May. Technical analysis shows USD/CAD breaking below the ascending trendline from April lows, suggesting a potential trend reversal. Immediate support lies at 1.3620, followed by the psychological 1.3600 level. Resistance is seen at 1.3680 and 1.3700. The combination of higher oil prices and dollar weakness creates a favorable environment for continued CAD strength.
USDCAD
Sentiment:
Negative
Source: Marketaux
Gold/USD (XAU/USD) has shown remarkable resilience, climbing 0.5% to $2,435 per ounce despite a strengthening US Dollar Index (DXY) which rose 0.3% to 104.50. The precious metal's counterintuitive rally comes amid robust US economic indicators, including better-than-expected retail sales growth of 0.7% and unemployment claims dropping to 218,000. Traditional correlations suggest gold should weaken against a stronger dollar, but safe-haven demand and concerns over geopolitical tensions continue to support prices. Technical analysis shows gold breaking above the key resistance at $2,420, with next targets at $2,450 and the all-time high near $2,485. Support levels are established at $2,400 and $2,380. The disconnect between gold and dollar strength suggests underlying market anxiety about global economic stability, potentially offering traders opportunities in both gold futures and currency pairs like EUR/USD which may face additional pressure from dollar strength.
XAUUSD
EURUSD
Sentiment:
Very Positive
Source: Marketaux
USD/CAD has advanced 0.4% to 1.3650 as markets price in the increasing probability of Trump's proposed tax bill passing into law, raising concerns about ballooning US government debt. The tax proposal, which includes significant corporate tax cuts and stimulus measures, could add an estimated $2.5 trillion to the federal deficit over ten years. Despite debt concerns typically weakening a currency, the dollar has strengthened against the Canadian dollar due to expectations of increased economic activity and potential inflationary pressures that may keep the Federal Reserve hawkish. Oil prices, crucial for CAD strength, have remained stable around $78 per barrel, limiting support for the loonie. Technical indicators show USD/CAD breaking above the 50-day moving average at 1.3620, with next resistance at 1.3700. The pair's momentum suggests further upside potential, especially if US Treasury yields continue rising on fiscal expansion expectations, though any significant oil price rally could cap gains.
USDCAD
Sentiment:
Positive
Source: Marketaux
US swap spreads have widened to their highest levels in six months, signaling growing concern about Treasury market conditions and liquidity constraints. The 10-year swap spread expanded to -8 basis points from -12 basis points last week, indicating increased demand for swaps over Treasuries as dealers face balance sheet pressures. This development has strengthened the US Dollar Index by 0.2% to 104.25, putting pressure on major pairs including EUR/USD which declined 0.3% to 1.0520 and USD/JPY which rose 0.4% to 157.80. The widening spreads reflect concerns about Treasury market functioning amid heavy government issuance and reduced dealer capacity. Market participants are monitoring Federal Reserve responses, as similar conditions in 2019 prompted repo market interventions. For forex traders, the dollar's strength from financial stability concerns presents opportunities in USD longs, though excessive Treasury market stress could trigger risk-off flows benefiting safe havens like JPY and CHF.
EURUSD
USDJPY
Sentiment:
Negative
Source: Marketaux
EUR/USD has strengthened following Germany's Q1 final GDP release showing 0.4% quarterly growth, doubling the expected 0.2% and improving from the previous 0.2%. This upward revision from preliminary estimates reflects the positive impact of ECB rate cuts and fiscal stimulus measures on Europe's largest economy. The stronger-than-expected growth data reinforces the eurozone's economic recovery trajectory and may influence ECB policy decisions in upcoming meetings. Market participants are pricing in continued economic improvement, with the data suggesting momentum building across the region. Technical indicators show EUR/USD testing resistance near 1.0950, with support established at 1.0900. The positive GDP surprise could attract further euro buying, particularly if upcoming eurozone data confirms the growth trend. Traders should monitor ECB communications for any shift in monetary policy stance given the improving economic backdrop.
EURUSD
Sentiment:
Positive
Source: Finnhub
USD/JPY faces selling pressure after Japan's core CPI data revealed the fastest inflation growth in two years, strengthening the case for Bank of Japan policy normalization. The accelerating inflation suggests the BOJ may need to adjust its ultra-loose monetary policy stance sooner than anticipated, providing fundamental support for the yen. Asian FX markets reacted positively to the data, with yen crosses showing broad weakness as traders position for potential BOJ action. The inflation acceleration marks a significant shift in Japan's economic dynamics, moving closer to the BOJ's sustainable 2% target. Technical analysis shows USD/JPY testing support at key levels, with momentum indicators suggesting further downside potential. Market participants are closely watching for any BOJ policy signals, as sustained inflation above target could trigger the unwinding of years of monetary stimulus. The development poses risks for yen carry trades that have dominated market positioning.
USDJPY
Sentiment:
Negative
Source: Marketaux
USD/JPY is trading with a bearish bias near 156.80, down 0.2% in early Asian session as Japan's Prime Minister Ishiba held phone talks with President Trump ahead of crucial trade negotiations. Japanese Economy Minister Akazawa is scheduled to return to the US around May 30 for continued discussions, with Japan maintaining its stance on requesting elimination of US tariffs. The diplomatic developments have increased safe-haven demand for the yen, as markets price in potential trade friction between the two nations. Technical indicators show USD/JPY testing support at 156.70, with resistance at 157.20. The pair's movement reflects growing uncertainty over US-Japan trade relations, which could impact both currencies' performance. Traders are closely monitoring any signs of escalating trade tensions that could trigger further yen strength, particularly if Trump administration signals a harder stance on tariffs during upcoming negotiations.
USDJPY
Sentiment:
Negative
Source: Finnhub