Technical Analysis

EUR/USD rallied into a major technical pivot at 1.1813–1.1826 last week — the 1.618% extension of the March advance and the 61.8% retracement of the January decline. That zone rejected price cleanly and the pair is now in a corrective pullback. The daily candle structure shows a lower-high formation. The 50-day moving average sits at 1.1680 and is acting as the next magnetic support. RSI on H4 has crossed below 50, confirming momentum shift. Key support cluster at 1.1667–1.1681: the 38.2% retracement of the March rally, the yearly-open level, and the 52-week moving average.

Fundamental Context

The USD is structurally bid after Tuesday’s CPI (3.8%) and Wednesday’s PPI (+1.4% MoM vs 0.5% forecast). Fed rate hike probability for 2026 has risen to 39%. The ECB is expected to hike in June (85% probability), but this is already partially priced. The complicating factor is that rising energy costs from the Iran war are simultaneously hurting Eurozone growth — Germany cut its 2026 GDP forecast to 0.5%. The net result is a EUR that benefits from ECB hawkishness but faces headwinds from deteriorating fundamentals. Watch Eurozone GDP Q1 second estimate at 11:00 CET: a downward revision is EUR-negative.

Technical Analysis

After last week’s pullback from 1.3634 highs, GBP/USD is in a healthy consolidation. The GDP beat has provided a bullish catalyst and the pair has bounced from the 1.3450 support zone, which coincides with the 20-day EMA. The structure remains bullish: higher highs and higher lows since March. The daily RSI is at 54 — room to run higher before overbought. A break above 1.3560 intraday would suggest momentum resuming toward the 1.3634 52-week high. The bear case requires a break below 1.3440 on a 4H close.

Fundamental Context

UK Q1 2026 GDP of +0.6% beat estimates, but the market knows Q2 will be weaker as Iran war energy costs bite. The critical catalyst today is BoE Governor Bailey’s speech at 10:00 BST. Leverage-adjusted GBP positions should account for significant intraday volatility around the speech. If Bailey signals willingness to hike rates twice in 2026, GBP/USD targets 1.3634. If he pushes back against aggressive pricing, expect a drop toward 1.3450. UK borrowing data (£132bn, down £20bn YoY) is fiscally constructive for sterling. CPI at 3.3% keeps rate hike pressure alive.

Technical & Fundamental

The EUR is losing ground to GBP as UK GDP surprise creates a relative growth divergence story. BoE is priced for two hikes in 2026 at 3.75%; ECB is priced for one hike to 2.25% but from a lower base. On a rate-differential basis, GBP looks relatively more attractive. The cross is at 0.8660 with support at 0.8640 and resistance at 0.8700. A short EUR/GBP trade here targets 0.8620 — the April monthly low — with a stop above 0.8710 (weekly resistance). Bailey hawkishness today accelerates the move. ECB data downside risk (Eurozone GDP revision) amplifies it.

Technical Analysis

After running into resistance at the record high of 10,935, the FTSE 100 pulled back to support at 9,665 near the 200-day SMA. From there it has recovered above the 50-day SMA and the multi-month rising trendline. The current level of 10,325 sits in a consolidation range between 10,200 (key support) and 10,450 (near-term resistance). A break above 10,450 on GDP and Bailey strength would target the 10,700 area. MACD on the daily is crossing higher from flat — momentum is incrementally constructive.

Fundamental Context

The FTSE 100 benefits from three tailwinds today: UK GDP beat (domestic confidence), elevated oil prices (BP, Shell, which together constitute ~18% of the index), and currency dynamics — a stronger pound is a mild headwind for multinationals but is offset by global risk-on from Cisco earnings. HSBC’s China exposure means summit headlines directly impact London’s heaviest-weighted financial stock. BP’s oil trading division delivered “exceptionally strong” Q1 results — an ongoing support for the energy-heavy FTSE. Access indices CFDs with tight spreads at Capital Street FX.

Technical Analysis

The DAX 40 has been trading in a 22,100–22,750 range for two weeks. The structure is bearish below 22,750 — a level that coincides with the 50-day SMA and a prior failed breakout. The daily candlestick pattern shows a series of doji candles, reflecting indecision ahead of earnings catalysts. RSI at 47 is neutral. A SAP earnings miss (cloud revenue is the key metric) would push the DAX through 22,100 support, opening a move toward 21,700. A SAP beat would accelerate toward 22,750 resistance.

Fundamental Context

Germany is the weakest performer among G7 economies in 2026. The Economics Ministry halved GDP growth to 0.5% and cited the Iran war as the primary cause. German markets face a stagflation scenario — rising energy costs (CPI rising to 2.7%) combined with a weakening growth outlook. Today’s German Final CPI April at 08:00 CET and SAP Q1 earnings are the two key catalysts. Volkswagen and BMW face additional pressure from EV transition costs and Trump tariff exposure on non-US manufacturing. Use leverage carefully on DAX today given earnings headline risk.

Technical & Fundamental

The CAC 40 has more diversified sector exposure than the DAX — luxury (LVMH, Hermès, Kering), pharma (Sanofi), energy (TotalEnergies), and infrastructure (Vinci) provide defensive cushioning. Sanofi reporting today with Dupixent growth expectations is a positive catalyst. The Trump-Xi summit has a direct positive read-through for French luxury stocks if China consumer sentiment improves. Technically, 7,750 is the key support zone (200-day SMA confluence), while 7,980 is the next resistance. Renault earnings are the risk — any profit warning on EV transition costs would weigh on the index’s auto component.

Technical Analysis

Gold peaked at $5,595 in late 2025 and has since entered a bullish consolidation range between $4,500 and $4,780. The current level of $4,713 sits near the mid-point of this range. The 50-day SMA at $4,640 is rising and providing dynamic support. RSI on the daily is at 52 — neutral, with room to extend higher. A close above $4,780 would target $4,900 (Goldman Sachs year-end target). Support at $4,650 (horizontal structure) and $4,615 (50-day SMA) are the downside reference levels.

Fundamental Context

Three forces are battling for direction in gold today. Bullish: summit anxiety (Taiwan risk, summit disappointment), structural central bank buying running at 860+ tonnes/year, and Iran war safe-haven premium. Bearish: USD strength from hot US PPI data (+1.4% MoM), India raising gold import duties, and any positive summit surprise that reduces risk premia. The net result is a sideways consolidation. The medium-term structural bull case remains intact: central banks buying gold as a dollar-alternative reserve asset is a multi-year policy trend independent of daily news flow.

Technical Analysis

WTI crude is forming a potential top around the $102–103 zone after its 45% surge since the Iran war began on February 28. The daily RSI reached overbought territory above 70 in late April and is now at 58 — declining from overbought, suggesting corrective momentum. The $97 level (prior breakout zone) is the first meaningful support. Below that, $93 is the next target. The current price action shows indecision candles — a bearish reversal pattern is forming if price fails to break above $103 on the next attempted rally.

Fundamental Context

The primary driver of crude oil today is the Iran peace process. Both Trump and Xi agreed at the Beijing summit that Hormuz must stay open. Pakistan mediators have received an updated Iranian peace proposal. Saudi Aramco CEO warned the market won’t normalise until 2027 if Hormuz stays blocked beyond mid-June — but any ceasefire progress today would trigger a sharp downside correction. Goldman Sachs notes global oil inventories at 101 days of demand, falling to 98 by end-May — not at crisis levels. The ceasefire remains “unbelievably weak” per Trump, so the Iran war risk premium will persist until a formal deal is reached. Trade this with wide stops given headline volatility. Access commodities CFDs including crude oil at Capital Street FX.

Technical & Fundamental

Bitcoin has lost the $80,000 psychological level and is struggling to reclaim it. The weekly candle structure shows a lower-high formation since the March $88,000 high. Key support is at $77,000 — the prior consolidation base from February–March. RSI on daily at 42 — bearish territory. Geopolitical risk-off from the Iran war and summit uncertainty are weighing on BTC. Hot US CPI/PPI data strengthens the USD which is historically inversely correlated with Bitcoin. A positive summit surprise (risk-on) could bounce BTC back toward $82,500. A negative surprise (Taiwan escalation) would accelerate the move toward $76,800. Use tighter leverage on crypto given volatility.

Technical & Fundamental

Ethereum has broken below its 100-day EMA at $2,310 — a technically significant bearish signal. The ETH ETF inflows of the past week have been modest and insufficient to reverse the broader risk-off trend. Key support at $2,150 (200-day SMA). Resistance at $2,340 (100-day EMA, now flipped to resistance). The Consensys Ethereum IPO delay to Fall 2026 removed a positive near-term catalyst. JPMorgan’s tokenized fund and NUVA’s $19bn RWA programme provide structural demand support, but these are long-horizon tailwinds. Today’s trade focuses on short-term bearish momentum using instruments available through Capital Street FX’s platforms.