The global financial landscape is shifting in the wake of a landmark U.S.–China tariff de-escalation, which has revived investor confidence in the U.S. dollar. Risk sentiment improved, capital flowed into dollar-denominated assets, and the Federal Reserve’s delayed rate cut trajectory remains under the microscope. The euro and the pound continue to face internal economic weaknesses and external geopolitical risks, while the Japanese yen battles a strengthening dollar and complex trade diplomacy. Gold, caught between reduced demand for safe havens and lingering inflation risks, remains volatile.
🇪🇺/🇺🇸 EUR/USD: Outlook – Euro vs U.S. Dollar
Macro & Fundamental Context:
The euro is under pressure due to both U.S. dollar strength and political-economic concerns in the EU. Despite weaker-than-expected U.S. inflation readings for April, the market focus remains on delayed Fed rate cuts. Additionally, the easing of U.S.–China tariffs boosted the dollar, diminishing euro appeal.
In the eurozone, the anticipated European Central Bank rate cut (previously forecasted at 60bps) has now been reduced to 50bps due to slightly improved external trade relations. However, potential U.S. tariffs on EU goods still loom as a key geopolitical risk. The EU’s proposed €95 billion retaliation package highlights its preparedness, but any escalation could further weigh on the euro.
Technical Landscape:
- The euro fell to 1.1080, its lowest since April 9.
- Key resistance remains at 1.1184–1.1230. A break above could fill the gap to 1.1240 and trigger further upside.
- Sustained trading below 1.1184 signals bearish momentum, with downside targets at 1.1120, 1.1090, and 1.1070.
- If 1.1070 breaks, 1.1017 and 1.0902 become the next targets, potentially forming a double bottom around 1.1064.
Outlook:
The overall sentiment remains bearish unless the euro can decisively reclaim 1.1230. Without that, downside risks dominate due to dollar strength and uncertainty surrounding EU-U.S. trade tensions.
EUR/USD Key Levels:
- Resistance: 1.1184, 1.1230, 1.1293, 1.1379
- Support: 1.1120, 1.1090, 1.1070, 1.1017, 1.0902
🇬🇧/🇺🇸 GBP/USD Outlook – British Pound vs U.S. Dollar
Macro & Fundamental Context:
Sterling is vulnerable amid weak domestic data and resurgent dollar strength. The UK labor market is showing signs of strain, with unemployment rising to 4.5% and jobless claims increasing. These data points align poorly with the Bank of England’s recent dovish bias, having already enacted two rate cuts in 2025.
Furthermore, the UK’s trade negotiations have made progress—most notably with India and the U.S.—but this has yet to translate into material support for the pound. The sharp appreciation of the dollar following U.S.–China tariff reductions continues to overshadow these gains.
Long-term charts suggest that the pound’s recent bullish rally was corrective in nature and part of a broader downtrend. If the trade conflict between the U.S. and the world continues to ease, the U.S. dollar could reclaim its multi-year uptrend—likely dragging the pound toward the 1.2300–1.2400 range.
Technical Landscape:
- GBP/USD breached the key support at 1.3184, with a near-term bearish outlook targeting 1.3101.
- Consolidation below 1.3184 confirms the bearish structure.
- Upside potential is limited unless the pair recaptures and sustains above 1.3212 or, more significantly, above 1.3322.
Outlook:
Sterling remains pressured and susceptible to further losses unless unexpected positive macro data or geopolitical developments occur. For now, short positions are favored.
GBP/USD Key Levels:
- Resistance: 1.3212, 1.3258, 1.3322
- Support: 1.3121, 1.3101, 1.3031, 1.2939
🇺🇸/🇯🇵 USD/JPY Outlook – U.S. Dollar vs Japanese Yen
Macro & Fundamental Context:
The yen’s dramatic weakening—driven by a surge in the dollar—reflects market optimism following the initial trade accord between the U.S. and China. However, Japan’s reluctance to accept a partial deal with the U.S., particularly one excluding autos, complicates matters.
Japan continues to push for tariff reductions on automobiles, which the U.S. has resisted. Meanwhile, the Bank of Japan remains cautious, preferring to assess economic and price developments before making major moves. With the Fed delaying rate cuts, yield differentials favor the dollar, putting further pressure on the yen.
Technical Landscape:
- The pair surged past 148.28 to close near 148.46, with potential for continuation to 150.47 and even 151.30 if momentum persists.
- A false breakout scenario is in play, and if the gap is filled and price slips below 145.08, a deeper pullback to 143.45 is likely.
- The absence of clear reversal signals keeps buyers in control for now, but caution is warranted.
Outlook:
The medium-term trend remains bullish. However, any signs of dollar fatigue or increased trade tensions involving Japan could shift sentiment quickly.
USD/JPY Key Levels:
- Resistance: 148.28, 150.47, 151.30
- Support: 147.61, 146.27, 145.71, 144.80, 143.45
🪙 XAU/USD Outlook – Gold vs U.S. Dollar
Macro & Fundamental Context:
Gold suffered a near-3% drop, sliding to $3,230 as investor demand for safe havens diminished following tariff de-escalation between the U.S. and China. Yet, inflation remains a lingering risk, and with the Fed reluctant to cut rates too soon, gold may find support if rate cut expectations revive.
Importantly, gold continues to trade within a broad uptrend, with buyers stepping in near key support levels. While the initial breakdown scared off some bulls, gaps left in the $3,330–3,359 area could provide targets for a rebound if momentum returns.
Technical Landscape:
- Gold found support at $3,224 (aligned with the 200 EMA), rebounding strongly to $3,249.
- A break above $3,250 confirms bullish continuation toward $3,281 and then $3,330–3,359.
- The upside bias is maintained while gold stays above $3,220. Below that, momentum could weaken rapidly.
Outlook:
Gold’s retreat appears corrective within a broader bullish trend. Renewed inflation fears, geopolitical jitters, or delayed Fed action could trigger a strong rebound. Watch for price action above $3,250 for confirmation of further gains.
Gold Key Levels:
- Resistance: $3,250, $3,281, $3,330, $3,359
- Support: $3,224, $3,220, $3,170, $3,120
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📊 Summary Table: As of May 14, 2025
| Asset | Support Levels | Resistance Levels | Outlook |
|---|---|---|---|
| EUR/USD | 1.1120, 1.1090, 1.1070, 1.1017 | 1.1184, 1.1230, 1.1293, 1.1379 | Bearish |
| GBP/USD | 1.3121, 1.3101, 1.3031, 1.2939 | 1.3212, 1.3258, 1.3322 | Bearish |
| USD/JPY | 147.61, 146.27, 145.71, 144.80 | 148.28, 150.47, 151.30 | Bullish |
| Gold | $3,224, $3,220, $3,170, $3,120 | $3,250, $3,281, $3,330, $3,359 | Bullish bias |
