The financial markets enter this week with a mixed backdrop: geopolitical tensions, diverging central bank policies, and uncertainty about the pace and sustainability of global economic recovery. The recent US credit rating downgrade by Moody’s has increased market anxiety, weighing on the dollar. Meanwhile, the US-China tariff détente and softening inflation in multiple economies suggest central banks might soon pivot from restrictive policy to neutral or accommodative stances.

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🇪🇺/🇺🇸 EUR/USD Outlook – Euro vs U.S. Dollar

Euro Stalled Near Resistance, Awaiting ECB Policy Clarity

• Fundamental Drivers:
  • The euro’s recent rebound was fueled by a softening US dollar and rising expectations that the Fed might pause or cut rates by late summer.
  • On the European side, the ECB remains dovish, signaling further potential rate cuts amid subdued inflation and soft business sentiment.
  • Renewed worries over US fiscal stability have weakened the dollar marginally, supporting EUR/USD above key support levels.
• Price Behavior & Structure:
  • EUR/USD has been correcting upward since February but recently failed to sustain above the strong resistance zone at 1.1200–1.1250.
  • The pair is consolidating in a narrowing range, indicating indecision.
• Forecast:
  • Expect early-week strength toward 1.1200–1.1250 followed by exhaustion.
  • Downside risk resumes later in the week as the pair retraces toward support at 1.0980 or potentially 1.0930.
• Key Levels:
  • Resistance: 1.1200, 1.1250, 1.1293
  • Support: 1.0980, 1.0930, 1.0902

🎯 Trading Outlook: Sell on confirmed rejection near 1.1200. No compelling reason to initiate longs unless 1.1293 is broken and held.

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🇬🇧/🇺🇸 GBP/USD Outlook – British Pound vs U.S. Dollar

British Pound at Crossroads as CPI Looms

• Fundamental Drivers:
  • This week’s UK CPI report is pivotal. Forecasts point to a reacceleration of inflation to 3.0% y/y in April — well above the Bank of England’s 2.0% target.
  • The BoE is unlikely to shift dovish in the short term, keeping GBP supported unless inflation surprises sharply lower.
  • Political uncertainty and sluggish economic growth continue to cap upside potential.
• Price Behavior & Structure:
  • GBP/USD has formed an upward wave since early April but has been correcting lower since late May.
  • The pair is approaching a strong support zone at 1.3180–1.3130, where buyers may step in.
• Forecast:
  • Weakness may persist early in the week, testing the lower bounds of the support zone.
  • A reversal and continuation of the uptrend is likely by week’s end, assuming CPI supports GBP.
• Key Levels:
  • Resistance: 1.3430, 1.3480, 1.3550
  • Support: 1.3180, 1.3130, 1.3121

🎯 Trading Outlook: Buy after bullish reversal signals near 1.3180. Selling carries high risk due to potential trend resumption.

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🇺🇸/🇯🇵 USD/JPY Outlook – U.S. Dollar vs Japanese Yen

Yen Strengthens on Safe-Haven Flows and US Fiscal Worries

• Fundamental Drivers:
  • Japan’s economy contracted in Q1, but the yen gained due to risk-off flows and US dollar weakness post-Moody’s downgrade.
  • The Bank of Japan remains accommodative, but rising global uncertainty boosts demand for JPY as a safe-haven asset.
  • US bond market volatility also contributes to erratic moves in USD/JPY.
• Price Behavior & Structure:
  • USD/JPY has been trending lower since December with a corrective uptick forming from late April.
  • The pair recently approached the resistance band of 147.40–147.90 but is showing signs of exhaustion.
• Forecast:
  • Early-week correction may push USD/JPY toward 147.40–147.90.
  • A bearish reversal is expected near resistance, with a renewed decline targeting 143.50 or 143.00 later in the week.
• Key Levels:
  • Resistance: 147.40, 147.90, 148.28
  • Support: 143.50, 143.00, 144.05

🎯 Trading Outlook: Look for short setups near resistance. Avoid aggressive buying.

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🇦🇺/🇺🇸 AUD/USD Outlook – Australian Dollar vs U.S. Dollar

Aussie Rebounds, But RBA Rate Cut Looms

• Fundamental Drivers:
  • The Reserve Bank of Australia is widely expected to cut rates to 3.85%, citing subdued inflation and trade-related uncertainties.
  • China’s economic data, while mixed, suggests deceleration in demand — weighing on Australian exports.
  • Global sentiment remains risk-averse, limiting the upside for commodity currencies.
• Price Behavior & Structure:
  • AUD/USD is consolidating within a corrective downtrend from late April but found support near 0.6400.
  • The pair has rebounded at the start of the week, but upside momentum remains fragile.
• Forecast:
  • Bearish tone may persist until RBA’s decision.
  • A reversal is possible later in the week if the RBA adopts a cautious tone on future rate cuts.
• Key Levels:
  • Resistance: 0.6460, 0.6510, 0.6550
  • Support: 0.6350, 0.6300, 0.6260

🎯 Trading Outlook: Buy on bullish reversal signals near 0.6350. Selling not advisable unless price decisively breaks below 0.6300.

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🇳🇿/🇺🇸 NZD/USD Outlook – New Zealand Dollar vs U.S. Dollar

Kiwi Firms on Weak Dollar, But Reversal Likely

• Fundamental Drivers:
  • NZD/USD rallied following the US credit downgrade, which pushed the dollar lower.
  • However, global headwinds, including trade tensions and softer Chinese demand, remain a drag on New Zealand’s export-driven economy.
  • Domestic data remains mixed, with no compelling reason for aggressive NZD bulls.
• Price Behavior & Structure:
  • The pair has been forming a corrective bullish wave since late April.
  • A reversal pattern has begun forming, with downside risk increasing near resistance at 0.6040–0.6090.
• Forecast:
  • A short-term push higher is possible early in the week.
  • A bearish reversal and decline toward 0.5880 or 0.5830 likely in the latter half.
• Key Levels:
  • Resistance: 0.6040, 0.6090
  • Support: 0.5880, 0.5830, 0.5780

🎯 Trading Outlook: Look for short opportunities after confirmation of a reversal near resistance.

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🌕 Gold (XAU/USD) Outlook – Gold vs U.S. Dollar

Gold Balances Between Rebound and Reversal

• Fundamental Drivers:
  • Gold slipped last week due to rising risk appetite, but the US credit rating downgrade renewed demand for safe-havens.
  • US fiscal concerns, persistent geopolitical tensions, and potential Fed dovishness support gold in the medium term.
  • However, any stabilization in risk sentiment or stronger-than-expected US data may cap gold’s upside.
• Price Behavior & Structure:
  • Gold remains in a broad bullish trend but is undergoing a correction from resistance at 3230–3250.
  • The short-term pullback may deepen before buyers regain control.
• Forecast:
  • Early-week pressure near resistance could lead to a retracement.
  • Expect buyers to return near 3130–3110 with renewed upward pressure likely later in the week.
• Key Levels:
  • Resistance: 3230, 3250, 3266
  • Support: 3130, 3110, 3049

🎯 Trading Outlook: Wait for bullish confirmation near 3130 before entering long positions. Selling carries high risk.

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📊 Summary Table: As of May 20, 2025

Asset	Bias	Key Resistance Levels	Key Support Levels	Strategy
🇪🇺 EUR/USD	Neutral → Bearish	1.1200 / 1.1250 / 1.1293	1.0980 / 1.0930 / 1.0902	Sell near resistance
🇬🇧 GBP/USD	Bullish	1.3430 / 1.3480 / 1.3550	1.3180 / 1.3130 / 1.3121	Buy after reversal near support
🇺🇸 USD/JPY	Bearish	147.40 / 147.90 / 148.28	143.50 / 143.00 / 144.05	Short near resistance
🇦🇺 AUD/USD	Neutral → Bullish	0.6460 / 0.6510 / 0.6550	0.6350 / 0.6300 / 0.6260	Buy near support after reversal
🇳🇿 NZD/USD	Bearish	0.6040 / 0.6090	0.5880 / 0.5830 / 0.5780	Short near resistance
🪙 XAU/USD	Bullish (long-term)	3230 / 3250 / 3266	3130 / 3110 / 3049	Buy near 3130 if reversal forms