Forex News
- USD/JPY drifted lower as geopolitical tensions boosted demand for the safe-haven Japanese Yen.
- Fox News reported fresh US airstrikes on tankers attempting to break the blockade, while Iran warned it would respond “with full force” to any aggression.
- US Nonfarm Payrolls rose by 115K in April, beating expectations of 62K, though softer Average Hourly Earnings at 0.2% MoM limited broader US Dollar strength.
The USD/JPY pair fell toward the 156.60 region on Friday, as the Japanese Yen (JPY) gained modest support from safe-haven flows despite resilient United States (US) labor-market data limiting broader downside pressure on the US Dollar (USD).
Market sentiment turned cautious after Fox News reported that the US military carried out additional airstrikes targeting several empty tankers attempting to break the blockade. At the same time, an Iranian Foreign Ministry spokesperson warned that Tehran’s armed forces are “fully prepared and closely monitoring the situation,” adding that Iran would respond “with full force” to any aggression or provocation.
The geopolitical escalation briefly boosted demand for traditional safe-haven assets, including the JPY, although the broader market reaction remained relatively muted, with the USD still holding near weekly lows.
Meanwhile, the latest US Nonfarm Payrolls (NFP) report showed the US economy added 115K jobs in April, above market expectations of 62K, while the Unemployment Rate remained steady at 4.3%. Average Hourly Earnings slowed to 0.2% MoM, signaling easing wage pressure despite continued labor-market resilience.
Short-term technical analysis:
On the four-hour chart, USD/JPY trades at 156.63, holding a capped tone as it sits beneath both the 20-period Simple Moving Average (SMA) at 156.77 and the 100-period SMA at 158.39. The immediate pivot at 156.63 is being retested from below, while a mid-40s Relative Strength Index (RSI) around 44 suggests lacking bullish momentum and reinforces the idea of a corrective consolidation rather than a decisive recovery.
On the topside, initial resistance aligns with the 156.63 pivot, followed by a nearby barrier at 156.71 and then 156.82, before the 20-period SMA at 156.77 and the more distant 100-period SMA at 158.39 cap the broader recovery attempts. On the downside, the key support sits at 156.44; a sustained break below this floor would expose deeper weakness, whereas holding above it could keep the pair confined to a range beneath the clustered resistances overhead.
(The technical analysis of this story was written with the help of an AI tool.)
- Gold rises as Middle East peace hopes pressure Oil prices.
- Weaker US Dollar and lower Treasury yields support bullion demand.
- Traders eye CPI, PPI, Retail Sales and Fed speeches.
Gold (XAU/USD) rises some 0.75% on Friday as financial markets remain optimistic about a possible end to the Middle East conflict, which could potentially drive Oil prices lower and ease inflationary pressures. At the time of writing, the XAU/USD pair trades at $4,711 after bouncing off daily lows of $4,673.
XAU/USD climbs as falling yields offset solid US payrolls
Tensions in the Middle East remain high as Iran prolongs its answer to the US 14-point memorandum proposal to end the conflict. The Secretary of State, Marco Rubio, said that they’re waiting for a response, while both countries exchanged fire within the Persian Gulf, and the United Arab Emirates (UAE) was under attack.
Oil prices have been swinging between extending and trimming losses, yet West Texas Intermediate (WTI) is poised to finish the week down more than 6%. Consequently, the Greenback, which has been correlating positively with WTI, is also on the back foot as the US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, falls 0.33% to 97.93.
The drop in US Treasury yields is underpinning the price of the yellow metal. The US 10-year T-note is down two basis points at 4.362%.
Steller NFP data, ignored by traders
US Nonfarm Payrolls in April rose by 115K, beating the 62K estimate; March's figure was revised up from 178K to 185K. The Unemployment Rate held at 4.3%, below the Fed's 4.5% annual projection, while average hourly earnings grew 3.6%, short of the 3.8% forecast.
Other data showed that households in the US are becoming pessimistic, as the University of Michigan Consumer Sentiment fell to a record low in May, down from April’s 49.8 to 48.2, the all-time low. The survey found that Americans are feeling the pain of surging pump prices.
The survey revealed that one-year inflation expectations fell to 4.5%, while five-year expectations declined to 3.4%.
Given the solid US jobs report and inflation expectations anchoring at 4% or higher, money markets are not expecting rate cuts in 2026, according to Prime Terminal data.
Federal Reserve (Fed) officials hit the wires, with Chicago Fed President Austan Goolsbee remaining hawkish, saying that the jobs market is pretty much stable and that inflation has not been great and is going the wrong way. Conversely, Governor Stephen Miran said that it’s appropriate to cut rates.
Next week, traders' eyes will be on the release of the US April inflation data, including the Consumer Price Index (CPI) and the Producer Price Index (PPI). Alongside this, Retail Sales and speeches by Federal Reserve officials would grab the headlines.
XAU/USD technical outlook: Gold buyers test key resistance, eyes on $5,000
Given the fundamental backdrop, the Gold price is testing a key resistance trendline in the $4,700-$4,715 area, which, if decisively broken, could open the door to further upside. Buyers are gaining momentum as the Relative Strength Index (RSI) has cleared its 50-neutral level, turning bullish. Hence, the path of least resistance is likely tilted upwards, but a strong supply zone lies ahead of higher prices.
Above, the next line of defense for bears would be the 100-day Simple Moving Average (SMA) at $4,768. If hurdled, the next resistance would be the 50-day SMA at $4,781, followed by the $4,900. Overhead lies the $5,000 milestone.
On the flip side, a daily close of Gold prices below $4,700 could pave the way for a pullback, with sellers eyeing the May 4 daily and weekly low of $4,500.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Wells Fargo Economics expects April U.S. CPI to firm, with headline inflation rising toward 3.8% year-over-year and core near 2.9%. The team projects a 0.63% monthly gain in headline CPI and 0.50% in core, driven by energy spillovers and core services, while shelter inflation is seen cooling again later this year.
Core and headline CPI seen elevated
"April's CPI report will be more interesting than usual. The ongoing conflict in the Middle East has kept energy prices elevated, which will start to generate more obvious spillovers into other areas of inflation. We estimate headline CPI to rise 0.63% over the month, lifting the year-over-year pace to 3.8%."
"Excluding food and energy, we look for core CPI to increase 0.50% in April and 2.9% on a year-ago basis. The monthly pop is expected to be driven by core services, where strength will be partly—but not entirely—a mirage. The unwinding of a government shutdown-related survey quirk is expected to lead primary shelter to increase at twice its recent pace."
"We expect shelter inflation to quickly resume its moderation in May though, as real-time rent measures point to further softening. Excluding shelter, services should be genuinely hot thanks to higher jet fuel costs leading to a jump in airfares."
"Looking ahead, we continue to forecast the year‑over‑year rate of core CPI to remain stuck close to 3.0% this year. Shelter inflation should continue to cool, but progress elsewhere is proving harder to come by. At the same time, slowing wage growth has weighed on consumer purchasing power and will likely limit firms’ ability to pass along higher costs."
"That should help temper broader inflation by year-end even as underlying pressures remain firm."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Nomura’s analysts see the Iran war keeping UK inflation above target until mid-2027 and weakening the 2026 growth outlook beyond Q1. UK GDP growth slowed to 0.1% q-o-q in both Q3 and Q4 2025. They also flag early local election results showing strong support for Reform and a challenging picture for Labour.
Inflation persistence and softer growth prospects
"We look at what market sensitivities can tell us about the likelihood of interest rate hikes as a function of the level of oil prices."
"There are only limited results from the UK local elections thus far, but they show strong support for Reform and a difficult set of results for Labour."
"We expect UK inflation to be above target until mid-2027 due to the Iran war."
"UK GDP growth slowed to 0.1% q-o-q in both Q3 and Q4 2025, and the 2026 outlook (beyond Q1) has weakened due to the Iran war and associated uncertainty."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CHF trades near two-month lows as broad US Dollar weakness persists.
- Hopes for a US-Iran deal pressure the Greenback despite the latest flare-up near the Strait of Hormuz.
- Technically, USD/CHF maintains a bearish tone while trading below the 20-day SMA.
USD/CHF trades on the back foot on Friday and is set for a second straight weekly decline amid broad-based weakness in the US Dollar (USD). At the time of writing, the pair is trading around 0.7773, hovering near two-month lows.
Price action continues to be driven by geopolitical headlines surrounding the Middle East war, with markets remaining cautiously optimistic that the US and Iran could reach a deal soon. Secretary of State Marco Rubio said on Friday that the United States expects a response from Tehran on its latest peace proposal later in the day.
Improving sentiment around a possible US-Iran agreement is weighing on the Greenback, which has slipped back toward pre-war levels. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 97.94, down roughly 0.34% on the day.
However, tensions remain elevated, limiting further downside in the pair after fresh reports of clashes between US and Iranian forces near the Strait of Hormuz. In the meantime, traders also digested the latest US employment report, which supports expectations that the Federal Reserve (Fed) could remain patient before cutting interest rates as inflation risks tied to higher energy prices remain elevated.
Data released by the US Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by 115K in April, beating market expectations of 62K but slowing from March’s 185K gain (revised from 178K). The Unemployment Rate held steady at 4.3%, in line with expectations.
Average Hourly Earnings rose 0.2% MoM in April, below the expected 0.3% and unchanged from the previous month. Annual wage growth accelerated to 3.6% from 3.4%, below the forecast of 3.8%.
Technical Analysis:
On the daily chart, USD/CHF keeps a bearish near-term tone as spot holds beneath the 20-day Simple Moving Average (the Bollinger middle band) at 0.7830 and the upper band resistance near 0.7897. Price is hovering just above the lower Bollinger band support at 0.7763, highlighting pressure on the downside, while the Relative Strength Index (14) around 40 signals weak momentum rather than oversold stress, and the negative Moving Average Convergence Divergence (MACD) reading reinforces a soft underlying bias.
On the topside, initial resistance is located at the 20-day SMA/Bollinger middle band at 0.7830, with a break exposing the upper Bollinger band at 0.7897. On the downside, the immediate level to watch is support at the lower Bollinger band around 0.7763; a daily close below this area would open the door to further losses, keeping bears in control while the pair trades under the 0.7830 cap.
(The technical analysis of this story was written with the help of an AI tool.)
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
- Gold holds firm after mixed US labor market data, though higher-for-longer interest rate expectations cap the upside.
- Easing Oil prices and a weaker US Dollar support Gold, though Middle East tensions keep markets cautious.
- Technically, XAU/USD tests the 20-day SMA Bollinger mid-band while momentum remains moderate.
Gold (XAU/USD) holds firm on Friday but lacks upside momentum as traders digest mixed US Employment data while keeping a close eye on geopolitical developments in the Middle East. At the time of writing, XAU/USD is trading around $4,714, hovering below the two-week high of $4,764 touched on Thursday.
Data released by the US Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by 115K in April, beating market expectations of 62K but slowing from March’s 185K gain (revised from 178K). Meanwhile, the Unemployment Rate held steady at 4.3%, in line with market expectations.
Average Hourly Earnings rose 0.2% MoM in April, missing expectations of 0.3% and matching the previous reading. Annual wage growth accelerated to 3.6% from 3.4%, though it remained below the 3.8% forecast.
The metal remains on track for its first weekly advance in three weeks, drawing support from a weaker US Dollar (USD) and easing Oil prices amid cautious optimism that the US and Iran could reach a deal to end the war. However, tensions flared again on Thursday after both sides reportedly exchanged fire near the Strait of Hormuz.
Despite the renewed hostilities, US President Donald Trump downplayed the latest escalation. “The ceasefire is going. It’s in effect,” Trump told ABC News.
At the same time, Trump retaliated with fresh warnings toward Tehran as Washington awaits Iran’s response to the latest US proposal. “We’ll knock them out a lot harder, and a lot more violently, in the future, if they don’t get their Deal signed, FAST!” Trump wrote on his Truth Social platform.
While Oil prices have pulled back from recent highs, they remain elevated amid ongoing supply disruptions through the Strait of Hormuz, a key shipping route that carries nearly 20% of global Oil flows.
This continues to keep inflation risks in focus, limiting upside attempts in the non-yielding metal as markets increasingly expect major central banks, particularly the Federal Reserve (Fed), to keep interest rates higher for longer. Chicago Fed President said on Friday that the latest US jobs report appears “fairly steady,” adding inflation “remains high and is moving in the wrong direction.”
Technical analysis: XAU/USD trades within expanding Bollinger Bands as volatility builds
On the daily chart, XAU/USD tests the 20-day Simple Moving Average (the Bollinger middle band) around $4,695 while maintaining a constructive near-term bias, keeping the uptrend from recent lows intact as volatility bands continue to expand.
The Relative Strength Index near 52 suggests moderately positive momentum without overbought conditions, and a subdued Average Directional Index around 20 indicates a trend that is present but not strongly directional, leaving room for extended swings within the broader bullish structure.
On the topside, immediate resistance emerges at the upper Bollinger Band near $4,882, with a more strategic barrier at the psychological $5,000 mark, where sellers could attempt to reassert control.
On the downside, initial support is located at the mid-Bollinger band around $4,695, ahead of the lower band near $4,509; a deeper pullback eyeing the horizontal floor at $4,350 would be needed to seriously challenge the prevailing upward bias.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- DJIA futures recover toward 49,800 as April Nonfarm Payrolls smashes consensus, clawing back some of Thursday's slide.
- US-Iran ceasefire negotiations stay in focus, with Tehran's response expected on Friday though defiant rhetoric and an overnight strike on the UAE cast doubt on a swift breakthrough.
- University of Michigan Consumer Sentiment slumps to a recession-era 48.2 in the May preliminary print, even as 1-year and 5-year inflation expectations cool.
- Next week's April Consumer Price Index, due Tuesday, looms as the dominant catalyst with consensus penciling in a second straight YoY uptick.
Dow Jones Industrial Average (DJIA) futures clawed back ground on Friday after Thursday's late-session selloff dragged the cash index toward 49,500. Overnight dealing through Asia and Europe held a tight range just above 49,600, with traders reluctant to commit ahead of the US jobs report. The 12:30 GMT release sparked a rally toward 49,800 before profit-taking trimmed gains. Cash DJIA was last trading above 49,700, the S&P 500 up around 0.4%, and Nasdaq Composite advancing 0.6%. The small-cap Russell 2000 told a different story, sliding more than 1.5% and underscoring the megacap concentration that has driven the post-April rebound.
Jobs print runs hot, but wages tell a softer story
April Nonfarm Payrolls (NFP) came in at 115K, blowing past the 62K consensus and easing the soft-landing-into-recession concerns that had been building. The Unemployment Rate held steady at 4.3%, matching expectations. The hot headline was tempered, though, by a cooler wages picture. Average Hourly Earnings rose 0.2% MoM against a 0.3% consensus and 3.6% YoY versus 3.8% expected. Labor Force Participation also slipped to 61.8% from 61.9%. It is a mildly Federal Reserve (Fed)-friendly mix, hiring solid enough to push back on hard-landing fears without rekindling wage-driven inflation pressure.
Michigan sentiment plunges to recession-era lows
The University of Michigan (UoM) preliminary May survey told a much darker story. The Consumer Sentiment Index plunged to 48.2 against a 49.5 consensus, sitting at levels usually associated with active recessions. Inflation expectations did soften, with the 1-year measure dropping to 4.5% from 4.7% and the 5-year easing to 3.4% from 3.5%. Still, the combined picture, hot hiring alongside collapsing consumer sentiment and 4.5% near-term inflation expectations, paints the kind of stagflationary backdrop traders have flagged repeatedly through the Iran war. The cooling inflation expectations marginally take pressure off the Fed but do little to ease the consumer-side concerns.
Tehran's response in focus, scepticism builds by the hour
All eyes on Iran. Secretary of State Marco Rubio told reporters in Rome the US expects Iran's response to its latest peace proposal at some point Friday, but he acknowledged Tehran's system "is still highly fractured and a bit dysfunctional," which may be slowing the reply. The mood music is hardly constructive. Iranian Foreign Minister Abbas Araghchi posted that "Iranians never bow to pressure," accusing Washington of opting for "reckless military adventure" every time a diplomatic solution is on the table, comments made after Thursday's US strikes on Iranian military sites at Bandar Abbas and Qeshm. Overnight, UAE air defenses intercepted two Iranian ballistic missiles and three drones, with three moderate injuries reported. Beneath the headlines, the structural gap remains wide. Iran's 14-point proposal defers nuclear talks until after the war ends and the blockade is lifted, while Washington insists Iran first surrender its 400-plus-kilogram stockpile of highly enriched uranium. Markets are pricing some optimism into the reply, but a quick deal is far from baked in.
Single-stock action: AI plays lift, retail and travel drag
Akamai (AKAM) topped the leaderboard with shares surging 28.5% after the content delivery firm posted mixed first-quarter results but raised its full-year outlook. Rackspace Technology (RXT) jumped 12.5% after announcing a memorandum of understanding with Advanced Micro Devices (AMD) to build enterprise AI cloud services for regulated and sovereign workloads. AMD itself climbed 1.7%. BorgWarner (BWA) gained 5.1% on a Q1 beat and new turbocharger awards from a major European original equipment manufacturer. On the downside, Expedia (EXPE) tumbled 6.7% after issuing soft forward guidance despite an earnings beat, and Nike (NKE) shed 1.1% after Wells Fargo downgraded the name to equalweight from overweight, citing a longer-than-expected international turnaround.
Looking ahead: April CPI is next week's main event
Tuesday's April Consumer Price Index (CPI) release is the dominant macro catalyst on the docket. Consensus has headline CPI YoY ticking up to 3.4% from 3.3%, a second straight monthly acceleration after March's print jumped from 2.4% to 3.3% on the back of the Iran-driven oil shock. Headline MoM is forecast at 0.6%, cooling from March's blistering 0.9%. The sharper watch is core: Core CPI MoM is pencilled in at 0.4%, double the 0.2% in March, and Core CPI YoY at 2.6%. With Brent still elevated and Strait of Hormuz traffic constrained, the balance of risks leans to the upside. Producer Price Index (PPI) follows Wednesday, then Retail Sales on Thursday.
Fed pricing: still locked into hold mode
Front-end rate markets are barely flinching. CME FedWatch shows roughly a 95% probability the Fed holds at the June 17 Federal Open Market Committee (FOMC) meeting, with only a thin minority betting on a 25-basis-point cut. The March dot plot pencilled in just one cut for the remainder of 2026, and today's combination of a hot NFP, soft wages, and weak sentiment is unlikely to shift that calculus on its own. Tuesday's CPI is the only print between now and June capable of meaningfully repricing the front end, particularly if core surprises to the upside.
Dow Jones 15-minute chart
Futures FAQs
The futures market is an exchange-based auction in which participants buy and sell contracts of an underlying asset at a predetermined future date and price. The set price is agreed upon today and is derived from the underlying asset. Futures contracts can be based on a wide range of assets, with commodities among the most popular, although currencies and indices are other common underlying assets. Futures prices depend on their underlying asset and act as a mechanism for firms, institutions, and large-position traders to manage risks through hedging.
Futures can be traded in different ways. The most common ways are via a regulated exchange or via Contracts For Difference (CFDs). In the former, liquidity is high and pricing is more transparent, with the broker serving only as an intermediary between you and the market. Still, it generally requires more capital. The largest futures exchanges are the Chicago Mercantile Exchange (CME) and the New York Mercantile Exchange (NYME). As for CFDs, these require less capital and thus trading is more flexible, but at the cost of less transparency.
The E-mini S&P 500 index, Crude Oil (Brent, WTI), Natural Gas, Gold, Silver, Copper, and soft commodities such as grains are among the most actively traded contracts. These offer strong liquidity and are closely followed by traders worldwide. Futures market volume consistently exceeds spot market volume, often significantly. This dominance is driven by leverage, hedging, and higher liquidity on exchanges.
Yes. Future gauges, particularly equity index futures such as those of the S&P 500 or the Nasdaq, are widely considered key gauges of market sentiment because they reflect investors’ expectations for the next session’s opening price. When equity futures drop, it is a sign of risk-aversion, signaling bearish market sentiment. On the contrary, rising equity futures suggest markets are risk on.
As a futures contract approaches its maturity date, the futures price converges upon the spot price, becoming almost identical at expiration. However, prices can diverge significantly before the contract ends. A market is in contango when future prices are higher than spot prices, while the mirror image is called backwardation (when current prices are higher than future prices). For commodities, the normal state of the market is contango because holding the asset over time incurs costs such as storage or insurance fees. When markets turn from contango to backwardation – or vice versa – it signals a shift in the trend: a change from contango to backwardation is taken as a bullish sign, while going from backwardation to contango is generally considered bearish.
- US NFP beat estimates, but the Dollar remains under pressure.
- Record-low consumer sentiment highlights growing US economic anxiety.
- German industrial weakness fails to derail the Euro’s weekly advance.
EUR/USD edges higher during the North American session on Friday amid heightened tensions in the Middle East, even though a solid US jobs report might prevent the Federal Reserve (Fed) from cutting rates in the upcoming months. At the time of writing, the pair trades at 1.1775, up 0.44%.
Euro gains as geopolitical fears outweigh upbeat US payrolls
Tensions around the US-Iran conflict heightened as they exchanged strikes for control of the Strait of Hormuz. In the meantime, US Secretary of State Marco Rubio said they’re waiting for Tehran’s response to the 14-point memorandum, aimed at extending the ceasefire and reopening the Strait.
In the US, Nonfarm Payrolls for April crushed estimates of 62K jobs added to the economy, increased by 115K, while March’s print was upwardly revised to 185K. The Unemployment Rate remained steady at 4.3%, below the Fed’s 4.5% projected for the whole year, while Average Hourly Earnings rose by 3.6% beneath forecasts of 3.8%.
Although the data is positive, the Greenback failed to recover, weighed down by the Middle East conflict and also by consumers turning pessimistic about the economy, as revealed by the University of Michigan Consumer Sentiment.
The preliminary UoM Consumer Sentiment Index slid to a record low in May, falling to an all-time low of 48.2, down from April’s 49.8.
Comments of Joane Hsu, the Director of the Surveys of Consumers, show households complaining about “soaring prices at the pump,” as the developments in the Middle East are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.
Digging into the report, inflation expectations over the next year dipped from 4.7% to 4.5%. For the next five years, it dropped from 3.5% to 3.4%.
Meanwhile, the Euro (EUR) seems poised to end the week with gains of over 0.44%, even though Industrial Production in Germany plunged 0.7% in March, missing estimates and worse than the previous month's.
EUR/USD Price Forecast: Technical Outlook
In the daily chart, EUR/USD trades at 1.1772, extending its recovery above the clustered simple moving averages around 1.1640 and staying well bid over the rising support trend line anchored near 1.1411. This positioning above both dynamic and structural floors suggests a bullish near-term bias, while the Relative Strength Index (14) hovering around 58 keeps positive but not overbought momentum in place, hinting that buyers still retain control as long as the pair holds above these underlying levels.
On the downside, immediate support is reinforced by the latest close at 1.1772, ahead of the triple simple moving average region near 1.1640, with the broader uptrend protected by the ascending trend line starting from 1.1411. On the topside, the next notable hurdle is the broader descending resistance trend line projected from the 1.1929 area, and a sustained break over that barrier would likely open the path for an extension of the current advance.
(The technical analysis of this story was written with the help of an AI tool.)
(This story was corrected on May 8 at 16:01 GMT to say that March’s NFP print was upwardly revised to 185K instead of downwardly revised to 178K.)
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.19% | -0.19% | -0.03% | 0.75% | -0.40% | -0.98% | -0.35% | |
| EUR | 0.19% | -0.01% | 0.11% | 0.94% | -0.15% | -0.79% | -0.11% | |
| GBP | 0.19% | 0.00% | 0.13% | 0.95% | -0.14% | -0.78% | -0.12% | |
| JPY | 0.03% | -0.11% | -0.13% | 0.85% | -0.31% | -0.85% | -0.31% | |
| CAD | -0.75% | -0.94% | -0.95% | -0.85% | -1.11% | -1.69% | -1.06% | |
| AUD | 0.40% | 0.15% | 0.14% | 0.31% | 1.11% | -0.64% | 0.02% | |
| NZD | 0.98% | 0.79% | 0.78% | 0.85% | 1.69% | 0.64% | 0.67% | |
| CHF | 0.35% | 0.11% | 0.12% | 0.31% | 1.06% | -0.02% | -0.67% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- Silver jumps as markets digest stronger-than-expected US job creation figures and a weaker US Dollar.
- Tensions around the Strait of Hormuz continue to support demand for safe-haven assets.
- Markets still expect Federal Reserve rate cuts despite a stronger-than-expected NFP report.
Silver (XAG/USD) trades around $80.70 on Friday at the time of writing, up 2.98% on the day, supported by a weaker US Dollar (USD) and persistent demand for safe-haven assets amid heightened geopolitical tensions.
The United States (US) Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 115K in April, beating market expectations of 62K. March’s figure was also revised higher to 185K from 178K previously reported. The Unemployment Rate remained steady at 4.3%, while annual wage growth accelerated to 3.6%, although it came in below expectations of 3.8%.
Despite the stronger-than-expected labor market data, the US Dollar weakens as markets focus on optimism surrounding a potential agreement between Washington and Tehran and improving risk sentiment across Equity markets.
At the same time, investors remain focused on developments in the Middle East after reports of new military strikes near the Strait of Hormuz. According to US and Iranian media outlets, explosions were heard in the region as exchanges of fire between the US and Iran continue to fuel fears of a broader escalation.
This backdrop continues to support precious metals, with Silver benefiting both from its safe-haven appeal and from the weakness of the US Dollar, which increases the attractiveness of USD-denominated commodities for international buyers.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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