Source: Reuters

Currency pair Euro Dollar EUR/USD concludes the trading week with a slight drop close to the level of 1.1203. Moving averages indicate an existing bearish trend for this pair. Prices broke through the area between signal lines upwards, which indicates pressure from buyers of the European currency and a likely continuation of growth already from current levels. In terms of the EUR/USD price forecast for the trading week, it is expected that there will be an attempt to develop growth in the quotations of this pair up to the resistance area near 1.1305, followed by a pullback downwards and further decline of the Euro Dollar currency pair on the current trading week. The potential target of growth stands below the level of 1.0765.

EUR/USD Weekly Forecast May 19 — 23, 2025

Additional confirmation of the EUR/USD currency pair’s decrease on Forex will be when the broken trend line is tested on the Relative Strength Index (RSI) indicator. The second signal will be a bounce off the bottom boundary of the bullish channel. Cancelling the option of decreasing the Euro/Dollar currency pair quotes for the current trading week from May 19 – 23, 2025, would be a strong rise and break through the level of 1.1705. This will indicate the resistance area and continuation of growth in the region above the level of 1.1985. A breakthrough of the support area and closing quotes below the level of 1.1045 should be expected to confirm a decline in prices, indicating a breakthrough the bottom boundary of the bullish channel.

EURUSD Weekly Forecast May 19 — 23, 2025 anticipates a bullish correction attempt and testing the resistance area close to level 1.1305. From which we can expect a price bounce downwards and continuation of the currency pair’s decline on the Forex market into an area below the level 1.0765. An additional signal for depreciation would be testing the resistance line on the Relative Strength Index (RSI) indicator. A reversal of the downward scenario for Euro Dollar will come from strong growth and breaking through the level 1.1705. In this case, we can expect continuation of the pair’s rise with a potential target at the level 1.1985.

Source: forex24.pro

On May 16, 2025, the University of Michigan released Michigan Consumer Sentiment report for May. The report indicated that Michigan Consumer Sentiment declined from 52.2 in April to 50.8 in May, compared to analyst forecast of 53.4.

Current Economic Conditions decreased from 59.8 in April to 57.6 in May, while Index of Consumer Expectations declined from 47.3 to 46.5.

Year-ahead inflation expectations continued to rise at a robust pace, surging from 6.5% in April to 7.3% in May. Long-run inflation expectations increased from 4.4% to 4.6%.

The University of Michigan commented: “Many survey measures showed some signs of improvement following the temporary reduction of China tariffs, but these initial upticks were too small to alter the overall picture – consumers continue to express somber views about the economy.”

U.S. Dollar Index moved higher as traders reacted to Michigan Consumer Sentiment Report. Currently, U.S. Dollar Index is trying to settle above the 100.85 level.

Gold remained under pressure after the release of the report. Gold settled below the $3185 level as the pullback continued.

SP500 settled near the 5925 level as traders focused on the weaker-than-expected report. Rising inflation expectations may force the Fed to be more hawkish than previously expected, which is bearish for stocks.

Source: FX Empire

Crude Oil Steady as Supply Risks Counter Trade War Relief

OPEC+ Supply Outlook and Iran Deal Keep Bulls in Check

Federal Reserve and China Trade Talks Offer Some Demand Support

IEA Supply Projections Add to Cautious Tone

Crude Oil Market Outlook: Bearish Tilt with Resistance Intact

Daily Light Crude Oil Futures

Source: fxempire

U.S. import prices unexpectedly rose in April as a surge in the cost of capital goods offset cheaper energy products.

Import prices gained 0.1% last month after dropping 0.4% in March, the Labor Department's Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast import prices, which exclude tariffs, would decrease 0.4%. In the 12 months through April, import prices edged up 0.1%.

Data this week showed benign consumer and producer price readings in April. Economists expect the impact of President Donald Trump's sweeping import duties to become evident in inflation data by the middle of this year.

The tariffs have raised fears of a slowdown in global growth, contributing to a dampening of oil prices.

Federal Reserve Chair Jerome Powell warned on Thursday that "we may be entering a period of more frequent, and potentially more persistent, supply shocks - a difficult challenge for the economy and for central banks."

Economists expect the U.S. central bank will resume cutting interest rates either in September or December. The Fed left its benchmark overnight interest rate in the 4.24%-4.50% range earlier this month.

Imported fuel prices fell 2.6% in April after decreasing by 3.4% in March. Food prices were unchanged after dipping 0.1% in the prior month. Excluding fuels and food, import prices shot up 0.5%. That followed a 0.1% dip in March. In the 12 months through March, the so-called core import prices increased 0.8%. Prices for imported capital goods jumped 0.6%, while those of consumer goods excluding motor vehicles increased 0.3%. Prices for imported motor vehicles, parts and engines rose 0.2%.

The weakness of the dollar is likely contributing to the firmness in these import prices.

Trump's aggressive trade policies have rattled investors' confidence in the dollar, leading to a sharp fall in U.S. assets. The trade-weighted dollar is down about 5.1% this year, with most of the depreciation occurring in April.

Source: Yahoo Finance

The underlying U.S. economy is more resilient to tariff-fueled pressures than investors give it credit for, according to analysts at BofA.

In a note to clients, the brokerage said that, while they have downgraded their forecasts for U.S. growth, they do not anticipate the world’s largest economy will slide into a recession because of U.S. President Donald Trump’s aggressive trade agenda.

"Despite the massive tariff hikes in early April, we stayed relatively sanguine because we anticipated de-escalation, along with fiscal easing, down the line," the analysts wrote.

Trump and U.S. officials have eased back from recently-punishing levies in recent days.

On Monday, the U.S. and China agreed to lower tit-for-tat tariffs and temporarily delay their respective levies for 90 days.

The move came after Trump slapped soaring duties of at least 145% on China, leading Beijing to respond with its own retaliatory tariffs of 125%.

Following the deal, the U.S. tariffs on China were brought down to 30%, folding in a baseline 10% levy and separate 20% duties related to Beijing’s alleged role in the flow of the illegal drug fentanyl. China, meanwhile, cut its tariffs on U.S. items to 10%.

Trump also previously announced -- and then paused -- so-called "reciprocal" tariffs on both friends and adversaries in April.

The BofA analysts said the so-called "Trump put" -- or the belief that the president will intervene to turn around falling markets -- was triggered. Deep ructions shook the stock and bond markets after Trump first instituted his elevated tariffs on April 2, and the president later noted these jitters as a factor behind his decision to postpone the duties.

However, the level at which the Federal Reserve will step in to prop up markets is "much lower", the BofA analysts said. Since January, the strategists have projected that the Fed will not slash interest rates this year.

"This is partly because our read on the underlying health of the economy, and the Trump administration’s response suggests there won’t be a recession," they wrote. "But we also think the markets’ view on the Fed reaction function is too dovish."

The Fed cannot afford to cut rates preemptively while inflation continues to overshoot its 2% target level and there are lingering risks of increased unemployment, the analysts said.

Source: Investing