Global Market Snapshot 12th May 2025

Last week, although investor attention shifted toward the high-level U.S.-China trade talks held in Switzerland, the U.S. and U.K. dominated headlines due to unexpected developments on both monetary policy and trade. The surprise announcement of a trade agreement between the two countries provided valuable insight into the structure of U.S. trade strategy and may serve as a model for negotiations with other major partners.

Despite the significance of the deal, market reaction remained muted. Major U.S. indices and the U.K.’s FTSE 100 posted small declines, indicating that investors are still cautious about the agreement’s practical impact and broader geopolitical risks.

As we enter the new week, the focus shifts back to U.S.-China negotiations. President Trump hinted on social media that tariffs on Chinese goods may be reduced from 145% to 80%, sparking cautious optimism. While some economists are hopeful for tariff relief, expectations remain tempered regarding any near-term breakthroughs.

Weekly Trend Forecast

EUR/USD
The pair experienced sideways consolidation followed by a minor decline last week.

• Outlook: Bearish bias.
  
• Support: 1.1146 – if this level holds, a rebound is possible.
  
• Resistance: 1.1379 – a break above this level could signal the end of the correction and a return to range trading.

USD/JPY
After a slight drop, the pair rebounded last week, reaching a temporary high at 146.18 before pulling back.

• Outlook: Bullish bias this week, targeting resistance at 148.28.
  
• Support: 142.31 – a break below this would neutralize the current uptrend.
  
• Further downside: A drop below 141.49 could shift the overall trend bearish, possibly retesting 139.87.
  

GBP/USD
The pair dropped to 1.3210 but rebounded after the trade agreement announcement.

• Outlook: Neutral for now.
  
• Resistance: 1.3445 – a break above this could initiate a broader uptrend.
  
• Support: 1.3198 – a drop below this would signal a shift to bearish sentiment.
  

USD/CHF
The pair remained range-bound last week.

• Outlook: Neutral with upside potential.
  
• Resistance: 0.8449 – a breakout here could confirm the beginning of a rally from 0.8037.
  
• Support: 0.8183 – a break below this level would turn the trend bearish and likely lead to a retest of the 0.8037 low.
  

AUD/USD
After a minor rise last week, the pair pulled back from a temporary high.

• Outlook: Neutral for the time being.
  
• Resistance: 0.6513 – a breakout could initiate a recovery trend from 0.5913.
  
• Support: 0.6340 – with bearish divergence on the 4-hour MACD, a break below this would confirm a short-term top and shift the trend downward.
  

USD/CAD
The pair dipped to 1.3750 before rebounding and finding support around 1.3904.

• Outlook: Bullish this week.
  
• Target: 1.4023.
  
• Support: 1.3750 – as long as this level holds, downside potential remains limited. A break below would shift the trend bearish.