As we head into Thursday, May 15, 2025, markets brace for headline-driven swings amid a packed calendar. U.S. Treasury yields jumped after Tuesday’s hotter-than-expected CPI data, tamping down bets on Fed rate cuts. Fed officials sound uneasy – Vice Chair Jefferson warned that tariffs could rekindle inflation – even as a newly approved budget bill is set to add trillions to U.S. debt, reviving debt-ceiling concerns. Ahead today, the docket is loaded: UK Q1 GDP and industrial output drop early (2:00 AM London time), Eurozone GDP and industrial figures (forecast +0.4% QoQ) follow, and multiple ECB speakers take the stage. Then in New York we get U.S. PPI and retail sales (8:30 AM) and Fed Chair Powell’s speech (8:40). All this points to surging volatility: traders will be on edge as U.S. inflation battles, debt-ceiling drama, and central bank cues collide.
EUR/USD
The EUR/USD pair remains in a tug-of-war between dollar strength and eurozone prospects. On Wednesday the euro briefly rallied to ~1.125 on easing trade tensions, but was met by rising U.S. yields that pushed it back down toward 1.117. The 5-minute chart (above) shows EUR/USD carving out a rounded top around 1.1250 before sliding; trading has been choppy as investors parsed Fed-ECB divergence and incoming data. Momentum slowed after Wednesday’s spike – European inflation (German WPI, Spanish CPI) and Friday’s ECB speakers (Elderson, De Guindos) loom large. Technically, resistance sits just below 1.1250 (last Wednesday’s high) with immediate support around 1.1160–1.1180 (the intraday low).
Bias: Neutral–bearish. The recent “double-top” near 1.125 hints at limited upside (Fed steady vs. ECB easing).
Strategy: Sell on rallies around 1.1240–1.1250. For example, consider a short near 1.1250 with a stop ~1.1280. Target the 1.1160 area first, then 1.1100 if momentum holds.
Key levels: Resistance ~1.1250; support ~1.1160–1.1180. A break above 1.1260 would negate this bear view, while a drop below 1.1150 could open 1.1100.
GBP/USD
GBP/USD has been volatile after a late surge flattened out. A sharp rally on May 13 lifted the pound to ~1.3350 (on upbeat sentiment over U.S.–UK trade progress), but Wednesday saw a pullback as U.S. data and dollar strength took over. The price action this week resembles a head-and-shoulders top (as noted by analysts): stalled at 1.3350 and retracing toward 1.3250. Investors now focus on Thursday’s UK GDP report (Q1 growth forecasts ~+0.6% QoQ) – any disappointment will likely send cable lower. UK inflation is easing (CPI ~2.6% in March, expected to peak mid-year), so BoE policy is tilting dovish.
Bias: Neutral-to-bearish. With U.S. inflation still sticky and UK growth fragile, GBP gains may have stalled. Analysts warn the recent top (~1.335) has set up further declines.
Strategy: Look to sell on strength. Consider short entries near 1.3300–1.3320 with stops just above 1.3350. Targets lie at 1.3200 initially (interim support) and possibly 1.3100 on a bigger drop. Alternatively, fresh longs would need a decisive break above 1.3355.
Key levels: Resistance ~1.3350; support ~1.3200. A clear break under 1.3200 would confirm a shift toward the 1.3100–1.3000 zone.
USD/JPY
The dollar/yen is trading in a tight range after Wednesday’s whipsaw. U.S.–China tariff news has boosted risk appetite (dampening yen demand), sending USD/JPY up to ~147.0 during Asia/Europe, but BOJ hawkish tones quickly revived yen strength. The 5-minute chart shows USD/JPY plunging from ~147.3 down to ~146.2 before rebounding into the close. The pattern reflects divergent central bank cues: Fed may pause, but BoJ officials (Deputy Gov. Uchida) have hinted at future policy normalization. FreshForex even advises a bearish bias: “SELL 147.10, SL 147.30, TP 146.10” as inflation data wane and the low-yield yen is expected to firm.
Bias: Neutral-to-bullish (with caution). The near-term trend is up from yesterday’s low (~146.2) – watch for a breakout. But note analysts’ concerns: diverging Fed/BoJ paths favor yen upside.
Strategy: If risk-on holds, a break above 147.10 could reignite gains toward 147.50. Conversely, fading rallies is reasonable: consider selling near 147.10 (stop ~147.30), aiming 146.10.
Key levels: Resistance ~147.10–147.30; support ~146.20–146.30. Breaks beyond these will dictate next moves (topside if above 147.50, or downside toward 145.80 if below 146.10).
Market Outlook
U.S. Data: April PPI/Retail Sales (Thu 8:30 AM) and Fed Chair Powell at 8:40 will be focus. Signs of stickier inflation could keep the Fed on hold. Meanwhile, legislators approve budget bills adding to debt – the debt ceiling debate looms as a potential shock later this year.
UK/Europe: UK Q1 GDP (Thu 2:00 AM) is expected to pick up modestly; any undershoot likely saps the pound. Bank of England’s Swati Dhingra speaks at 10:00 ahead of expected rate cuts (markets fully price 25bp cut). In the Eurozone, Q1 GDP (+0.4% consensus) and industrial output (Thu 5:00 AM) are due; soft results would reinforce the view of slower EU growth. ECB speakers (Elderson, De Guindos) will be watched for hints on the policy path.
Macro Themes: The key theme remains inflation vs. growth. The Fed-ECB policy gap is wide (Fed hawkish, ECB easing), underpinning a strong USD trend overall. US–China/UK tariff news has curbed dollar strength recently, but doubts remain. UK inflation has already peaked (BoE sees it topping ~3.3% this year), pointing to more BoE easing. In contrast, any surprise in US inflation or volatility around fiscal policy could swing the Fed narrative. In sum, traders should buckle up: Thursday’s data and speeches will likely set the tone for the next leg in this global forex tug‑of‑war.