Gather the US CPI today and beware of the capricious policies

On May 13, the US dollar fell slightly in the early trading in the European market on Tuesday, following a strong gain against its competitors at the beginning of this week. The European Economic Calendar will release the ZEW survey of Germany and the euro zone - economic confidence data. In the second half of the day, the US Consumer Price Index (CPI) data for April will receive close attention.

The U.S. dollar index gained bullish momentum on Monday, climbing to its highest level in a month, close to 102.00, with the market cheering news that the U.S. and China had reached a 90-day moratorium on reciprocal tariffs and significantly lowered them. The main Wall Street index rose sharply after the opening, with the Nasdaq Comprehensive Index rising 4% on the day. In early European session Tuesday, the U.S. dollar index remained at a consolidation phase around 101.50, while U.S. stock index futures fell 0.2% to 0.35%.

As the global trade war is getting a breather again, the market's focus has turned to more daily signals, such as economic data and corporate financial reports.

The turmoil caused by US President Donald Trump's "Liberation Day" tariffs has lasted for six weeks, and the recurring lesson seems to be: wait for details and buy on dips.

The easing of U.S.-China relations has resulted in a 90-day suspension of the toughest tariffs between the world's two major economies. This twist resonated with Asian stock markets, with the Japanese market performing strongly after U.S. stocks rose.

According to the trade war truce agreement reached in Geneva, the United States will reduce the tariff rate on China from 145% to 30%, while China will reduce the tariff rate from 125% to 10%.

While Trump posted a comment on social media on Sunday about the overpriced U.S. drug prices, which resulted in a sharp drop in Japanese pharmaceutical stocks on Monday, in fact, his executive orders are moreIt is targeting cheap drugs overseas, which prompted health care stocks in Tokyo's stock market to rebound.

Basic foreign exchange market trend:

Euro/USD turned downward during the European session on Monday, with a final intraday decline of more than 1%. The pair rebounded slightly in early European trading, trading at a price of just above 1.1100.

The US dollar/yen rose more than 2% on Monday, rising to its highest level since early April, exceeding 148.60. The pair is pulling back below 148.00 to start the European period. BoJ Deputy Governor Nobu Uchida said on Tuesday that U.S. tariffs on Japan prices pose upward and downward risks.

GBP/USD remained near 1.3200 at the opening of the European session on Tuesday. The UK National Statistics Agency reported earlier in the day that the ILO unemployment rate rose slightly to 4.5% in the three months ended in March, compared with 4.4% in February, in line with expectations. Other details of the report show that during this period, the number of applicants remained unchanged at 4.5%, while the wage inflation measured by the change in average wages after excluding bonuses fell from 5.9% to 5.6%.

AUD/USD gained momentum on Tuesday after a decline of more than 0.6% on Monday, trading in a positive area above 0.6400. Australian data earlier showed Westpac consumer confidence improved to 2.2% in May, compared with -6% in April.

Bulle market fundamentals:

Gold rebounded and traded around $3,260, recovering from a 2.65% drop on the day before the announcement of the U.S.-China trade agreement. Traders began to be cautious about the lack of details in the announcement, and another outbreak could push gold back to an all-time high that it hit last month.

Analysis of major currency trends:

Euro: The decline of the euro/dollar from 1.1572 is still regarded as a correction measure. Strong support should be seen from 1.0176 to 1.1572 to bring a rebound. On the plus side, breaking through 1.1380 will indicate that the correction is completed and brings a retest of 1.1572. However, a continued breakthrough of 1.1039 will weaken this view and aim at the next 61.8% retracement level of 1.0709.

Pound: The intraday bias of pound/dollar is currently on the downside. From the short-term top of 1.3442 to 55DEMA (now at 1.3067) and below. But the downside space should be curbed by the 38.2% retracement level of 1.2099 to 1.3442 to bring about a rebound. On the plus side, a small resistance above 1.3321 will first turn the intraday bias into neutral.

JPY: The intraday bias of the US dollar/yen is still on the upside. As mentioned earlier, the decline from 158.86 may have completed 139.87. Next, you should see a further increase to 151.60 from 158.86 to 139.87. On the downside, the secondary support level below 145.70 will first make the intraday bias neutral again.

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