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Forex Signals Brief May 19 – From Canadian Inflation to Flash PMIs and Wage Data
A pivotal week lies ahead with global inflation prints, central bank decisions, and consumer data poised to shape market sentiment across...
Skerdian Meta•Monday, May 19, 2025•4 min read
Quick overview
- A pivotal week ahead with global inflation data and central bank decisions expected to influence market sentiment.
- The U.S. dollar initially strengthened but faced pressure from softer inflation figures, leading to a brief euro rally.
- Robust employment data in Australia supported the Aussie dollar, while stock markets continued to rise amid improved geopolitical conditions.
- In cryptocurrency, Bitcoin surpassed $100,000, and Ethereum rebounded significantly following a major upgrade.
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MARKETS TREND
A pivotal week lies ahead with global inflation prints, central bank decisions, and consumer data poised to shape market sentiment across currencies, commodities, and risk assets.
The U.S. dollar began the week on solid footing, supported by early buying interest that pushed EUR/USD down to 1.1065. However, the pair quickly rebounded as April’s softer-than-expected U.S. CPI and PPI inflation figures undercut the greenback and revived expectations of looser monetary policy. The relief rally in the euro was short-lived.
On Friday, the dollar staged a comeback following the University of Michigan’s consumer sentiment survey, which delivered another gloomy read on confidence—but more critically, flagged a renewed surge in inflation expectations. That shift in sentiment sparked a repricing of interest rate cut odds, with markets paring back expectations for a dovish Fed in the near term.
In Australia, a robust set of employment and wage data reinforced the strength of the labor market, lending further support to the Aussie dollar and tempering RBA rate cut speculation.
Stock markets continued to climb, with the S&P 500 and Nasdaq edging closer to all-time highs, buoyed by optimism surrounding a de-escalation in trade tensions and a calmer geopolitical backdrop. This trend followed a deep correction earlier in the year, but investor sentiment has brightened considerably as US President Trump’s Middle East visit ushered in a quieter political backdrop, helping lift risk assets further.
Weekly Economic Highlights: May 20–24, 2025
The week is dense with inflation data, central bank decisions, and early PMI prints for May across key economies. Markets will watch Canada’s CPI, UK and Japan inflation, and PMI results for signs of softness or resilience in global demand. Continued strength in consumer price indexes may challenge dovish central bank expectations, while signs of economic slowdown could revive rate cut speculation, especially in the Eurozone and Australia.
Monday, May 20
- Canadian markets closed in observance of Victoria Day.
- EU-UK Summit takes place, potentially addressing trade and regulatory cooperation.
China releases key data:
- Industrial Production (April) – a barometer of manufacturing health.
- Retail Sales (April) – offering insight into consumer demand.
- House Prices (April) – reflecting sentiment in the property sector.
- Eurozone final HICP inflation figures for April expected to confirm earlier flash readings.
Tuesday, May 21
- People’s Bank of China (PBoC) announces latest Loan Prime Rate (LPR), a benchmark for lending costs.
- Reserve Bank of Australia (RBA) delivers its monetary policy decision, closely watched amid sticky inflation.
- Norges Bank releases its Financial Stability Report, offering insight into Norwegian banking and credit conditions.
- Eurozone posts March Current Account data and May flash Consumer Confidence, important for economic sentiment.
- Canada’s CPI (April) – crucial for BoC policy expectations.
- Germany’s PPI (April) – a key gauge of upstream inflationary pressures.
- New Zealand’s Trade Balance (April) – highlighting export-import trends in a trade-sensitive economy.
Wednesday, May 22
- Japan’s Trade Balance (April) – assessing export performance amid yen volatility.
- UK CPI (April) – critical in shaping BoE policy trajectory.
- US MBA Mortgage Applications (week ending May 17) – offering a look into housing market activity.
Thursday, May 23
- ECB Minutes (April) could give insight into the timing of rate cuts.
- CBRT (Turkey) publishes its Inflation Report, important for lira and regional risk pricing.
Flash PMIs for May:
- Australia and Japan (early Asian session)
- UK, Eurozone, and US – covering manufacturing and services outlook.
- UK Public Sector Net Borrowing (April) – fiscal health in focus.
- US Initial Jobless Claims (week ending May 17) – continued labor market heat check.
- Canada’s PPI (April) – complements CPI in tracking inflation trends.
Friday, May 24
- Eurozone releases Q1 Negotiated Wage Growth, closely watched by ECB for second-round inflation risks.
- Japan’s CPI (April) – consumer inflation direction in the wake of BoJ’s policy shift.
- Germany’s Detailed GDP (Q1) – offers further context beyond headline growth.
- UK Retail Sales (April) – key for GDP outlook amid stubborn inflation.
- US New Home Sales (April) – another read on US housing strength.
- Canada’s Retail Sales (March) – provides delayed but still valuable consumer spending insights.
Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD falling below 1.11, and stock markets continuing upward. The moves weren’t too big, but we opened 37 trading signals in total, finishing the week with 25 winning signals and 12 losing ones.
Gold’s Rollercoaster and Safe-Haven Sentiment
Gold prices experienced sharp volatility throughout the week. After briefly dipping below the $3,120 mark during a European session, the metal rallied over $120, though it closed the week just under $3,200. Despite a dramatic rebound from earlier lows, gold’s failure to retest April’s peak near $3,500 reflects lingering caution in the market. Analysts suggest that the dip in gold reflects a rotation into riskier assets, spurred by receding geopolitical tensions and improved U.S.-UK trade outlooks.
USD/JPY Rejected by the 200 Daily SMA
Elsewhere, USD/JPY continued its upward march, climbing past 146.00 after having earlier breached 140.00. Despite a few pullbacks, the yen remains structurally weak, with momentum traders driving the pair toward its 200-day moving average at 148.50 before some profit-taking emerged. Still, the recent retracement has piqued interest among investors looking to ride the pair’s ongoing bullish momentum.
USD/JPY – Weekly Chart
Cryptocurrency Update
Bitcoin Consolidates Above $100,000 for the Second Week
In cryptocurrency markets, Bitcoin surged 6% to breach $103,850, marking its highest level since February. The rally was supported by improving sentiment around international trade, particularly warmer U.S.-UK ties and a thaw in U.S.-China relations.
BTC/USD – Weekly chart
Ethereum Tests MAs after Rebound Following Pectra Upgrade
Ethereum followed suit with an impressive recovery. Since its April low of $1,475, ETH has gained roughly 20%, bolstered by the launch of the Pectra update, which enhanced wallet functionality and staking capabilities. The upgrade helped push Ethereum above $2,200, reinforcing the broader recovery in digital assets.
ETH/USD – Weekly Chart
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ABOUT THE AUTHOR
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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