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The US Dollar Index (DXY) is testing the critical 104.50 level – today’s close will be key.

GBPUSD Forecast: The GBP/USD pair failed to sustain a close above the 1.3030 level. Current trends show bearish dominance, yet upcoming events next week will be crucial in determining whether the pair will continue its uptrend or face further declines.

Crude Oil Forecast: Following bearish sentiment driven by weaker-than-expected Chinese economic growth, a drop in the US Dollar, the Houthi attack on an oil tanker in the Red Sea, and a decline in crude inventories, oil prices have rebounded above the $82 mark.

With support in place and momentum trying to turn higher, we’re now looking for additional gains on the China A50 and Hang Seng.

GBP/USD could pull back off 1-year highs at 1.3000 given the 17-year high in speculative long positioning, per the CFTC’s COT report.

US data steps away from the limelight to make way for inflation reports from the UK, Canada, New Zealand, and Japan. And throw in an ECB meeting, Australian employment report and the CCP's Third Plenum for good measure.

Traders and economists expect the US CPI report to fall to 3.1% y/y on a headline basis, with the “Core” (ex-food and -energy) reading expected to hold steady at 3.4% y/y.

GBP/USD has rallied 3.5% since April's low despite favourable yield differentials with the US. Yet price action on the daily and H4 charts suggests a minor pullback may be due.

China’s fledgling economic recovery suffered another setback in April with activity indicators mostly disappointing, especially regarding the beleaguered property sector. The news weighed on the Chinese yuan and other Asian currencies, such as the Japanese yen and Australian dollar.

USD/JPY could be vulnerable as cooling ISM Prices Paid and disinflationary base effects point to a potential decline in CPI inflation this month

Japan’s Nikki 225 and Hong Kong’s Hang Seng have been like chalk and cheese coming out of the pandemic. As one surged, the other floundered. But the tide looks to be turning, and fast.

The US dollar may have risen for a third day, yet bulls lack the conviction that bears displayed last week. And that suggests this bounce could be corrective.

The US dollar is testing support and the NFP leading indicators point to a slightly above expectation reading this month, with headline job growth potentially coming in somewhere in the 200-250K range

The US dollar initially fell and indices rose as traders interpreted the Fed meeting and press conference as dovish.

US dollar traders will be watching Fed Chairman Powell’s press conference and any decisions about the central bank’s balance sheet runoff as potential market-movers for the US Dollar Index (DXY)

It was a come back type of week for stocks, even with another hot inflation report. But next week brings the Fed and markets are still holding on to hopes for 2024 rate cuts.