Trump's Ceasefire Warning and US CPI Shock Financial Market

ATFX Market Outlook - 12th May 2026

 Trump's Ceasefire Warning and US CPI Shock Financial Market

(By ATFX Analyst Team)

Summary

Geopolitics: President Trump stated on Monday that the ceasefire with Iran is "at risk" after he rejected Tehran's response to the U.S. peace proposal, heightening fears of renewed conflict escalation.

Focus for Today: U.S. will release April CPI data tonight, the second full monthly inflation report since the escalation of the conflict in the Middle East. The annual CPI is expected to rise to 3.7% (previously 3.3%), with a significant monthly increase of 0.6%. A higher-than-expected reading would indicate a severe inflation situation and further diminish expectations for Fed rate cuts.

Global Market Review

U.S. stocks closed slightly higher on Monday as investors assessed the stalemate in U.S.-Iran peace talks, with the AI sector providing continued momentum. Dow rose 0.19%, S&P 500 gained 0.19%, and Nasdaq added 0.1%.

U.S. Treasury yields rose, and the U.S. Dollar edged slightly higher. Gold fluctuated, closing slightly higher as it awaits today's inflation report in a cautious atmosphere. Oil prices closed higher after an upward gap at the open, with WTI surging 3.77% due to renewed U.S.-Iran tensions.

Key Events Today:

14:00 EU GERMANY CPI YoY Final APR **

17:00 EU ZEW Economic Sentiment May **

20:30 US CPI APR ***  

Tomorrow

04:30 API Crude Oil Stock Change ***

09:30 AU Wage Price Index Q1 **

17:00 EU GDP Growth Rate 2nd Est Q1 ***

17:00 EU Industrial Production MAR **

20:30 US PPI APR ***

22:30 EIA Crude Oil Stocks Change **  

EURUSD

Resistance: 1.1820 / 1.1856

Support: 1.1764 / 1.1728

Euro recorded a modest decline on Monday. While the Dollar gained on higher yields, the Euro held up relatively well as markets await the US CPI data.

Analyst View: Markets are bracing for potential volatility tonight. If the U.S. CPI is strong, the pair may test major moving-average support near 1.1760; conversely, a cooling inflation report could drive a breakout toward 1.1850.

Bias: Cautiously Bearish

GBPUSD

Resistance: 1.3634 / 1.3658

Support: 1.3556 / 1.3532

Sterling fell slightly on Monday amid political pressure on PM Starmer following Labor’s local election losses.

Analyst View: Price action was choppy yesterday, testing both recent highs and moving-average support. Tonight's US CPI will be the key catalyst for a directional breakout.

Bias: Cautious within Range

USDJPY

Resistance: 157.94 / 158.28

Support: 156.83 / 156.49

BoJ's Summary of Opinions suggested a need to address price volatility risks. Disappointing March household spending data reduced expectations for an immediate rate hike.

Analyst View: The pair reclaimed 157 and is testing 10-day moving average resistance. A breakout could target 158, though intervention fears remain.

Bias: Mildly Bullish

US Crude Oil Futures (JUN)

Resistance: 103.44 / 107.29

Support: 94.98 / 91.19

WTI briefly returned above $100 on Monday. The Oil price attracts significant bids as expectations that the United States, and Iran will reach a permanent ceasefire in the near term have faded.

Analyst View: Oil remains well-supported by Trump's recent comments. If it holds above $100, the focus shifts to the 10-day moving average and previous resistance near $103.44.

Bias: Mildly Bullish

Spot Gold (XAU/USD)

Resistance: 4743 / 4789

Support: 4678 / 4650

Spot Silver

Resistance: 81.22 / 83.03

Support: 79.16 / 78.37

Gold regained its footing after an initial drop yesterday, supported by safe-haven buying as peace talks stalled.

Analyst View: Gold is currently consolidating above $4,700. Tonight's US CPI will be decisive: high inflation may boost the USD and pressure Gold, while a lower reading could spark a breakout above $4,750.

Bias: Cautious within Range

Dow Jones Futures

Resistance: 50366 / 50936

Support: 49112 / 48562

The three major U.S. indices closed higher on Monday. Although earnings-driven momentum has slowed as the Q1 earnings season nears its end, the broader market remains driven by the ongoing AI boom. However, bank stocks continued to trend lower, and the stalemate in U.S.-Iran peace talks resulted in only modest gains for the Dow.

Analyst View: Dow has seen modest gains for two consecutive days, reflecting a "wait-and-see" sentiment in the market. Today's U.S. inflation data will determine whether the index breaks out of its recent narrow trading range. An upward move would target last week's highs, while a downward move would focus on support from major moving averages on the daily chart.

Bias: Range Bound

NASDAQ 100

Resistance: 29484 / 29868

Support: 28992 / 28607

Although most tech giants traded lower yesterday, the semiconductor sector significantly outperformed other industries as enthusiasm for AI-related trade remained high. The Nasdaq reached new record highs, though the gains were also modest as the market focused on the U.S.-Iran situation and today's US CPI release.

Analyst View: While Nasdaq continued to hit new highs yesterday, the pace of the rally has notably slowed and momentum has weakened. Tonight's U.S. inflation report will determine whether the streak of record highs is interrupted or extended.

Bias: Cautious at High Levels

Bitcoin (BTC/USD)

Resistance: 82326/82867

Support: 80022/79490

Bitcoin was little changed on Monday; gains were capped after a setback between the U.S. and Iran. Still, progress towards a U.S. regulatory framework kept the mood positive.

Analyst View: BTC/USD initially declined before rebounding, recovering to its one-week high band after testing the 10-day moving average. However, the price is testing this support level again this morning; whether it can hold this position will be the key factor in determining its short-term trajectory.

Bias: Short-term Bearish

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