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- The Week in FX and Crypto: May 19, 2026
The Week in FX and Crypto: May 19, 2026
30 Years of Market Structure, Distilled Weekly.
mark schaefer
May 19, 2026
In This Issue
FX Recap — markets becoming more two-way
EUR/USD — bullish reversal from oversold conditions
USD/JPY — BOJ and 160 back in focus
BTC — bearish confluence at 82k
Crude Oil — trading near the highs
EURAUD — bullish divergence
FX Recap
Markets continued swinging between “risk-off” escalation fear and “risk-on” optimism surrounding a possible Iran agreement, with FX price action remaining heavily tied to developments out of the Middle East. Peace negotiation headlines periodically pressured the dollar lower, while renewed escalation and continued Strait of Hormuz concerns quickly brought safe-haven USD demand back into the market.
At the same time, market behavior may be starting to shift. Despite higher oil prices and renewed geopolitical tension, USD price action became increasingly two-way rather than cleanly directional — suggesting much of the positioning tied to the conflict has already adjusted. Meanwhile, BOJ intervention continues to be a major FX story with all eyes on 160. The pair has been grinding higher since the intervention.
EUR/USD
EUR/USD traded sharply lower on Friday, closing below the lower Bollinger Band and printing a new multi-week low at 1.1617.
Improvement in sentiment around Iran overnight helped trigger a bullish reversal from oversold conditions, with EUR/USD recovering to close near the highs of the session around 1.1655.
The near-term target is the 20-day moving average at 1.1707. On continued strength, the next objective is the upper Bollinger Band and the recent cluster of highs in the 1.1780/90 area.
The setup would be negated on a close back below last night’s low at 1.1595.
USD/JPY
USD/JPY has now posted six consecutive higher highs, closing at 158.85 — the highest daily close since the sharp BOJ-driven reversal from above 160 earlier this month.
Importantly, the move higher has been a slow grind rather than an aggressive momentum-driven rally, which typically is not the type of price action seen near major tops. At the same time, 160 remains the key psychological and intervention-sensitive level, where the BOJ has previously stepped in both verbally and directly.
My reversal model remains sidelined on USD/JPY longs for now.
That said, USD/JPY did print a bearish reversal bar on the 4-hour timeframe from overbought territory, suggesting the move may be starting to encounter some near-term headwinds.
Key levels to watch remain 160.00 on the topside, followed by the 20-day moving average at 158.22 on any pullback, and then the lower Bollinger Band near 155.83.
BTC
BTC continues to respect the broader Fibonacci roadmap and reversal structure mapped out over the past several weeks.
A major bearish confluence zone between 81k–83k was flagged multiple times in the Meridian Compass feed during late April and again on May 11th, with several bearish divergences developing on the daily timeframe as price pushed into resistance. The move ultimately stalled near the 82k area before selling off to 76k.
Momentum is now approaching oversold territory following the decline, which suggests the market may transition into a more consolidative phase in the near term rather than immediately extending lower.
The broader focus remains on whether BTC can stabilize above the mid-70k area and begin rebuilding structure, or whether rallies continue failing into resistance as momentum resets.
Crude (June)
Crude continues to trade almost entirely off Iran and Strait of Hormuz headlines, with sharp intraday swings in both directions depending on developments around negotiations and escalation risk.
Despite the volatility, June crude remains near the upper end of its broader range and continues holding above key support levels. The most important upside level remains the reversal bar high at 110.93, which marked the peak of the latest geopolitical spike.
On the downside, the 50-day moving average near 94.95 remains the key near-term support level on any broader pullback.
For now, technicals continue taking a back seat to the geopolitical story, with crude likely remaining headline-driven until there is meaningful clarity on Iran or the Strait.
EUR/AUD
EURAUD has resumed the broader move lower that began back in December, with price continuing to trend beneath the 20-day moving average — a level it has not closed above in more than a month.
The recent low near 1.6142 printed a bullish divergence, suggesting downside momentum may be starting to slow.
If the divergence setup holds, the first upside level to watch is 1.6289, where the 20-day moving average currently comes in. Beyond that, 1.6416 would be the next objective on any broader extension higher.
On the downside, the lower Bollinger Band near 1.6148 remains the key support area, followed by the recent low at 1.6110.
Week Ahead
The broader macro backdrop remains unchanged. Iran, energy prices, and ongoing Strait of Hormuz uncertainty continue driving much of the price action across FX, commodities, and crypto markets. While negotiations remain ongoing, markets are still highly sensitive to any shift in rhetoric surrounding escalation or a possible agreement.
USD/JPY and BOJ intervention risk remain another major focus area. The slow grind back toward 160 continues to keep markets on alert for possible verbal or direct intervention from Japanese officials if price action becomes disorderly again.
Market Notes
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Next Tuesday: Weekly market update. — Mark
Meridian Compass is brought to you by Mark Schaefer, a portfolio manager with over 30 years experience developing and trading systematic strategies in global futures and FX at major banks and hedge funds.
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