In This Issue

• FX Recap — BOJ delivers, USD finds support, markets reset

• USD/JPY — squeeze plays out, bounce capped, structure shifts lower

• EUR/USD — range trade, oversold momentum, fade the dips

• Crude — breakout above 101, bearish reversal, key levels to watch

• BTC — bearish setup negated, 83,448 next target

FX Recap

Last week's dominant theme was the BOJ delivering on what the market had been pricing — a sharp move through 160 in USD/JPY, followed by suspected intervention that reversed the pair aggressively. The squeeze I flagged last week played out exactly as the structure suggested: shorts leaning on 160, pair grinds through, intervention hits, fast move lower.

Heading into this week, renewed geopolitical tensions are keeping the dollar supported. USD looks like it will consolidate in the near term barring any significant news on Iran and the Strait of Hormuz. No clear directional conviction yet — this is a market waiting for the next catalyst.

The FOMC held as expected last week. Powell's tone was cautious — energy prices staying bid and inflation sticky leaves the Fed little room to sound dovish. The ECB held as well. Central bank policy is now largely on hold, and geopolitical developments remain the primary driver across FX and commodities.

USD/JPY

The setup I outlined last week — shorts leaning on the theoretical BOJ seller at 160, squeeze risk building — played out. Price pushed through 160, suspected intervention hit, and the pair sold off sharply.

The bounce off the lows has been capped at 157.25/30, with momentum now in the neutral zone but still pointing lower. After two consecutive closes below the lower Bollinger Band at 157.02, a close back above that level could signal some near-term stabilization. Until then, the structure favors further downside on any rallies.

EUR/USD

EUR/USD is trading near the middle of its multi-week range around 1.1705, with momentum moving into oversold territory. The outer bounds of the range sit at 1.1655 to the downside and 1.1850 to the upside. With the 20-day moving average at 1.1725 acting as near-term reference, dips into the lower end of the range are likely to find support.

The setup here favors consolidation — fading moves toward the extremes rather than chasing direction. No strong conviction until price breaks cleanly outside the range.

Crude (June)

Crude broke above the top of the multi-week channel at 101 last week on a combination of macro and geopolitical catalysts — U.S.–Iran talks stalled, the market began pricing a prolonged supply disruption, the U.S. signaled a potential extended blockade of Iranian oil, and an inventory shock confirmed tighter supply. The move was the real deal.

However, Thursday printed a bearish reversal candle with momentum extremely overbought. That's a meaningful signal after a breakout of this size. The key question now is whether 101 — the top of the prior range — holds as support on a pullback, or whether price fails back into the range. The 20-day moving average at 94.26 is the next level of significance below.

To the upside, 107.58 (upper Bollinger Band) and 110.93 (the reversal bar high) are the levels to watch on any continuation. For now, the structure is bullish but stretched — and worth monitoring closely.

BTC

BTC printed bearish engulfing candles on both April 27th (79,486) and April 29th (79,488), pointing to a retest of recent lows. That bearish structure was negated on the break above 80,000 Monday morning — a clean flip.

With the setup now bullish, the next key level to the upside is 83,448, which is the 61.8% Fibonacci retracement of the move from the January 14th high to the February 6th low. On a pullback, 72,739 (38.2% Fib) is the key support level to watch.

Week Ahead

Iran and the Strait of Hormuz remain the macro anchor. Any meaningful shift toward escalation or resolution will continue to drive price action across FX, crude, and risk assets broadly. With central banks largely on hold, this is a geopolitically-driven market — and it will stay that way until the narrative shifts.

Watch 101 in crude, 157.02 in USD/JPY, and 83,448 in BTC as the key levels that will define direction this week.

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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