Market Overview
Significant developments in global trade and geopolitical relations continue to shape market sentiment. This section highlights key global events influencing market behavior.
The United States has formally withdrawn from mediation in the Ukraine peace talks as of May 2025, shifting negotiation responsibilities directly to Russia and Ukraine. This comes after months of failed discussions and Russia’s rejection of core proposals. U.S. frustration over stalled progress has led to this decisive exit.
In the Middle East, risk surged following a hypersonic missile strike at Ben Gurion Airport in Israel. Despite interception efforts via THAAD and Arrow defense systems, the missile was not neutralized. Claimed by the Houthis, the attack caused injuries, disrupted flights, and escalated military responses from both Israel and the U.S.—amplifying regional instability.
In Southeast Asia, China and the Philippines are locked in growing tensions over the South China Sea. A confrontation near Sandy Cay has prompted increased symbolic and military actions. Joint U.S.-Philippine drills have further aggravated Beijing, while China’s militarization continues to assert control. This remains a flashpoint with high volatility potential.
Adding further complexity, eleven CIS countries—including Russia, Belarus, and Kazakhstan—have announced plans to abandon the U.S. dollar in cross-border transactions starting this year. The de-dollarization shift reflects a broader rejection of U.S. financial influence and a geopolitical pivot toward economic independence within the bloc.
Despite these destabilizing developments, global markets remain focused on upcoming Fed policy decisions, former President Trump’s tariff proposals, and broader trade policy shifts. However, the undercurrent of geopolitical tension will continue influencing market sentiment and trader positioning.
Market Analysis
GOLD
Gold prices are gaining bullish momentum, supported by geopolitical risk. Prices are nearing the EMA200 and the lower consolidation boundary, which may act as near-term resistance. The South China Sea tensions pose a threat to U.S.-China trade progress, potentially supporting further upside. While technical indicators suggest caution, the outlook leans bullish with potential for upward continuation upon confirmation.
SILVER
Silver has resumed its bearish structure, failing to sustain above the EMA200. The MACD shows developing bearish momentum, while the RSI trends downward from overbought levels. Technical indicators support further downside unless new catalysts emerge to shift sentiment.
DXY (U.S. Dollar Index)
The Dollar remains in a bullish phase, rebounding off the EMA200 with the MACD nearing a bullish crossover. The RSI also points to continued strength. However, rate cut expectations are shifting:
- June rate cut probability dropped to 37% (from 64%)
- April’s NFP: +177K (vs. 130K expected)
- March revised down to 185K
- New tariffs (effective April 2) not yet priced in
- Job growth may slow in the months ahead
Despite economic concerns, technicals suggest continued short-term bullish movement for the dollar.
GBP/USD
The Pound remains in a range-bound pattern. Although price action hints at a potential bullish structure, it’s still trading below the EMA200. The MACD is neutral, and the RSI signals potential for more selling. A break above key resistance is required for bullish confirmation.
AUD/USD
The Aussie shows bullish continuation, supported by rising MACD and a recovering RSI. As long as the U.S.-China trade outlook remains favorable, AUD/USD is positioned for further gains. Price structure supports an upside breakout scenario.
NZD/USD
The Kiwi continues to climb, with MACD and RSI both pointing upward. Although previous signals showed overbought conditions, the current setup indicates room for more upside. Markets expect a 25bps rate cut soon, with rates potentially hitting 2.75% by October—providing additional context for the bullish bias.
EUR/USD
The Euro remains stuck in a range, with no confirmed breakout in either direction. Until technicals show a clean break, we avoid assigning a directional bias. Watch for movement beyond consolidation boundaries for trend clarity.
USD/JPY
The Yen is forming a bullish reversal structure within consolidation. EMA200 is upward-sloping, suggesting latent demand. RSI is rising from oversold territory, and MACD shows potential for continued upside. A breakout could confirm trend acceleration.
USD/CHF
The Franc remains bullish overall but is consolidating. Price action lacks decisive direction, and we await a breakout to confirm the next leg. Technicals remain supportive above key moving averages.
USD/CAD
The Loonie continues to consolidate within a bearish trend. Without a clean breakout, no directional confirmation can be made. Patience is advised while watching for technical resolution.
COT Reports Analysis
- AUD – WEAK (4/5)
- GBP – STRONG (4/5)
- CAD – WEAK (3/5)
- EUR – STRONG (5/5)
- JPY – STRONG (5/5)
- CHF – WEAK (2/5)
- USD – MIXED
- NZD – STRONG (2/5)
- GOLD – STRONG (2/5)
- SILVER – STRONG (5/5)
Final Thoughts
Global markets are entering a new phase of volatility, driven by de-dollarization efforts, escalating geopolitical conflict, and structural economic shifts. While GOLD is buoyed by uncertainty, SILVER continues to retreat. The U.S. Dollar remains firm—supported by short-term data—but faces pressure from shifting rate expectations. Major pairs like AUD/USD and NZD/USD show bullish trends, while EUR/USD and USD/CAD remain range-bound. Traders should adapt long-term forex trading strategies with cross currency analysis, correlation insights, and proper forex risk management in swings to navigate the evolving landscape.