The US dollar index softens, and the high-level talks between China and the United States have made substantial progress

On May 12, early trading in the Asian market on Monday, Beijing time, the US dollar index hovered around 100.57. Last Friday, the US dollar index weakened as the market waited and watched the Sino-US talks, and once fell to 100.08, and finally closed down 0.21% to 100.42. The benchmark 10-year U.S. Treasury yield closed at 4.3890%; the two-year U.S. Treasury yield closed at 3.9100%. As India-Pakistan relations continued to rise last week, spot gold continued to rebound after breaking $3,280 on Friday, finally closing up 0.68% to $3,326.46 per ounce. As China pointed out that the high-level economic and trade talks between China and the United States have made substantial progress, and Trump predicted that one of the most important and influential content will be released, spot gold opened lower by US$41 on Monday; on Friday, spot silver closed up 0.98% to US$32.72 per ounce. Oil prices hit their first weekly gain since mid-April last Friday as the U.S. eased trade conflicts with other countries. WTI crude oil approached $61 and finally closed up 1.29% at $60.99 per barrel; Brent crude oil closed up 1.14% at $63.88 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 100.57. The dollar performed strongly last week, with the dollar index recording weekly gains, mainly due to the conclusion of the U.S.-U.K. trade agreement and market optimistic expectations for talks between China and the United States. At the beginning of the week, the US dollar rose steadily against major currencies, especially against the Japanese yen and Swiss francs. However, the dollar saw a slight correction on Friday, down 0.01% against the Swiss franc to 0.83150 and 0.39% against the yen against the yento 145.355. Technically, if the U.S. dollar index closes below support level 100.20–100.40, it will move towards 99.81 of 50MA.

Euro: As of press time, the euro/dollar hovers around 1.1235. Eurozone inflation expectations have risen due to the threat of Trump tariffs, and markets are concerned about its potential impact on economic growth. The ECB maintains its ultra-loose monetary policy unchanged, leaving room for near-term stimulus measures. The risk aversion sentiment triggered by the Russian-Ukrainian conflict has provided certain support for the euro, but it is not enough to offset the impact of the strong US dollar. Technically, if this attempt is successful, the EUR/USD will move to the next resistance level, which is at 1.1450–1.1470.

GBP: As of press time, GBP/USD is hovering around 1.3286. The pound fell briefly after the U.S.-UK trade deal was announced on Thursday, but New York rebounded 0.50% to 1.3306 on Friday. The pound held the key support level of 1.3275, and the overall trend was affected by a mix of unexpected improvement in UK retail data and a rate cut in the Bank of England. UK retail sales data in March increased by 0.4% and the market's original expectations fell by 0.4%, providing support for the pound. The Bank of England cut interest rates, and Governor Bailey said the rise in the consumer price index could be a temporary phenomenon. The UK Debt Management Office adjusted its government bond issuance plan for fiscal year 2026 to alleviate the pressure of long-term Treasury bond selling and further support the stabilization of the pound. Technically, if GBP/USD climbs above the 1.3320 level, it will move towards resistance at 1.3400–1.3420.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On the Asian session on Monday, gold trading around 3277.08.21. The talks made substantial progress as the high-level economic and trade talks between China and the United States were held in Geneva, Switzerland last weekend; this has boosted the market's risk-taking sentiment and suppressed the safe-haven buying demand of gold. The news that Putin proposed to resume direct negotiations between Russia and Ukraine in Türkiye on the 15th and the India-Pakistan ceasefire also hit the morale of gold bulls.

Technical: From a technical perspective, if the daily closing of gold is below $3,300/ounce, the gold price may target the cycle low of $3,202/ounce on May 1. As gold prices fall below the first support area of ​​$3290-3300/ounce, gold prices may fall further to $3230/ounce (lower edge of the upward channel), then the $3200/ounce integer mark.

2) Analysis of crude oil market trends

On the Asian session on Monday, crude oil trading was around 60.75. The prospects of the US-UK agreement and China-US meeting have driven a rebound in risk appetite, and combined with the improvement of China's import and export data, they have formed the cornerstone of the rebound in oil prices. Technically, after WTI crude oil breaks through the $60 mark, it may continue its volatile upward trend in the short term, but OPEC+ production increase and geopolitical risks are still potential negative.

Technical: From the technical indicators, there is short-term pressure around the middle rail of the Bollinger band ($60.91), but the MACD columnar line turns from negative to positive (0.43), DIFF (-1.58) and DEA (-1.80), and RSI (48.94) approaches the neutral range, indicating that the long and short forces tend to be balanced. If the price stands above $60, it may further challenge the upper rail pressure level of $64.92.

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