Trump's attitude towards Europe has changed his mind again, and Fed officials have begun to consider postponing interest rate cuts!

On May 26, early trading in the Asian market on Monday, Beijing time, the US dollar index hovered around 98.92. Last Friday, US President Trump once again threatened to escalate the trade war, suggesting that a 50% tariff was imposed on the EU from June 1. The US dollar index continued to decline during the day and fell to around the 99 mark at one point, and finally closed down 0.83% to 99.10. The benchmark 10-year U.S. Treasury yield closed at 4.518%; the two-year U.S. Treasury yield closed at 4.004%, which is more sensitive to monetary policy. Due to the increase in safe-haven demand, spot gold once rose by more than 2%, reaching a high of $3365.91, and finally closed up 1.87% to $3356.21 per ounce. Spot silver closed up 1.33% to $33.46 per ounce. On Monday, gold opened lower, and the intraday decline once widened to $15. Perhaps because some investors chose to cover short positions before the US holiday, the two oils rebounded and rose by more than 1% during the day. WTI crude oil fell first and then rose, and quickly rose above $61 during the US session, finally closing up 1.51% to $61.56/barrel; Brent crude oil closed up 1.35% to $64.4/barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 98.92. Market participants will focus on comments from Fed officials, along with minutes of FOMC meetings, preliminary first-quarter GDP, core PCE price index, personal income and expenditure, durable goods orders and commodity trade balance, all of which will be released this week to get new clues about the U.S. economic outlook and monetary policy direction. Technically, around 100.30The 50-period moving average is now strong resistance, while the direct support of 98.90 is under test. Momentum is beneficial to sellers unless the US dollar index regains the 100.00 mark.

Euro: As of press time, the euro/dollar hovers around 1.1393. The euro is favored by overall weakness in the dollar. The “sell the U.S.” trend continues as investors sell bonds, U.S. stocks and the U.S. dollar. The trend was triggered by US President Donald Trump's "trade war" and Moody's downgrading the U.S. government debt rating from AAA to AA1. Technically, the euro is still above 50-SMA1.1245, indicating that bullish bias still exists. Traders are paying attention to whether the pair can break through the 1.1370 resistance zone. Unless new tariffs are raised, the EUR/USD may consolidate above 1.13 in the short term.

GBP: As of press time, GBP/USD is hovering around 1.3556. The pound hit a three-year high against the US dollar (USD) last Friday, at about 1.3535, amid optimistic UK retail sales figures and growing concerns about US fiscal imbalances. The U.S. dollar index (DXY) tracks the value of the dollar against six major currencies, falling to a near two-week low of about 99.30. Technically, GBP/USD is currently trading at 1.3357 above its 50SMA, confirming a short-term uptrend. Resistance is around 1.3560 at the February 2022 high, and continued momentum may test that level. Unless there is an unexpected U.S. policy, the strength of the pound may continue until next week.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On the Asian session on Monday, gold trading around 3341.33. Gold prices attracted some sellers at the start of the new week and eroded a portion of Friday's strong gain to more than two-week highs, although downside potential appears to be limited. U.S. fiscal concerns, escalating geopolitical tensions, the Federal Reserve's bets on interest rate cuts and a lack of dollar buying should continue to support gold. Therefore, any subsequent decline may be considered a buying opportunity and remains limited.

Technical: From a technical point of view, the overnight callback from the two-week high shows a certain elasticity below the 23.6% Fibonacci retracement level that moved upward from the monthly low touched last week. In addition, the oscillation indicator on the hourly/day chart remains positive.Region, the path with the least resistance of gold prices is still upward. Near the overnight swing high (near $3,346), some subsequent buys will reaffirm the constructive outlook and regain the XAU/USD pair’s integer digits at $3,400. On the other hand, any meaningful break below the $3,300 mark could find some support near the $3,260-$3,258 convergence point—including 38.2% Fibonacci. Retracement bit and 200-period simple moving average (SMA) on the 4-hour chart. The latter should be a key point, and if it breaks decisively, it may easily accelerate the decline of gold to the 3,232% retracement level near the $50 area, thus reaching the $3,200 integer.

2) Analysis of crude oil market trends

On the Asian session on Monday, crude oil trading was around 61.55. Traders spent a week digesting reports that OPEC+ could approve 411,000 barrels per day in July, a move that would increase the 1 million barrels per day already scheduled between April and June. While no formal agreement has been announced, the tone of core oil-producing countries (especially Saudi Arabia) suggests that they are turning to regaining market share rather than defending prices.

Technical: From a technical perspective, traders' reaction to the $62.59 turn will set the tone for this week. Continuous breakthroughs beyond this level will indicate that there are buyers. This could lead to a price break above $64.40 and focus on the 52-week moving average of $67.78. If the seller continues to defend $62.59, then look for a sell-off that could extend to $59.20 pivot support. Rising to this level may attract buyers.

Forex market trading reminder on May 26, 2025

21:00 European Central Bank Governor Lagarde delivered a speech

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