Market Analysis

GOLD

GOLD prices have retracted from recent highs following yesterday’s trading. This retracement was anticipated after a strong bullish surge. Currently, we are seeing a slowdown in both the MACD and RSI, suggesting a short-term pause. However, this move is likely part of a normalization phase in the broader bullish trend. Prices continue to respect overall market momentum, and we expect further buying to take place in the coming days. This price action aligns with economic indicators showing ongoing global economic uncertainties, supporting the continuation of gold’s upward trend in the longer term.

SILVER

SILVER remains consolidated, with no significant breakout yet. We maintain our outlook from yesterday and continue to allow more time for price to develop. We still expect a bullish breakout, but patience is key. As with gold, economic indicators suggest a favorable environment for silver to outperform, although it might take some time before a clear breakout is confirmed.

DXY

Some interesting developments unfolded yesterday, particularly with strength returning to the U.S. Dollar following market relief sparked by Trump’s remarks on Fed Chair Jerome Powell and trade relations with China. On Powell, Trump said:

“I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.”

Regarding China, Trump struck a more optimistic tone, suggesting that a trade deal could “substantially” reduce tariffs. He clarified that while tariffs won’t go to zero, they also won’t remain near current levels—implying some relief for markets.

These developments have briefly strengthened the dollar, which could temporarily pressure the metals market. However, this impact is expected to be short-lived, as markets will eventually shift focus back to the Fed’s actions regarding rate cuts. Major currency pairs are likely to respond accordingly, with the USD gaining some short-term strength.

We do not expect a full reversal in gold or silver prices—rather, a potential consolidation period before the next leg higher, influenced by shifting economic indicators and trade news.

GBPUSD

The Pound has pulled back from its highs and looks poised to consolidate for a while. The MACD is signaling bearish strength, while the RSI shows oversold conditions, hinting at a possible bullish reversal. This could also signal the bottom of a new consolidation range, depending on how the dollar moves in the coming sessions. Trade timing will be key in deciding whether to enter positions during the consolidation phase or wait for confirmation of a breakout.

AUDUSD

The Aussie Dollar remains firm but is teetering on a potential shift toward bearish momentum. Prices are currently testing the 0.64086 support level, and both the RSI and MACD show signs of possible bearish continuation. A clear break is needed for confirmation, but for now, we expect continued consolidation. As we approach upcoming economic reports, trade timing will be critical in determining the next move for AUDUSD.

Markets still expect the RBA to cut its 4.10% cash rate by 25 basis points at the May 20 meeting, abandoning earlier expectations of a larger 50 bps move. This rate cut could further influence breakout entries in the AUDUSD.

NZDUSD

The Kiwi has held its ground better than other currencies despite the resurgence in dollar strength. The improved outlook for U.S.–China trade is seen as a positive for New Zealand, given its close economic ties to China. The economic indicators surrounding the trade deal should continue to support NZD strength in the near term.

Investors remain confident that the RBNZ will lower its 3.5% cash rate by 25 basis points on May 28, with expectations of further easing to 2.75% by year-end. This combination of monetary easing and improved trade prospects supports a longer-term bullish case for the Kiwi.

EURUSD

The Euro has weakened due to the dollar’s sudden surge in strength. However, the decline appears to be more of a retracement than a full reversal. The MACD reflects growing bearish volume, and the RSI also indicates a selling continuation. Despite this, overall price structure remains bullish, and we continue to look for buying opportunities on pullbacks. Major currency pairs like EURUSD will remain influenced by global economic data, particularly the strength of the U.S. Dollar.

USDJPY

The Yen is showing increased weakness after breaking below a previous consolidation range. This move was largely influenced by Trump’s comments, which sparked dollar strength. The pair quickly rejected the EMA200, respecting bearish market momentum. The RSI indicates overbought conditions, aligning with a bearish continuation outlook. While the MACD shows some bullish gains, we still favor further downside potential. Breakout entries below key levels in USDJPY could be a good opportunity for traders.

USDCHF

The Franc is weakening following a brief push higher. Overall price momentum has shifted bullish, and we expect prices to test the 0.83313 resistance level. The MACD and RSI both show growing momentum and volume, signaling renewed interest. However, this reflects the temporary weakening of safe-haven assets in light of renewed confidence in the USD. Major currency pairs like USDCHF are likely to show volatility based on geopolitical developments.

USDCAD

The CAD has remained relatively strong despite shifting U.S.–China trade dynamics. The de-escalation in trade tensions benefits global markets, including Canada. Still, CAD remains in consolidation, as prices struggle to break key levels. We await a clear breakout before confirming the next directional move. Traders should consider breakout entries as economic indicators evolve.

COT Reports Analysis

• AUD – WEAK (3/5)
  
• GBP – WEAK (3/5)
  
• CAD – WEAK (2/5)
  
• EUR – STRONG (5/5)
  
• JPY – STRONG (5/5)
  
• CHF – WEAK (4/5)
  
• USD – STRONG (5/5)
  
• NZD – WEAK (4/5)
  
• GOLD – STRONG (5/5)
  
• SILVER – STRONG (4/5)

Final Thoughts

The global market continues to evolve, with economic indicators playing a crucial role in shaping the direction of assets like gold, silver, and the U.S. Dollar. Major currency pairs are influenced by geopolitical events and trade negotiations, creating both risks and opportunities for traders. As trade timing becomes more critical, careful analysis of breakout entries is essential for success. Despite short-term consolidations, the bullish outlook for gold and silver remains intact. Keeping a close eye on economic indicators and adapting strategies accordingly will help traders navigate the markets effectively in the coming weeks.