Market Overview
Significant developments in global trade and geopolitical relations continue to shape market expectations and sentiment. This section outlines the key international events influencing the current financial landscape.
The United States has officially withdrawn from active mediation in the Ukraine peace talks as of May 2025, shifting the burden of negotiation directly to Russia and Ukraine. This move comes after months of stalled discussions, Russia’s rejection of core proposals, and growing U.S. frustration over a lack of tangible progress—despite earlier ceasefire agreements brokered with U.S. support.
In the Middle East, geopolitical risk has surged following a hypersonic ballistic missile strike targeting Ben Gurion Airport in Israel. Despite interception efforts using Israel’s advanced U.S.-supplied defense systems—including THAAD and Arrow—the missile was not neutralized. The Houthi-claimed attack resulted in injuries, flight suspensions, and triggered heightened military responses from both Israel and the U.S., pointing toward an escalation in regional tensions.
Meanwhile, in Southeast Asia, tensions between China and the Philippines in the South China Sea remain volatile. Recent incidents near Sandy Cay have escalated symbolic and military posturing on both sides, with joint U.S.-Philippine military exercises further aggravating Beijing. China continues to assert sweeping territorial claims backed by its military presence, while the Philippines—backed by U.S. support—defends its maritime sovereignty. This remains a key flashpoint that could erupt into a broader regional conflict.
Adding further strain to global markets, eleven countries, mainly members of the Commonwealth of Independent States (CIS), have announced their intent to end the use of the U.S. dollar in international transactions starting in 2025. These countries include:
- Russia
- Belarus
- Ukraine
- Armenia
- Azerbaijan
- Kazakhstan
- Kyrgyzstan
- Moldova
- Tajikistan
- Turkmenistan
- Uzbekistan
This de-dollarization effort is already underway, with increasing use of local currencies for cross-border trade within the bloc. While the long-term impact is still unfolding, it reflects a broader geopolitical pivot away from U.S. financial dominance.
Despite these pressures, market sentiment remains focused on upcoming Federal Reserve decisions, global trade policies, and former President Trump’s proposed tariffs. However, the importance of closely monitoring geopolitical developments cannot be overstated, as they continue to influence market behavior beneath the surface.
Market Analysis
GOLD
Gold prices are experiencing increased bullish momentum driven by rising geopolitical tensions. Prices are currently approaching the EMA200 and the lower boundary of the consolidation zone, which may act as the next resistance level before continuation. Despite progress in U.S.-China trade talks, the ongoing South China Sea tensions could derail further cooperation. Until technical indicators confirm a stronger bullish structure, we maintain a cautious bullish outlook.
SILVER
Silver is exhibiting renewed selling pressure after failing to break above the EMA200. The MACD reflects bearish momentum, albeit with subtle development, while the RSI is trending downward from overbought levels. Overall, the setup supports further downside potential.
DXY (U.S. Dollar Index)
The Dollar continues to maintain a bullish structure, with prices bouncing off the EMA200. The MACD appears poised for a bullish crossover, suggesting renewed upside momentum after a corrective phase. The RSI is also supportive of continued gains. However, rate expectations are shifting:
- Market-implied probability for a June rate cut has fallen to 37%, down from 64% a month ago.
- Nonfarm payrolls increased by 177K (vs. 130K forecast), although the March print was revised lower to 185K.
These figures do not yet reflect the impact of new tariffs imposed on April 2. Slower job growth is anticipated in the coming months as the effects materialize.
GBP/USD
The Pound remains technically consolidated, although price action suggests support for a bullish structure despite being under the EMA200. The MACD is neutral, while the RSI hints at potential continuation of selling from overbought levels. A decisive break in structure will be needed for clarity.
AUD/USD
The Aussie dollar is showing clear bullish momentum, supported by a rising MACD and a recovering RSI from previously overbought conditions. The overall price structure remains positive, and as such, we anticipate continued upside—especially if U.S.-China trade talks yield further progress.
NZD/USD
The Kiwi is also experiencing renewed bullish movement. Both the RSI and MACD are trending higher, signaling growing buying interest. While earlier conditions were overbought, current technicals suggest further room to the upside.
Markets have fully priced in a 25 basis point rate cut at the upcoming central bank meeting, with expectations that the policy rate could bottom out at 2.75% by October, which supports the bullish case.
EUR/USD
The Euro remains range-bound, with no clear break in structure. As such, we refrain from calling a directional bias until technicals show a definitive breakout or breakdown.
USD/JPY
The Yen is showing early signs of a bullish reversal, albeit within a consolidation phase. The EMA200 is sloping upward, suggesting underlying demand. The RSI is rising from oversold territory, and the MACD supports continued buying, despite limited price movement. We expect this bullish structure to develop further in the coming sessions.
USD/CHF
The Franc maintains an overall bullish bias, though price action is currently consolidating. We are monitoring for signs of continuation but will withhold directional confirmation until a breakout occurs.
USD/CAD
CAD remains in a consolidation phase, continuing its bearish trend with no clear breakout. We refrain from making any directional calls until a decisive move confirms the next leg of the trend.
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
Geopolitical tensions are creating ripples across global markets, driving sentiment in commodities like gold and impacting forex pairs such as EUR/USD and USD/JPY. While the Dollar remains structurally strong, weakening fundamentals and looming rate policy shifts may change its trajectory. Meanwhile, AUD and NZD are showing bullish momentum, supported by improving trade sentiment and central bank expectations.
Staying attuned to both macroeconomic indicators and political developments will be critical in forming adaptive forex trading strategies moving forward.
