official Daily Market Analysis From Forexmart.eu

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The Dollar Keeps Moving Forward

The approval by the House of Representatives of what Donald Trump called a "big and beautiful" tax-cut bill, along with a rise in the U.S. composite PMI from 50.6 to 52.1, helped the U.S. dollar regain its footing. EUR/USD fell below the 1.13 level. However, if the U.S.-born financial "contagion" spreads to the broader global financial system, the euro could ultimately benefit.

The downgrade of the U.S. credit rating and a poorly received 20-year Treasury auction accelerated the rise in Treasury yields. Yields on 30-year bonds are hovering near their highest levels since 2007. Similar trends are being observed in other countries as well. For example, Japan's 30-year government bond yield recently hit a new record high since data collection began in 1999.

Bond Yield Trends

Investors increasingly believe that governments can no longer afford to accumulate debt at the pace seen when interest rates were near zero. Meanwhile, central banks—led by the Federal Reserve—are in no hurry to cut rates amid trade wars, high tariffs, and rising inflation risks. A global financial crisis, where governments' growing fiscal appetites are left unfunded, would push investors to seek safe havens. And that status has been lost by the U.S. dollar.

In the recent past, the logic was simple: when the global economy weakened, traders bought the U.S. dollar; when it improved, they favored the euro. But Donald Trump's return to the White House has turned everything upside down. Distrust in the policies of the 47th U.S. president has made American assets appear unsafe. Today, gold, the Japanese yen, the Swiss franc, and German government bonds look more attractive as safe-haven alternatives.

For now, investors are focusing on divergence in economic growth. The eurozone composite PMI fell below the critical 50 level in May, signaling GDP contraction in the currency bloc. In contrast, U.S. business activity rose to a two-month high.

European Business Activity Dynamics

Thus, while EUR/USD bears are supported by stronger U.S. business activity compared to Europe and the Fed's reluctance to restart a monetary easing cycle—at least until September—bulls have their own arguments. These include mistrust of the U.S. dollar, concerns about the stability of the American fiscal system, and capital flows shifting from North America to Europe.

Technical Outlook

On the daily chart, EUR/USD rebounded from its fair value at 1.1335. Key support lies near the lower boundary of the 1.122–1.141 range, where several moving averages are clustered. A rebound from this level could support a buildup of long positions, while a breakdown would signal a potential trend reversal and justify short-term selling.
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EUR/USD Weekly Preview: FOMC Minutes, Core PCE Index, U.S. GDP

The upcoming week promises to be volatile. First, several significant macroeconomic reports will be released in the U.S. Second, the intrigue surrounding Donald Trump's new tariffs on EU goods is expected to be resolved. This is the final week of the month when the most critical data for the U.S. dollar is published. This suggests that the EUR/USD pair is likely to enter a zone of price turbulence without delay.

Monday
On the surface, Monday's economic calendar appears empty. Only European Central Bank President Christine Lagarde and Bundesbank President Joachim Nagel are scheduled to speak. Moreover, U.S. markets will be closed in observance of Memorial Day.

However, this doesn't mean EUR/USD will remain range-bound. First, traders will react to Jerome Powell's speech on Sunday at 08:40 EST. More importantly, the market will digest Donald Trump's statement recommending a 50% tariff on EU goods starting June 1. This announcement came late Friday during the U.S. session, so it will likely continue to affect EUR/USD on Monday. Over the weekend, Brussels reacted sharply to the U.S. President's controversial statement. EU Trade Commissioner Maros Sefcovic emphasized that EU-U.S. trade is "unmatched" and should be based on "mutual respect, not threats." He also noted that the EU "is ready to defend its interests," hinting that retaliatory measures, prepared as early as April, could be enacted.

In short, despite the sparse calendar and U.S. holiday, elevated volatility is expected at the start of the new trading week.

Tuesday
Tuesday's key reports will be released during the U.S. session. The focus will be on the April durable goods orders. After surging 7.5% in March, a significant decline of 7.9% is expected in April. Excluding transportation, orders are projected to fall by 0.1%.

The Conference Board Consumer Confidence Index will also be published. It has declined for five consecutive months, falling to 86.0 in April, the lowest since May 2020. May's forecast is 87.1, but the dollar could face substantial pressure if it shows another drop (i.e., below 86.0). Earlier, the University of Michigan's Consumer Sentiment Index plunged to 50.8, the lowest since June 2022. A weak Conference Board reading would reinforce the negative narrative for the greenback amid rising inflation expectations and renewed tariff fears.

Wednesday
The FOMC minutes from the May meeting will be released on Wednesday. At that meeting, the Fed left all policy parameters unchanged, with Jerome Powell stating that the Fed needed more clarity on how tariffs would impact the economy. He also downplayed the Q1 GDP slowdown, saying the U.S. economy remains in "good shape." The official statement reflected these themes.

The minutes are anticipated to convey a similar message: an optimistic outlook on current conditions alongside serious concerns about future risks, particularly due to trade tensions. The greater the concern, the more pressure it puts on the dollar. However, the minutes will influence EUR/USD only if they differ significantly from Powell's comments or the official statement.

Also, on Wednesday, the Richmond Fed Manufacturing Index will be released. In April, it dropped sharply to -13. A modest recovery is expected in May to -9, but the index will remain negative. The release will only support the dollar if it unexpectedly returns to positive territory, which is unlikely.

Two Fed officials will speak: Governor Christopher Waller, a voting member, and Minneapolis Fed President Neel Kashkari, who does not vote this year.

Thursday
The second estimate of Q1 U.S. GDP will be published on May 29. The first estimate showed a 0.3% contraction, following 2.4% growth in Q4 2024. Most analysts expect the second estimate to confirm the initial figure. If the data is revised downward, the dollar may come under added pressure, reviving talk of stagflation.

That said, market reaction might be muted since the Q1 GDP decline was primarily due to a 41% surge in imports, as businesses stockpiled ahead of the new tariff schedule. Thus, even if a revision happens, the market reaction may be short-lived. If the data matches expectations, it will likely be ignored.

In addition, the April Pending Home Sales report will be released. This early housing market indicator showed a 6.1% increase in March, but a 1.0% decline is expected in April.

Friday
On the final trading day of the week, the U.S. will release the Core PCE Price Index for April — the Fed's preferred measure of inflation. It slowed to 2.6% YoY in March after jumping to 3.0% in February. April's forecast is a modest rise to 2.8%. This would reinforce the Fed's wait-and-see approach, likely delaying any policy changes through June and July.

On paper, this would be a hawkish development, but not under current conditions, where inflation is rising while economic growth is slowing. The looming threat of stagflation will continue to cast a shadow over the dollar.

Conclusion
The coming week is packed with major macroeconomic events, but all of them will be overshadowed by trade-related developments. If negotiations between the U.S. and China make progress and talks with the EU resume constructively—for example, if Trump backs down on the 50% tariff threat—the dollar could not only recover lost ground but reach new highs. EUR/USD could fall back to the 1.1080–1.1190 range.

However, if the escalation continues — mainly if Trump follows through on the tariff threat and the EU retaliates — we could see EUR/USD rally toward 1.1440 (the upper Bollinger Band on D1). Considering current signals, the escalation scenario looks more likely.
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Optimism in Markets: Dollar General, Pinterest, Wells Fargo Stocks Rise to Lift Indexes

US Markets Close Higher as Chip Stocks Lead the Rally
U.S. stock indexes finished Tuesday's session in positive territory, driven by strong gains in chipmakers like NVIDIA. Investors welcomed the momentum, anticipating potential clarity on Washington's tariff policies and the prospect of renewed trade dialogue with key global partners.

Spotlight on Trump and Xi
Both President Donald Trump and China's leader Xi Jinping are expected to deliver remarks later this week, according to a Monday statement from the White House. This comes shortly after Trump accused China of breaching the Geneva agreement — a move he claims justifies the lifting of tariffs and other trade restrictions. Beijing firmly rejected the accusation, calling it unfounded and reaffirming its commitment to defending national interests.

White House Pushes for Trade Proposals by Wednesday
A draft letter circulated among negotiating partners reveals that the Trump administration is urging countries to submit their best trade offers by Wednesday. The move is part of a broader strategy to fast-track discussions and finalize agreements within a tight five-week window.

Markets Rebounded Strongly in May
The easing of harsh trade rhetoric from the White House last month reignited investor appetite for risk. As a result, the benchmark S&P 500 and tech-heavy Nasdaq posted their strongest monthly percentage gains since November 2023, signaling renewed confidence in the markets.

Wall Street Closes Higher with Tech Stocks in the Lead
Tuesday's Market Summary:

Dow Jones Industrial Average climbed 214.16 points (+0.51%) to 42,519.64;
S&P 500 rose by 34.43 points (+0.58%), closing at 5,970.37;
Nasdaq Composite gained 156.34 points (+0.81%), ending the session at 19,398.96.
Tech Sector Powers Ahead
The tech sector once again took center stage, with the S&P technology index (SPLRCT) advancing by 1.5%. Nvidia led the charge, with its shares surging 2.9% amid continued investor enthusiasm over AI developments.

Meanwhile, Broadcom hit a fresh all-time high after announcing it has begun shipping its newest networking chip, designed to supercharge artificial intelligence performance. The company's stock jumped 3.2% in response.

Labor Market Shows Mixed Signals
According to the U.S. Department of Labor, job openings saw an uptick in April, yet the increase in layoffs points to a cooling labor market. Economists view this as a potential consequence of lingering tariff concerns and broader economic uncertainty.

Manufacturing Orders Stumble
Census Bureau data revealed that U.S. factory orders dropped 3.7% in April — a sharp reversal from March's unrevised 3.4% jump. The fall suggests that the one-time boost from pre-tariff stockpiling has run its course.

Eyes on Friday's Jobs Report
Markets are now focused on Friday's upcoming employment data. The report is expected to offer a clearer picture of how escalating trade tensions are impacting the world's largest economy.

Wells Fargo Gains in Extended Trading
Wells Fargo shares closed up 1.2%, but extended trading saw the stock rise an additional 2%, reflecting post-market investor optimism.

Kenvue Stumbles as Retailers Slash Inventories
Shares of Kenvue tumbled by 6%, leading the losses on the S&P 500. The consumer health company revealed at a Deutsche Bank conference that retailers in both the U.S. and China are aggressively clearing out stock. The uncertainty surrounding potential tariffs has led distributors to pull back on inventory levels, putting pressure on the supply chain.

Dollar General Surges After Strong Forecast
Discount retailer Dollar General saw its stock leap 15.8% after the company raised its full-year sales outlook. Quarterly results exceeded expectations, signaling solid demand even in a choppy economic environment. Investors responded enthusiastically to the upbeat revision.

Pinterest Gets a Boost from JPMorgan Upgrade
Pinterest shares climbed 3.8% after JPMorgan upgraded the stock from "Neutral" to "Overweight." The change sparked increased buying, reflecting renewed confidence in the platform's monetization potential.

Reddit Faces Outage, Stock Dips
Reddit stock edged down 1.1% after technical issues disrupted access for more than 29,000 users, according to outage monitoring site Downdetector.com. The incident raised concerns over the platform's reliability.

Airbus Shares Take Flight Amid China Deal Rumors
European stocks posted modest gains Wednesday, supported by a 3.4% rise in Airbus shares. Bloomberg News reported that Chinese airlines may place a large aircraft order as early as next month — a development that energized investors despite broader trade worries.

STOXX 600 Extends Rally as Tariff Fears Ease
The pan-European STOXX 600 index inched up 0.3% by 07:07 GMT, extending its rebound by roughly 15% since early April lows. The positive mood was further buoyed by President Donald Trump's decision to pause broad-based tariffs and secure a trade deal with the United Kingdom.

PMI Data to Offer Insight on Tariff Impact in Europe
Later today, the release of Purchasing Managers' Index (PMI) data for the UK, eurozone, Germany, and France is expected to shed light on how escalating trade tensions have shaped economic performance across the region in May. The readings may provide early signs of whether tariffs are starting to drag on business sentiment and output.

ECB Poised to Cut Rates in Policy Pivot
Investors are closely watching Thursday's European Central Bank meeting, where officials are widely expected to cut interest rates by 25 basis points. If confirmed, this would mark the ECB's first step toward monetary easing — a strategic shift aimed at shielding the eurozone economy from global uncertainty.

U.S. Jobs Report in the Spotlight
On Friday, attention will shift across the Atlantic to the highly anticipated U.S. employment report. The data could prove pivotal in shaping the Federal Reserve's next policy moves, especially as markets try to gauge the balance between slowing growth and inflation risks.

Tech and Mining Lead Gains in Europe
Most sectors in European equity markets posted gains, with technology (SX8P) and mining (SXPP) stocks leading the advance. The upbeat performance suggests renewed appetite for risk among investors seeking value in cyclical industries.

Remy Cointreau Walks Back 2030 Sales Ambitions
Shares of Remy Cointreau dropped 2.6% after the French spirits group scrapped its long-term sales growth target for 2030. The company cited a combination of persistent U.S. underperformance, global tariff pressures, and broader market volatility as key risks undermining its outlook for the coming years.

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Trading Signals for GOLD (XAU/USD) for June 5-9, 2025: sell below $3,387 (21 SMA - 7/8 Murray)

Early in the European session, gold traded around 3,372, showing signs of exhaustion after reaching the weekly high of 3,387. We could expect a technical correction to occur in the coming hours toward the 21SMA or the 7/8 Murray EMA at 3,355.

If the bearish momentum is maintained, gold could continue its decline. To do so, we should wait for confirmation below 3,350, then the price could reach the 200 EMA at 3,277. Around that area, gold left a gap on May 29, and it is likely that it could be filled.

On the other hand, if bullish strength prevails, we could expect a technical rebound around 3,355. This area has provided gold with a good rebounding point in the past, and this time the price could reach the 8/8 Murray at 3,437.

This week, US employment data will be released, which could trigger strong volatility. This, in turn, could cause the price of gold to reach 3,437 or fall towards 3,270.

Our trading plan for the next few hours is to sell gold below 3,387 with a target at 3,359. Around this area, we should wait for a breakout or a technical rebound to occur before making a new decision.

[KostiaForexMart]

Gold prices are stable amid optimism about the negotiations between the United States and China

Gold prices rose slightly on Monday, as investors chose not to place large bets in anticipation of the results of trade negotiations between the United States and China. The spot price of gold rose 0.1% to $3,313.54 per ounce, while futures declined 0.4% to $3,333.80.

Three advisers to Donald Trump will discuss trade differences with their Chinese counterparts in London today, which is causing increased nervousness in the markets, and traders are avoiding long positions before negotiations. Although a complete elimination of tariffs is unlikely, the results of the discussions may improve the situation. However, the high cost of doing business in the United States and the growing budget deficit may increase inflationary pressures.

From a technical point of view, analysts expect spot gold to test the support level at $3,296, and a breakdown below this level could lead to a decline to $3,262. Gold is traditionally viewed as a safe haven asset in an environment of uncertainty and low interest rates. According to official data, the central bank of China increased its gold reserves for the seventh consecutive time in May.

At the same time, the spot price of silver rose 0.2% to $36.03 per ounce; platinum rose 1.6% to $1,187.80; palladium fell 0.1% to $1,045.61.

[KostiaForexMart]

No News Is Already Good News

Trade negotiations between the United States and China are set to continue for a second day, as both sides aim to ease tensions surrounding technology exports and rare earth elements.

Yesterday, representatives from both countries concluded their first day of talks in London after more than six hours of discussions. The delegations are expected to reconvene today, Tuesday.

"We're doing fine with China. It's not easy with China," President Trump told reporters at the White House on Monday. "I'm only getting good reports."

The U.S. delegation is led by Treasury Secretary Scott Bessent, joined by Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer.

Following the talks, Bessent told reporters that it was a good meeting, and Lutnick called the discussions productive. The Chinese delegation was led by Vice Premier He Lifeng, who left without speaking to the media. He was accompanied by Commerce Minister Wang Wentao and Deputy Minister Li Chenggang, the country's trade representative.

Experts note that Wang has been a key member of President Xi Jinping's entourage on international trips since his appointment in 2020, while Li is a seasoned negotiator who previously served as China's ambassador to the World Trade Organization.

Prior to Monday's meeting, the U.S. signaled its willingness to lift restrictions on the export of certain technologies in exchange for assurances that China would ease its limitations on rare earth exports—elements critical for a wide range of energy, defense, and tech products, including smartphones, fighter jets, and nuclear fuel rods. China currently accounts for nearly 70% of global rare earth production.

This proposed exchange is seen as a delicate diplomatic maneuver in the ongoing tech standoff between the two superpowers. Washington, in urgent need of supply chain diversification, is struggling to find alternative sources of rare earths. In return, lifting tech export restrictions could encourage Chinese companies to enhance their domestic capabilities and reduce reliance on Western suppliers. However, executing such a deal is far from simple. First, the U.S. must be assured that China will follow through on easing rare earth export limits. Second, even if it does, this won't solve America's long-term dependency. Significant investment in domestic mining and processing capabilities is needed, along with building partnerships with other rare earth-rich nations.

Specifically, the Trump administration is reportedly willing to repeal a recent wave of restrictions on the export of chip design software, jet engine parts, chemicals, and nuclear materials. Many of these limitations were introduced in recent weeks amid growing U.S.–China tensions.

When asked about lifting the export bans, Trump sidestepped the question, telling reporters, "We'll see." He added, "China has been ripping off the United States for years," and reiterated, "We want to open China."

EUR/USD Technical Outlook

Buyers now need to push through the 1.1430 level to target a test of 1.1460. From there, a move toward 1.1490 becomes possible, though it would be difficult without the backing of major market players. The ultimate target stands at 1.1530. On the other hand, serious buyer activity is expected only around the 1.1400 level. If absent, it may be worth waiting for a retest of the 1.1361 low or considering long entries from the 1.1314 level.

GBP/USD Technical OutlookPound bulls must overcome immediate resistance at 1.3500 to aim for 1.3545—a level that will be tough to breach. The furthest target is 1.3580. Should the pair decline, bears will attempt to regain control at 1.3473. If successful, breaking below this range would deal a major blow to bullish positions and push GBP/USD toward the 1.3450 low, with potential further downside to 1.3415.
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