Gold (XAU/USD) continues to post solid intraday losses, retreating from the $4,600 level — a two-week high recorded on Friday. Persistent geopolitical uncertainty, combined with hawkish expectations regarding Federal Reserve monetary policy, is supporting the recovery of the U.S. dollar. This, in turn, remains a key factor weighing on the precious metal, contributing to its decline below the psychologically important $4,500 level.

Nevertheless, gold remains comfortably above the two-month low reached last Thursday, as market participants maintain a cautious stance while awaiting further developments in negotiations between the United States and Iran.

Iranian Foreign Minister Abbas Araghchi told state media on Sunday that communication and exchanges of signals with the United States are continuing, while also urging caution regarding unconfirmed reports about the progress of the negotiations. Earlier, chief negotiator Mohammad Bagher Ghalibaf emphasized that Tehran would not agree to any deal that fails to fully reflect its national interests. Additional reports indicate that the United States has adopted a tougher position in the talks, increasing uncertainty surrounding diplomatic efforts to resolve the conflict in the Middle East, which has now lasted for three months. Disagreements over Iran's nuclear program and the status of the Strait of Hormuz continue to complicate efforts to reach an agreement. Reports suggest that U.S. President Donald Trump is seeking amendments to the proposed agreement concerning the strategically important maritime corridor and uranium enrichment issues in an effort to end the hostilities. Contacts between the parties continue through Pakistani and other regional intermediaries, although the extent of progress remains unclear.

Meanwhile, Israel is expanding its ground operation in Lebanon against the Iran-backed Hezbollah group. According to Reuters, Israeli forces have captured the approximately 900-year-old Beaufort Castle and advanced beyond the Litani River. This marks the deepest advance since Israel's withdrawal from southern Lebanon in 2000 and has increased the geopolitical risk premium, supporting demand for the U.S. dollar as a safe-haven asset.

At the same time, recent developments are contributing to a recovery in oil prices after they reached a more than one-month low on Friday.

This has once again intensified inflation concerns and reinforced expectations of further Federal Reserve monetary policy tightening. As a result, the U.S. dollar is receiving additional support, while gold remains under pressure.

For better trading opportunities, market participants should pay close attention to upcoming U.S. macroeconomic releases marking the start of the new month. The week begins with the release of the ISM Manufacturing PMI, scheduled for today. However, the key event will be Friday's Nonfarm Payrolls (NFP) report, which could reshape market expectations regarding the Fed's next policy steps and strengthen short-term demand for the U.S. dollar. At the same time, developments in the Middle East will remain a source of elevated volatility in global markets and continue to influence gold price dynamics.

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According to current data, the U.S. dollar is showing its strongest gains against the New Zealand dollar.

From a technical perspective, gold continues to move lower, trading below both the 20-day and 50-day Simple Moving Averages (SMAs). Negative oscillator readings support the bearish outlook. Nevertheless, the metal showed resilience near the key 200-day SMA last week, which continues to support the longer-term upward trend. Therefore, before considering a scenario of further declines in gold prices, it would be prudent to wait for a decisive break and consolidation below this moving average, currently located at the $4,400 level.

Gold (XAU/USD) continues to post solid intraday losses, retreating from the $4,600 level.

From a technical perspective, XAU/USD maintains a short-term downward trend, trading within a descending parallel channel and below both the 20-day and 50-day Simple Moving Averages (SMAs). The moderately negative MACD histogram, combined with a Relative Strength Index (RSI) reading below 50, at around 44, suggests that the sell-off may continue amid weakening momentum.

Last week, the instrument showed resilience near the key 200-day SMA, which continues to support the longer-term upward trend. Therefore, it would be prudent to wait for a decisive break and consolidation below this moving average, currently located at $4,400, before considering a downside scenario toward the psychological level of $4,300.

On the other hand, the nearest resistance is located at the 20-day SMA near $4,580 and is further reinforced by the 50-day SMA at $4,630. A sustained break above this range will be necessary to ease the current downward pressure.

However, it is worth noting that negative oscillator readings continue to indicate that bearish traders retain the upper hand in the market.

Due to low volatility, the test of the levels I identified did not take place. As a result, I ended the day without any trades.

The upcoming U.S. ISM Manufacturing PMI figures are expected to receive special attention. If the data turns out to be favorable, it will likely strengthen demand for the U.S. dollar, putting additional pressure on the Japanese yen and pushing the USD/JPY pair toward a new weekly high. Conversely, negative readings could trigger weakness in the U.S. currency.

Recently, despite sharp price increases, U.S. manufacturers have shown stable growth dynamics, passing costs on to consumers who have so far been able to absorb them. Rising manufacturing activity typically correlates with higher employment and expanding consumer spending, creating a positive effect on business sentiment. As PMI indices reflect the condition of the manufacturing sector, they are traditionally closely watched by market participants. Given these expectations, any deviation from forecasts could lead to volatility.

As noted above, if the ISM index comes in below expectations, it may be interpreted as a sign of slowing or even stagnation in the manufacturing sector. In such a scenario, traders are likely to adjust their positions in USD/JPY, although this is unlikely to result in a strong downward correction.

Regarding the intraday strategy, I will primarily rely on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1:

Today, I plan to buy USD/JPY at an entry point around 159.51 (green line on the chart), targeting a rise toward 159.84 (thicker green line on the chart). At 159.84, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 point reversal from that level. A rise in the pair today is more likely in the case of unfavorable developments regarding agreements and strong U.S. data. Important: Before buying, ensure that the MACD indicator is above the zero line and has just begun to rise from it.

Scenario No. 2:

I will also consider buying USD/JPY if the price tests 159.42 twice in a row while the MACD is in oversold territory. This would limit downward potential and trigger a reversal to the upside. In this case, a move toward 159.51 and 159.84 can be expected.

Sell Signal

Scenario No. 1:

I plan to sell USD/JPY after a move to 159.42 (red line on the chart), which would lead to a rapid decline in the pair. The key downward target is 159.15, where I will exit short positions and immediately open long positions in the opposite direction, expecting a 20–25 point rebound. Selling pressure may return today if weak data is released. Important: Before selling, ensure that the MACD indicator is below the zero line and has just begun to decline from it.

Scenario No. 2:

I will also consider selling USD/JPY if the price tests 159.51 twice in a row while the MACD is in overbought territory. This would limit upward potential and lead to a reversal to the downside. A decline toward 159.42 and 159.15 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – expected take-profit level or manual profit-taking level, as further upside above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – expected take-profit level or manual profit-taking level, as further downside below this level is unlikely
• MACD indicator – entry decisions should be guided by overbought and oversold zones

Important Note

Beginner Forex traders should make market entry decisions with extreme caution. Before major fundamental data releases, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news events, always place stop-loss orders to minimize losses. Without stop-loss protection, you may lose your entire deposit very quickly, especially if you do not use proper money management and trade large position sizes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are, by definition, a losing strategy for intraday traders.

According to preliminary data from S&P Global, the UK manufacturing sector demonstrated resilience. The Manufacturing PMI rose to 53.9 in May, slightly above the April reading of 53.7. The index remains steadily above the 50-point threshold, which separates expansion from contraction, indicating continued growth in industrial production. This increase is a positive sign, especially at a time when other key economic indicators, such as demand, are showing signs of stagnation.

In the near term, traders are expected to focus on the release of the U.S. ISM Manufacturing PMI. If the ISM index shows positive dynamics, exceeding analyst expectations and confirming previous positive trends, it will undoubtedly support the U.S. dollar. However, in the context of global economic instability, the data is unlikely to deliver anything particularly strong or surprising.

Regarding the intraday strategy, I will primarily rely on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1:

Today, I plan to buy the pound at an entry point around 1.3475 (green line on the chart), targeting a rise toward 1.3509 (thicker green line on the chart). At 1.3509, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 point pullback from that level. A rise in the pound today is only possible in the case of weak U.S. data. Important: Before buying, ensure that the MACD indicator is above the zero line and has just begun to rise from it.

Scenario No. 2:

I will also consider buying the pound if the price tests 1.3453 twice in a row while the MACD is in oversold territory. This would limit the downward potential of the pair and trigger a reversal to the upside. In this case, a move toward 1.3475 and 1.3509 can be expected.

Sell Signal

Scenario No. 1:

I plan to sell the pound after a move to 1.3453 (red line on the chart), which would lead to a rapid decline in the pair. The key downward target is 1.3412, where I will exit short positions and immediately open long positions in the opposite direction, expecting a 20–25 point rebound. Selling pressure may return today if strong U.S. data is released. Important: Before selling, ensure that the MACD indicator is below the zero line and has just begun to decline from it.

Scenario No. 2:

I will also consider selling the pound if the price tests 1.3475 twice in a row while the MACD is in overbought territory. This would limit upward potential and lead to a reversal to the downside. A decline toward 1.3453 and 1.3412 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – expected take-profit level or manual profit-taking level, as further upside above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – expected take-profit level or manual profit-taking level, as further downside below this level is unlikely
• MACD indicator – entry decisions should be guided by overbought and oversold zones

Important Note

Beginner Forex traders should make market entry decisions with extreme caution. Before major fundamental data releases, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news events, always place stop-loss orders to minimize losses. Without stop-loss protection, you may lose your entire deposit very quickly, especially if you do not use proper money management and trade large position sizes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are, by definition, a losing strategy for intraday traders.

Both buyers and sellers remain cautious amid ongoing US-Iran negotiations. On the one hand, negotiators have not managed to reach a deal despite a stream of encouraging leaks; on the other hand, President Donald Trump continues to express optimism about the diplomatic process. Today he said that Iran really wants a deal.

The geopolitical factor remains the key driver for EUR/USD. If the situation stays suspended, the price will most likely continue to oscillate in the 1.1610–1.1680 range. A diplomatic breakthrough would sharply lift demand for risk assets and allow buyers to secure a position in the 1.17 area. If negotiations stall and the United States resumes military action, the pair would likely test support at 1.1560 (the lower Bollinger band line on the D1 timeframe).

At present, an escalation scenario appears the least likely outcome. The market consensus is that the parties will sooner or later agree on a compromise that will end the conflict and restore shipping through the Strait of Hormuz. Traders are therefore effectively discounting negative headlines and maintaining a cautiously constructive stance that provides background support to EUR/USD.

Macro releases have moved to the background — but that is only until further notice. The June Federal Reserve meeting (under Chair Kevin Warsh) takes place in two weeks, and if Washington and Tehran do finalize a memorandum of understanding that paves the way to a full settlement, market attention will quickly refocus on key macro data. Accordingly, upcoming releases should not be ignored; their influence is likely to be felt in the near term.

During the US trading session on Monday, the manufacturing ISM index for May will be released. That is the first heavyweight indicator of the week because it captures new orders, employment, and price dynamics in manufacturing. Since the start of this year, the ISM has remained in expansionary territory above the 50-point dividing line (52.6 in January, 52.4 in February, and 52.7 in March and April), hovering near the highest readings since 2024. That performance has been supported by resilient domestic demand (the new orders subindex has consistently held above 53–54), rising investment in technology and infrastructure (inflows to defense, data centers, and AI), and supply chain disruptions that have encouraged US firms to shift orders domestically.

Most analysts forecast the ISM manufacturing index to print another multi-month high for May, at around 53.3. Even a print at consensus would provide meaningful support to the dollar.

On Tuesday, the JOLTS report will be published; it is seen as a gauge of labor market heat. The consensus calls for a moderate decline in job openings to 6.79 million from 6.86 million in March. For the Fed, the key combination is "openings + hires + separations": if openings fall quickly while hires remain weak, the dollar will come under pressure as doves gain influence. If JOLTS shows a moderate decline in openings accompanied by low separations, the dollar should remain resilient despite the headline softening.

Also, on Tuesday, preliminary euro area inflation figures for May will be released. Consensus expects the headline CPI to rise to 3.4% year-on-year from 3.0% in the prior month, while core inflation is expected to stay broadly stable at about 2.3% year-on-year after dipping to 2.2% in April. A "green zone" release would increase talk of an ECB rate hike in June. At the same time, the ECB is constrained by weakening growth, so any upside surprise would most likely prompt only a short-lived euro rally before markets revert focus to US data, since the long-run monetary divergence still favors the dollar.

On Wednesday, the US ISM services index will be published. This release is critical for EUR/USD because the non-manufacturing sector accounts for over 70% of the US economy and is a direct reflection of domestic demand resilience. The services ISM has remained in expansion since June last year but has shown a downtrend over the past two months, slipping to 53.6 in April. Most forecasters expect the services ISM to tick up to 53.8 in May. Traders will focus on structural elements of the report, notably new orders and employment; their resilience would be interpreted as support for continued firm Fed rhetoric. The prices paid subindex—which surged to a four-year high of 70.7 in April—could trigger elevated volatility if it shows further acceleration.

Also, on Wednesday, the ADP report will be released. It is an important lead indicator ahead of Friday's nonfarm payrolls, even though correlation is imperfect. Consensus expects private payrolls to rise by about 116,000, a pace consistent with the Fed's narrative of a "stable but not overheated" labor market. The ADP print will only dent the dollar materially if it misses well below 100,000.

Finally, on Friday, the US nonfarm payrolls (NFP) for May will be published — arguably the most important release of the week for EUR/USD traders. The consensus forecast calls for an increase of only 95,000 jobs in nonfarm payrolls with the unemployment rate unchanged at 4.3 percent. Such a low headline would be a trigger for higher volatility in EUR/USD. If NFP prints at or below expectations, confirming US labor market softness, the dollar would be under significant pressure and the pair would gain. Conversely, any material upside surprise (120,000 and above) would strongly support the dollar because market expectations are subdued.

From a technical perspective, on the D1 timeframe, EUR/USD trades inside the Ichimoku Kumo cloud, between the middle and lower Bollinger band lines and between Tenkan-sen and Kijun-sen. All that points to persistent uncertainty. The pair will likely continue to probe the boundaries of the working range 1.1610–1.1680 (the lower and upper Bollinger lines on the H4 chart) until clarity emerges on the US-Iran talks. In the meantime, traders will probably play the macro releases listed above within the stated price corridor.

Due to low volatility, the test of the levels I outlined did not take place. As a result, I ended the day without any trades.

The Eurozone Manufacturing PMI declined to 51.3 from 52.3 in April, indicating continued expansion but with weakening momentum. This slowdown, while not critical, has now persisted for the second consecutive month, signaling some cooling in the industrial sector, which is causing caution among market participants. According to experts, the main reasons for this decline include continued inflationary pressure, slowing global demand, and ongoing geopolitical tensions. Companies are facing rising costs for raw materials and energy, forcing them either to pass these costs on to consumers or reduce production volumes in order to maintain margins.

Next, we will see similar data from the U.S. ISM Manufacturing PMI. Strong figures would restore demand for the U.S. dollar, while weak data could trigger renewed downward pressure on the currency. An increase in manufacturing activity typically correlates with higher employment and rising consumer spending, which in turn supports overall business confidence. Given the recent mixed performance of these indicators, strong dollar appreciation following the release is unlikely.

Regarding the intraday strategy, I will primarily rely on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1:

Today, euro purchases may be considered at a price around 1.1662 (green line on the chart), targeting a rise toward 1.1705. At 1.1705, I plan to exit the market and also consider short positions in the opposite direction, expecting a pullback of 30–35 points from the entry point. A rise in the euro today is only possible in the case of strong positive news. Important: Before buying, ensure that the MACD indicator is above the zero line and has just started to rise from it.

Scenario No. 2:

I will also consider buying the euro if the price tests 1.1643 twice in a row while the MACD is in oversold territory. This would limit the downward potential of the pair and lead to a reversal to the upside. In this case, a rise toward 1.1662 and 1.1705 can be expected.

Sell Signal

Scenario No. 1:

I plan to sell the euro after a move to 1.1643 (red line on the chart). The target is 1.1589, where I will exit the market and immediately consider buying in the opposite direction, expecting a 20–25 point rebound. Selling pressure may return today if strong U.S. data is released. Important: Before selling, ensure that the MACD indicator is below the zero line and has just started to decline from it.

Scenario No. 2:

I will also consider selling the euro if the price tests 1.1662 twice in a row while the MACD is in overbought territory. This would limit the upward potential and lead to a reversal downward. A decline toward 1.1643 and 1.1608 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – expected take-profit level or manual profit-taking level, as further upside above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – expected take-profit level or manual profit-taking level, as further downside below this level is unlikely
• MACD indicator – trading decisions should consider overbought and oversold conditions

Important Note

Beginner Forex traders should approach market entry decisions with extreme caution. Before major fundamental data releases, it is best to stay out of the market to avoid sharp volatility. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss protection, you may quickly lose your entire deposit, especially if risk management is not applied and large position sizes are used.

Remember that successful trading requires a clear trading plan, similar to the one outlined above. Spontaneous trading decisions based on current market conditions are, by definition, a losing strategy for intraday traders.

Since the March meeting, risks related both to inflationary pressure and to economic slowdown have increased. This creates a "difficult policy trade-off," although committee members cautiously note that "there is still no evidence of strong second-round effects" from inflation.

Last week, members of the ECB Executive Board, Isabel Schnabel and Philip Lane, made statements pointing to a potential rate hike at the upcoming June 11 meeting, regardless of developments in the Middle East. Members of the Governing Council from Finland and Greece also supported a rate increase to strengthen confidence in the ECB. These statements reflect growing concern over persistent inflation dynamics, particularly given the risk that an energy shock could spill over into broader price pressures and inflation expectations.

Despite increasing risks, markets have not yet shown a clear reaction. The euro even strengthened last week amid expectations of a potential peace settlement. ECB rate expectations through the end of the year imply a total tightening of 59 basis points, meaning euro yield differentials are unlikely to converge toward U.S. dollar levels. As a result, there is currently no strong long-term support factor for the euro.

Further developments will largely depend on events in the Persian Gulf. The announcement of a 60-day ceasefire carries a dual message. On one hand, it signals easing tensions. On the other hand, it indicates that the crisis is becoming prolonged. In such a scenario, both inflationary pressures and strain on global industry will intensify with each passing day.

Speculative positioning in the euro has become somewhat more bearish, with a weekly change of -1.04 billion. The estimated price remains below the long-term average, although momentum is weakening.

Last week, we observed the potential for a short-term rise in the euro toward resistance at 1.1700 amid rumors of easing tensions, but in the longer term, there are still no solid grounds for euro appreciation.

The only scenario in which the euro could strengthen against the dollar would be if inflation forces the ECB to adopt a more aggressive policy while the European economy is not harmed by either higher rates or an energy shortage. Given current realities, the simultaneous fulfillment of these two conditions appears unlikely. Therefore, a downward reversal in EUR/USD is expected after the current correction is completed. Resistance is located at 1.1700, with target levels at 1.1575 and subsequently 1.1410.

As the data showed, the Eurozone Manufacturing PMI declined to 51.3 from 52.3 in April, while in the United Kingdom the indicator rose to 53.9. Both readings remain above the 50-point threshold, which is traditionally interpreted as a sign of expansion in the sector.

Next, close attention will be paid to the release of the U.S. ISM Manufacturing PMI. These data play a key role in shaping economic trends, as the condition of the U.S. industrial sector directly affects demand and inflation. If the ISM index shows positive dynamics, exceeds analyst forecasts, and maintains the positive trend of previous periods, it will undoubtedly have a supportive effect on the U.S. dollar. In the context of global economic uncertainty, such figures may attract additional capital into U.S. assets.

In the case of strong data, I will rely on the Momentum strategy. If there is no market reaction to the data, I will continue using the Mean Reversion strategy.

Momentum Strategy (Breakout) for the Second Half of the Day

EUR/USD

• Buy on a breakout above 1.1660, targeting 1.1680 and 1.1699
• Sell on a breakout below 1.1645, targeting 1.1625 and 1.1585

GBP/USD

• Buy on a breakout above 1.3480, targeting 1.3510 and 1.3535
• Sell on a breakout below 1.3445, targeting 1.3410 and 1.3370

USD/JPY

• Buy on a breakout above 159.60, targeting 159.85 and 160.02
• Sell on a breakout below 159.40, targeting 159.15 and 158.80

Mean Reversion Strategy (Reversion) for the Second Half of the Day

EUR/USD

• Sell after a failed breakout above 1.1669, on a return below this level
• Buy after a failed breakdown below 1.1637, on a return above this level

GBP/USD

• Sell after a failed breakout above 1.3477, on a return below this level
• Buy after a failed breakdown below 1.3440, on a return above this level

AUD/USD

• Sell after a failed breakout above 0.7197, on a return below this level
• Buy after a failed breakdown below 0.7175, on a return above this level

USD/CAD

• Sell after a failed breakout above 1.3829, on a return below this level
• Buy after a failed breakdown below 1.3800, on a return above this level

Let us examine this important issue more closely. The confrontation between the United States and Iran, particularly regarding access to the Strait of Hormuz and the uninterrupted passage of oil tankers in both directions, remains the dominant market theme. This factor has significantly distorted market behavior, with the Middle East conflict continuing to overshadow other important issues, including the possibility of interest rate increases in the United States and other economies amid the risk of accelerating inflation and its potential negative consequences for both national and global economic growth.

This week, employment-related data will be released, including the ADP report on private-sector job creation on Wednesday and the official US Department of Labor employment report on Friday. Current forecasts suggest that private-sector employment may increase in May, while the official report is expected to show a decline in overall job growth.

Given the substantial influence of the Middle East crisis, can employment data still trigger a meaningful appreciation or depreciation of the US dollar?

Observing market behavior since March, during which traders have repeatedly ignored most fundamental data releases—except, perhaps, inflation figures—it is difficult to expect a significant change in market sentiment. The Middle East conflict remains characterized by a high degree of uncertainty and fragile conditions. As a result, most financial markets, with the notable exception of the US equity market, continue to exhibit largely sideways price action.

What, then, can be expected from today's trading session?

The market reaction to either stronger- or weaker-than-expected US employment data is likely to remain limited. This could further reinforce the current lack of directional momentum across markets. As for US equities, the exceptionally strong investor interest in the artificial intelligence sector may begin to fade by autumn, potentially exposing valuations that have expanded significantly in recent years.

Forecast of the Day:

GOLD

Gold is trading above the support level of 4,490.00. Reduced geopolitical tensions related to the Middle East conflict could contribute to a continuation of the decline toward 4,400.00. Under this scenario, short positions may be considered from the 4,483.20 level.

#USDX

The US Dollar Index remains within the 98.00–99.40 range amid ongoing uncertainty surrounding developments in the Middle East crisis. A downside breakout from this range could lead to a decline toward 98.50. Short positions may be considered from the 98.87 level.

S&P 500 vs global MSCI dynamics

Over the past two months, the S&P 500 has jumped by 16%, its strongest two-month run since 2020. Since 1950, there have been only four episodes of such a rapid rally. Each time the broad index continued to trend higher, with an average gain to year-end of about 17%.

At the same time, the S&P 500 is on its longest winning streak since 1985. That performance is driven by massive demand for chipmakers and impressive corporate results. FactSet data shows that aggregate earnings rose by 28.6% year-on-year in Q1. If the reporting season ends on that note, it will be the strongest quarter since 2021.

S&P 500 winning-streak dynamics

In such an exuberantly bullish environment, banks and asset managers are reluctant to call a bubble or issue gloomy forecasts. On the contrary, Goldman Sachs has raised its year-end S&P 500 target from 7,600 to 8,000.

The rally has also been fuelled by dovish rhetoric from some FOMC members. Fed Governor Michelle Bowman said an end to the Middle East conflict would ease inflation and that the impact of the confrontation on US growth would be limited. Those comments align with the White House view that geopolitics will cause only a temporary inflation spike, followed by lower prices that could push the Fed toward monetary easing.

That said, the risk of renewed escalation has not disappeared. While the US and Iran exchange edits to the draft agreement text, Tehran is shooting down US drones and being struck on its territory — clear ceasefire breaches that both sides are publicly downplaying.

My view is that the S&P 500 can still rise further if the Middle East conflict is resolved. Reduced geopolitical risk would slow inflation and open the door for the Fed to embark on a loosening cycle.

Technically, the daily S&P 500 chart shows a doji bar forming at the top of the uptrend. A drop below its low at 7,560 would increase the risk of a reversal pattern. Nonetheless, pullbacks should still be used to add long positions, with the previously stated target of 7,700.

The EUR/USD pair is struggling to build on the recent recovery from the 1.1585 support level seen over the two trading sessions ahead of the weekend. The pair is fluctuating between modest losses and slight gains. Current spot prices are trading around the 14-day EMA and remain relatively stable following the release of German retail sales data, which exceeded market expectations.

Official data published by Destatis showed that German retail sales, a key indicator of consumer spending, declined by 0.3% in April. However, the decrease was slightly better than the expected 0.4% decline and matched the revised March reading of -0.3%.The EUR/USD pair is receiving some support from positive macroeconomic developments, despite the broader strength of the U.S. dollar, which is limiting significant upside gains. The U.S. Dollar Index (DXY), which measures the dollar against a basket of major currencies, is recovering from the two-week low reached on Friday amid ongoing geopolitical uncertainty and expectations that the Federal Reserve will maintain a hawkish monetary policy stance.

Significant disagreements between Washington and Tehran regarding Iran's nuclear program and the situation in the Strait of Hormuz continue to complicate diplomatic efforts aimed at reaching an agreement necessary to end the months-long conflict in the Middle East.Iran's chief negotiator, Mohammad Bagher Ghalibaf, stated that the country would not agree to any deal until its national rights are fully protected. In addition, reports suggest that the United States is hardening its position in negotiations with Iran. The situation is further complicated by Israel's military operations in Lebanon, which continue to fuel geopolitical risks and increase demand for the U.S. dollar as a safe-haven asset, creating obstacles to further gains in EUR/USD.

Meanwhile, recent developments have contributed to a moderate recovery in oil prices, which reached a new monthly low on Friday. This has reignited inflation concerns and reinforced expectations that the Federal Reserve may raise interest rates in 2026, providing additional support to the U.S. dollar. Nevertheless, expectations that the European Central Bank could raise rates as early as this month are helping to limit downside pressure on EUR/USD.

For better trading opportunities today, market participants should wait for the release of the U.S. ISM Manufacturing PMI at the beginning of the North American session. Additional key U.S. macroeconomic releases are scheduled later this week, including the closely watched Nonfarm Payrolls (NFP) report on Friday. Together with further developments related to the conflict in the Middle East, these events are likely to increase volatility in the EUR/USD pair.

From a technical perspective, bulls need to break above and consolidate above all key moving averages to regain control of the market, with the last major resistance represented by the psychological 1.1700 level. However, this remains challenging as momentum oscillators continue to generate negative signals. At the same time, the Relative Strength Index (RSI) remains in neutral territory, indicating a balance of power between bulls and bears.

It is also worth noting that the 100-day and 200-day Simple Moving Averages (SMAs) remain flat, confirming the ongoing sideways trading range.

The table below shows the percentage change in the U.S. dollar against major currencies today. In particular, the U.S. dollar has strengthened against the New Zealand dollar.

The wave structure on the hourly chart currently remains straightforward. The latest completed downward wave did not break below the previous low, while the new upward wave surpassed the previous high. Thus, the trend has shifted to bullish. Bulls will only be able to continue their advance if Iran and the United States sign an interim agreement, stop violating the ceasefire terms, and the Strait of Hormuz is reopened in the near future.

The news background on Friday was not entirely absent, but the market once again made it clear that it is not interested in routine economic statistics. The most important release, Germany's inflation report, surprised markets with a reading of 2.6% year-on-year versus the expected 2.9%. Thus, despite the sharp increase in energy prices caused by the conflict in the Middle East, inflation in Germany is slowing, as is the case in the United Kingdom.

Of course, one month does not establish a trend. Price pressures may persist through the end of the year, and the reopening of the Strait of Hormuz and the end of the conflict will not return prices to January levels within a matter of weeks. Nevertheless, the decline in German inflation is undoubtedly a negative factor for the euro, as the European Central Bank may begin to question the necessity of tightening monetary policy at its June meeting.

The upcoming Eurozone inflation report, due later this week, should provide greater clarity. If inflation continues to accelerate across Europe, the ECB may proceed with a rate hike in June. Such an outcome would support both the euro and bullish market sentiment.

On the 4-hour chart, the pair continues to trade between the 23.6% Fibonacci retracement level at 1.1569 and the 38.2% retracement level at 1.1667. The market is not rushing to open new positions or draw conclusions. At present, I recommend focusing primarily on the hourly chart, as price movements have remained relatively weak in recent weeks. No emerging divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders closed 10,196 long positions and 6,109 short positions. Over seven weeks in February and March, the bulls' overwhelming advantage disappeared due to the war in Iran, while over the past nine weeks the situation has stabilized amid the suspension of hostilities in the Middle East. The total number of long positions held by speculators currently stands at 223,000, compared with 193,000 short positions. The gap is once again widening in favor of the euro.

Overall, from a long-term perspective, major market participants continue to view the euro favorably. Naturally, various global events—which have been in no short supply in recent years—continue to influence investor sentiment. In particular, market attention remains focused on the Middle East, where the conflict has merely been paused rather than resolved. Therefore, in the near term, the euro and the dollar are likely to be driven not by Federal Reserve or ECB monetary policy, nor by economic data, but by developments in Iran.

News Calendar for the United States and the Eurozone:

• Germany – Retail Sales (06:00 UTC).
• Eurozone – Unemployment Rate (09:00 UTC).
• United States – ISM Manufacturing PMI (14:00 UTC).

The economic calendar for June 1 contains three events, with the ISM index standing out as the most important. The economic backdrop may influence market sentiment during the second half of Monday's trading session.

EUR/USD Forecast and Trading Tips:

Short positions could be initiated following a rebound from the 1.1682 level on the hourly chart, with targets at 1.1630 and 1.1578. These positions may remain open today. Long positions could be considered following a close above and subsequent rebound from the 1.1630 level, with targets at 1.1682 and 1.1745. The first target has already been reached. New long positions may be considered either on a rebound from the 1.1630 level or after a close above 1.1682.

Fibonacci retracement levels are drawn from 1.1409 to 1.1850 on the hourly chart and from 1.2081 to 1.1411 on the 4-hour chart.

That framing moves the debate from whether to regulate to a question of geopolitical competition: as Congress hesitates, other jurisdictions—from the European Union with its MiCA framework to Georgia, which is launching a sovereign stablecoin in partnership with Tether—are writing their own rules and attracting capital that might otherwise flow to the United States.

Pressure on Congress is mounting from multiple directions. Last week, Treasury Secretary Scott Bessent repeatedly and publicly urged prompt passage of the bill, directly appealing to both chambers to finalize CLARITY. Securities and Exchange Commission chair Paul Atkins has been optimistic as well and believes the law will be adopted in the foreseeable future. President Trump has pledged to create a regulatory architecture resilient to future shocks and to opposition from crypto critics. There is a clear consensus within the executive branch: key officials are pulling in the same direction.

A gap, however, still yawns between political will and legislative reality. Congress's schedule is congested: budget negotiations, FISA reform, and a housing bill all compete with the CLARITY Act for scarce time during the eight working weeks remaining before the August recess.

It is evident that the market now awaits fresh signals, and every week of delay translates into continued outflows from Bitcoin ETFs, sustained institutional caution, and lost capital migrating to jurisdictions where the rules are already written.

Trading recommendations:

Buyers of BTC are currently targeting a return to $74,700, a level that would open a direct path to $76,500 and then toward $78,300; a breach above $78,300 would indicate attempts to restore a bull market. On the downside, buyers are expected at $72,900; a drop below that area could quickly push Bitcoin toward $71,400, with a more distant target near $69,800.

As for Ethereum, a clear hold above $2,026 would open a direct route to $2,084. The farther target is the high near $2,128. A break above that level would signal strengthening bullish sentiment and renewed buyer interest. On the downside, buyers are expected at $1,969; a fall below that point could rapidly send Ethereum toward $1,911, with a deeper target at $1,845.

What we see on the chart:

- Red lines indicate support and resistance levels where either a price slowdown or active growth is expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

A crossover, or a price test of moving averages, typically either halts the move or sparks fresh market momentum.

Her thesis on the nature of the current shock is materially important. Schnabel argued that the present crisis differs fundamentally from earlier energy shocks — it is increasingly manifesting as a global demand shock while simultaneously raising production costs across the world. The resulting pressure on producer prices will spread through global supply chains and push inflation on to goods after a prolonged period of containment. "This will exert inflationary pressure basically all over the world," she added. In other words, even if the conflict ended today, damage to energy infrastructure and supply chains has already altered price dynamics on a longer-term basis—and a monetary response will be required in any case.

Her remarks confirm her earlier statement last week that a rate increase at the ECB meeting on 10–11 June is necessary. It is worth noting that similar signals have come from other Governing Council members in recent weeks, albeit with varying degrees of firmness. Deutsche Bundesbank president Joachim Nagel warned last week that the euro area economy is moving toward an adverse rather than a baseline scenario and explicitly supported a June hike. Governing Council member Pierre Wunsch described market expectations of three 25-basis-point increases this year as "reasonable." Christodoulos Patsalides said that "everything points to a rate rise" in June. Pierre Wunsch also emphasized that the conflict had reintroduced inflation at the starting line for the ECB's task.

Only a minority have urged caution. Bank of Greece governor Yannis Stournaras warned against unduly tight policy in the face of weak growth. Francois Villeroy de Galhau urged prudence, noting that second-round effects have not yet materialized—a position Schnabel explicitly rejected, pointing to early evidence of such effects.

On the path beyond June, Schnabel deliberately left the door open: "It's too early to say that it's a certain number of hikes and then it's done" Markets have largely priced a 25-basis-point move for June, and Schnabel's comments have only reinforced those expectations. For the euro that is broadly supportive, but the scope for further appreciation is constrained by a weakening euro area economy and uncertainty surrounding the Strait of Hormuz.

A technical outlook for EUR/USD suggests that buyers should consider securing 1.1670; that would allow a test of 1.1700. From there the pair could advance to 1.1730, although progress beyond that level without support from large participants would be difficult. The farther target is the high of 1.1751. On the downside, only significant buying interest around 1.1630 is likely to trigger major interventions by large players. If that support is absent, it would be prudent to wait for a new low at 1.1610 or to consider long entries from 1.1585.

As for GBP/USD, sterling buyers should first clear resistance at 1.3480 to target 1.3510; advancing above that level may prove difficult, with a further target at 1.3548. If the pair falls, bears will seek control at 1.3450. A decisive break below 1.3450 would likely deal a serious blow to bullish positions and could push GBP/USD toward 1.3410, with downside potential to 1.3370.

The wave structure remains bearish, as bulls still lack sufficient positive geopolitical developments to launch a sustained advance. The latest completed downward wave broke below the previous low, while the latest upward wave failed to surpass the previous high. Geopolitical developments have recently provided support to bulls; however, the prospects of reaching an agreement between Iran and the United States are once again fading rapidly. The bearish trend can only be considered complete after a breakout above the May 25 high.

The news background was effectively absent on Friday, and remarks by Bank of England Governor Andrew Bailey provided traders with little new information. The market continues to speculate on whether the British regulator may decide to tighten monetary policy in June. The latest inflation report from the United Kingdom does not provide grounds for expecting an interest rate increase. Nevertheless, the pound has been gaining strength over the past several days, which can only be attributed to geopolitical factors.

Geopolitics continues to account for roughly 90% of trader sentiment, but it is not always possible to draw clear conclusions about its future direction. Gains in the pound or the euro imply that the likelihood of an agreement between Iran and the United States is increasing. However, I still do not see any tangible signs that such an event will materialize in the near future. Therefore, the current rise in GBP/USD may prove short-lived.

Today, the U.S. ISM Manufacturing PMI will be released, and it is a sufficiently important and noteworthy report. However, I would not be surprised if the market ignores it as well. Over the weekend, Donald Trump once again sought to reassure markets by stating that an agreement with Iran was close, but he made the same statement the previous weekend.

On the 4-hour chart, GBP/USD has returned to the resistance level of 1.3482–1.3514. Another rebound from this zone would once again favor the U.S. dollar and a moderate decline toward the 23.6% Fibonacci retracement level at 1.3327. However, price movements in the near term will depend on geopolitics rather than chart analysis. Technical analysis should be used only as a supplementary tool. No emerging divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

Sentiment among the Non-commercial category of traders became slightly less bearish during the latest reporting week. The number of long positions held by speculators decreased by 10,097, while the number of short positions declined by 13,006. The gap between long and short positions now stands at approximately 58,000 versus 119,000. Bears have dominated the market in recent months, which comes as no surprise given the geopolitical situation in the Middle East and the political crisis in the United Kingdom. The bears' advantage currently exceeds a two-to-one ratio.

I still do not believe in a sustained bearish trend for the pound. However, in the near term, market direction will depend not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, the market has adjusted to the expectation of a prolonged conflict, but recent developments suggest that a ceasefire may still be achieved, although the process is unlikely to be quick or straightforward.

News Calendar for the United States and the United Kingdom:

• United States – ISM Manufacturing PMI (14:00 UTC).

The economic calendar for June 1 contains only one event that can be considered important. The economic backdrop may influence market sentiment during the second half of Monday's trading session.

GBP/USD Forecast and Trading Tips:

Short positions may be considered today if the pair rebounds from the 1.3454–1.3466 level on the hourly chart, with targets at 1.3408 and 1.3349–1.3355. Long positions were possible after a close above 1.3408, targeting 1.3454–1.3466. This target has been reached. New long positions may be considered after a close above 1.3454–1.3466, with a target at 1.3526–1.3539.

Fibonacci retracement levels are drawn from 1.3158 to 1.3655 on the hourly chart and from 1.3866 to 1.3158 on the 4-hour chart.

Last week ended for spot Bitcoin ETFs with another net outflow — this marks the tenth consecutive day without a single positive result. The number itself is telling: such a streak indicates that institutional investors are consistently reducing their positions in the main crypto asset, regardless of short-term price movements. Against this backdrop, data from CryptoQuant indicate a concerning forecast. Based on the PnL Index Signal, the Bitcoin bear market could last until early 2027. According to the indicator, a large wave of profit-taking began back in October 2025, and historically, such cycles take around 18 months. If history repeats itself, the bottom may not be just around the corner but significantly further away than most market participants anticipate.

The key concept in this forecast is "true capitulation." This marks the end of a bear cycle: the moment when the last holders capitulate and sell their assets at a loss, completely cleansing the market of weak hands. According to CryptoQuant's assessment, such capitulation has not yet been observed. A significant portion of short- and medium-term holders has not yet experienced significant downturns in their profit and loss metrics — they are either slightly in profit or at breakeven, and, psychologically, they are not yet ready to realize losses. As long as this group does not capitulate, the market will remain under constant pressure from potential sellers who seize the opportunity to exit at every bounce — precisely what we have seen in ETF flows over the past few weeks.

As for the intraday strategy in the cryptocurrency market, the strategies and conditions are outlined below.

Bitcoin

Buying Scenarios

Scenario #1: I plan to buy Bitcoin today upon reaching the entry point around $73,300, targeting a move to $74,000. Around $74,000, I will exit my buy trades and sell immediately on the bounce. Before buying on the breakout, ensure that the 50-day moving average is below the current price and that the Awesome indicator is in the zone above zero.

Scenario #2: I can buy Bitcoin from the lower boundary at $72,800 if there is no market reaction to its breakout back to the levels of $73,300 and $74,000.

Selling Scenarios

Scenario #1: I plan to sell Bitcoin today upon reaching the entry point around $72,800, targeting a decline to $72,200. Around $72,200, I will exit my sell trades and buy immediately on the bounce. Before selling on a breakout, ensure the 50-day moving average is above the current price and the Awesome indicator is in the zone below zero.

Scenario #2: I can sell Bitcoin from the upper boundary at $73,300 if there is no market reaction to its breakout back to the levels of $72,800 and $72,200.

Ethereum

Buying Scenarios

Scenario #1: I plan to buy Ethereum today upon reaching the entry point around $1992, targeting a move to $2016. Around $2016, I will exit my buy trades and sell immediately on the bounce. Before buying on the breakout, ensure that the 50-day moving average is below the current price and that the Awesome indicator is in the zone above zero.

Scenario #2: I can buy Ethereum from the lower boundary at $1973 if there is no market reaction to its breakout back to the levels of $1992 and $2016.

Selling Scenarios

Scenario #1: I plan to sell Ethereum today upon reaching the entry point around $1973, targeting a decline to $1954. Around $1954, I will exit my sell trades and buy immediately on the bounce. Before selling on a breakout, ensure the 50-day moving average is above the current price and the Awesome indicator is in the zone below zero.

Scenario #2: I can sell Ethereum from the upper boundary at $1992 if there is no market reaction to its breakout back to the levels of $1973 and $1954.

The price test at 159.23 coincided with the MACD indicator moving downward from the zero mark, confirming the correct entry point for selling dollars. As a result, the pair decreased by 10 pips.

Last Friday, the yen failed to capitalize on expectations of a potential peace agreement between the US and Iran. Despite a breakthrough in negotiations reported at the end of last week, the Japanese currency did not demonstrate the expected strengthening, remaining under pressure against the dollar. The main reason for this behavior was the lack of a final decision and, most importantly, Donald Trump's signature on the agreed peace deal. This indicates that the experience of previous political steps by the American president creates an atmosphere of extreme caution, and investors are hesitant to make long-term bets until they receive undeniable confirmation.

Thus, the yen remains in uncertainty. Its fate depends directly on further developments, specifically whether the reached agreement will be approved at the highest level and what concrete steps will follow. Meanwhile, the market is in a wait-and-see mode, and the Japanese currency continues to fluctuate around 160, reflecting this duality.

Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.

Buying Scenarios:

Scenario #1: I plan to buy USD/JPY today upon reaching the entry point at 159.51 (green line on the chart), targeting a move to 159.84 (thicker green line on the chart). Around 159.84, I intend to exit my long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). It is best to resume buying the pair on corrections and on serious dips in USD/JPY. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price 159.42 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to an upward market reversal. We can expect a rise to the opposite levels, 159.51 and 159.84.

Selling Scenarios:

Scenario #1: I plan to sell USD/JPY today only after updating the level at 159.42 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the 159.15 level, where I intend to exit my shorts and immediately open longs in the opposite direction (expecting a 20-25-pip move in the opposite direction from the level). Sellers will return at any moment; they just need a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its descent from it.

Scenario #2: I also plan to sell USD/JPY today if the price tests 159.51 twice in a row while the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decline to opposite levels 159.42 and 159.15.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

The price test at 1.3424 coincided with the MACD indicator moving above the zero mark, confirming the correct entry point for buying pounds. As a result, the pair rose by 40 pips.

Last Friday, the US currency weakened significantly against the pound after news emerged of an agreement between US and Iranian representatives on the preliminary terms for a peaceful resolution. However, despite the initial positive signals, markets preferred a cautious wait-and-see approach. The main reason for this cautious attitude was the lack of official approval and, more importantly, the personal endorsement from Donald Trump.

Today promises to be eventful for the UK economy, and the PMI index for the manufacturing sector is set to be a key indicator. Recently, we have observed a steady improvement in manufacturing metrics, which supports optimistic sentiment in the market. It is expected that the May data will confirm this trend, demonstrating further growth in business activity and, consequently, strengthening the position of the British pound.

Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.

Buying Scenarios:

Scenario #1: I plan to buy pounds today upon reaching the entry point around 1.3475 (green line on the chart), targeting a move to 1.3509 (thicker green line on the chart). Around 1.3509, I intend to exit my long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). A strong rise in the pound can only be expected after a breakthrough in the peace agreement. Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy pounds today in the event of two consecutive tests of the price 1.3453 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to an upward market reversal. We can expect a rise to the opposite levels 1.3475 and 1.3509.

Selling Scenarios:

Scenario #1: I plan to sell pounds today after updating the level at 1.3453 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the level 1.3412, where I intend to exit my shorts and immediately open longs in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pound will return in case of weak data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just beginning its descent from it.

Scenario #2: I also plan to sell pounds today if the price 1.3475 is tested twice consecutively while the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decline to opposite levels of 1.3453 and 1.3412.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

The price test at 1.1657 coincided with the MACD indicator moving above the zero mark, confirming the correct entry point for buying euros. As a result, the pair rose by 20 pips.

The euro rose sharply, while the dollar lost ground after news emerged that US and Iranian negotiators had agreed to a peace deal. This news undoubtedly could have triggered significant fluctuations in the currency market. The agreement on a peace deal between the two countries, especially after a prolonged period of tension, is perceived as a positive signal for the global economy. It may reduce geopolitical risks, which, in turn, positively affects appetite for risk. In such a situation, traders may prefer riskier assets, selling dollars and buying euros.

Today, in the first half of the day, the pair will likely respond to data on the Eurozone unemployment rate and the manufacturing PMI. These macroeconomic indicators are key barometers of the European economy, and their publication could trigger significant fluctuations in the currency market. Investors and traders will closely examine the numbers to evaluate the current economic situation and forecast the European Central Bank's next steps. The unemployment rate in the Eurozone is a crucial social and economic indicator. A decrease in the unemployment rate is traditionally viewed as a sign of an improving economy, rising consumer demand, and consequently, increased inflationary pressure.

The PMI index for the manufacturing sector, in turn, reflects the activity levels in the manufacturing sector, which is one of the pillars of the European economy. Values above 50 indicate an expansion in manufacturing activity, while values below 50 signal a contraction. High PMI readings indicate increased production volumes, new orders, and employment, which are positive signs for the economy. Conversely, low readings may indicate problems and risks.

Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.

Buying Scenarios:

Scenario #1: Today, I plan to buy euros when the price reaches around 1.1670 (green line on the chart), targeting a move to 1.1605. At point 1.1605, I plan to exit the market and sell euros back, expecting a move of 30-35 pips from the entry point. A rise in the euro value can only be anticipated after good data from the Eurozone. Importantly! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy euros today if the price tests 1.1647 twice in a row while the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to an upward market reversal. We can expect a rise to the opposite levels 1.1670 and 1.1705.

Selling Scenarios:

Scenario #1: I plan to sell euros once the level 1.1647 (red line on the chart) is reached. The target will be the level 1.1608, where I plan to exit the market and immediately buy back in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair today will only return in the case of weak data. Importantly! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its descent from it.

Scenario #2: I also plan to sell euros today if the price tests 1.1670 twice in a row while the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decrease to the opposite levels of 1.1647 and 1.1608.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

Against this backdrop, Asian equity markets opened the week at record levels. The MSCI Emerging Markets index climbed by 2% to a fresh high, and South Korea's KOSPI also hit a record, led by Samsung Electronics, SK Hynix, and LG Electronics. The rally is still powered by the AI narrative: news of an expanded partnership between Workday and Google Cloud to integrate agent-based AI systems added optimism across regional tech stocks.

Notably, the equity rally has continued despite persistent uncertainty around a US-Iran deal. Over the weekend, Washington and Tehran exchanged edits to a draft memorandum to extend the ceasefire and reopen the Strait of Hormuz, but it remains unclear whether real progress has been achieved. Brent has recovered, the dollar has strengthened, and Asia's FX markets have reacted very differently from equities. Most Asian currencies fell, with the South Korean won weakening most sharply as foreign investors sold local stocks at record levels to lock in dollar-denominated profits.

Meanwhile, Moody's analysts warn of a fresh risk: the rally's concentration in a single segment — memory-chip makers and AI infrastructure — creates vulnerability to any unexpected slowdown in AI demand. That has not materialized so far, and the boom continues despite geopolitical risks. However, the higher valuations climb, the more painful a correction would be if the Iran story turns negative. Markets in Singapore, Indonesia, Malaysia, and Thailand are closed today for holidays, reducing liquidity and potentially amplifying price swings.

Technically, the S&P 500 analysis suggests that the immediate task for buyers is to overcome the resistance level of $7,607. Doing so would confirm further upside momentum and open the path to $7,639. Maintaining control above $7,659 would further cement buyers' positions. On the downside, buyers need to defend the $7,574 area. A break below that level would likely push the index back to $7,547 and open the way to $7,518.

The dollar quickly lost its advantage last Friday after information emerged that key negotiators from the US and Iran managed to reach a consensus and agree on preliminary terms for a peace deal. This news prompted an immediate reaction and outflow of capital from safe-haven assets, traditionally including the US currency.

However, despite the initial signs of promising developments, the market took a cautious position today. The main reason for this caution is the lack of official confirmation and, more importantly, the personal signature of Donald Trump on the agreements reached. Recent months show that statements and preliminary agreements, without final approval, can easily be revised or scrapped altogether. This creates significant uncertainty and does not allow traders to fully assess the long-term implications of a potential agreement.

Today's trading on the currency market promises to be eventful, especially in the first half of the day when the EUR/USD pair will be influenced by several important macroeconomic indicators. The main events that traders will monitor include the publication of unemployment data in the Eurozone and the updates to the PMI indices for the region's manufacturing sector. A negative scenario concerning the revision of these indicators downward could place significant pressure on the euro. If the actual figures are lower than expected, it would signal a slowdown in economic activity in the Eurozone. Such dynamics typically provoke a decline in the euro's exchange rate against other major world currencies, including the US dollar.

As for the pound, today's trading also promises to be quite dynamic. Traders will pay particular attention to the expected publication of the PMI index for the UK's manufacturing sector. According to preliminary forecasts, this key macroeconomic indicator is expected to show positive dynamics, opening significant prospects for further growth of the British pound. Positive data on the PMI index is traditionally perceived as a signal of strengthening in the manufacturing sector, which, in turn, is one of the pillars of the national economy. Improvement in manufacturing metrics indicates increased order volumes, higher production, and consequently, potential revival of consumer demand and creation of new jobs. This overall scenario is beneficial for the national currency, as it reflects the health and stability of the country's economy.

If the data aligns with economists' expectations, it is advisable to act based on the Mean Reversion strategy. If the data is significantly above or below the expectations, it is best to use the Momentum strategy.

Momentum Strategy (Breakout):

For the EUR/USD Pair

Buy on a breakout of 1.1665, which could lead to a rise in the euro to around 1.1678 and 1.1698;

Sell on a breakout of 1.1640, which could lead to a fall in the euro to around 1.1610 and 1.1579;

For the GBP/USD Pair

Buy on a breakout of 1.3480, which could lead to a rise in the pound to around 1.3510 and 1.3545;

Sell on a breakout of 1.3455, which could lead to a fall in the pound to around 1.3411 and 1.3370;

For the USD/JPY Pair

Buy on a breakout of 159.60, which could lead to a rise in the dollar to around 159.85 and 160.02;

Sell on a breakout of 159.40, which could lead to a drop in the dollar to around 159.15 and 158.80;

Mean Reversion Strategy (Pullback):

For the EUR/USD Pair

Look for sell opportunities after a failed breakout above 1.1661 on a pullback below this level;

Look for buy opportunities after a failed breakout above 1.1635 on a pullback to this level;

For the GBP/USD Pair

Look for sell opportunities after a failed breakout above 1.3477 on a pullback below this level;

Look for buy opportunities after a failed breakout above 1.3440 on a pullback to this level;

For the AUD/USD Pair

Look for sell opportunities after a failed breakout above 0.7197 on a pullback below this level;

Look for buy opportunities after a failed breakout above 0.7175 on a pullback to this level;

For the USD/CAD Pair

Look for sell opportunities after a failed breakout above 1.3819 on a pullback below this level;

Look for buy opportunities after a failed breakout above 1.3795 on a pullback to this level;

The GBP/USD currency pair also traded in mixed directions over the past week but continues its recovery overall. The market frequently changes direction, mostly due to geopolitical events. Recall that just on the weekend before last, Donald Trump announced the proximity of a deal with Iran, and... this weekend he once again stated that a deal with Iran is close. Meanwhile, officials in Tehran continue to report that they will not abandon enriched uranium, stating that Trump's rhetoric does not match reality, and at the moment, there are no agreements between Iran and the US. Tehran continues to demand the unblocking of its ports, the unfrozen assets in foreign banks, reparations, the lifting of sanctions, and much more. Therefore, at this point, we believe there is still a long way to go before a deal is reached. Even an interim one.

However, it must be acknowledged that this is just our assumption. In reality, things may be quite different. Since the market is in the same state of uncertainty, its expectations may differ from ours. Therefore, if the British pound and euro strengthen in sync, it means expectations of an agreement being signed are rising. Conversely, if they weaken, expectations are falling. Unfortunately, predicting geopolitical news and the market's reaction to it is nearly impossible. We must simply react as situations unfold.

This week, several important macroeconomic reports will be released in the US, while the UK event calendar is almost empty. We would like to consider all the most critical reports from across the ocean, but there is little sense in doing so – the market has already ignored macroeconomics and fundamentals for the past three months. Thus, we will focus on the most essential reports – Non-Farm Payrolls and the unemployment rate, which will be published on Friday.

According to forecasts, the unemployment rate will remain unchanged at 4.3%, and the number of new jobs created in May may amount to 96-100,000. We again emphasize that 100,000 new jobs is a relatively low figure, although much better than the weighted average for 2025. The market will react to the actual value relative to the forecast, so, in theory, even 120,000 Non-Farms could trigger a rise in the US dollar.

We say "theoretically" because there is no guarantee that the market will react to this report at all. Additionally, it should be noted that only inflation reports currently influence the Federal Reserve's monetary policy. As inflation rises, the monetary views of the Committee members may become more hawkish. Despite the possibility that raising the key rate could further slow down the economy and cool the labor market. Therefore, the reports on unemployment and Non-Farms are undoubtedly important, but they will not have a long-term effect on the dollar. And they will only be released on Friday, while throughout the week, the market will be forced to respond only to geopolitics.

The average volatility of the GBP/USD pair over the last 5 trading days is 67 pips. For the pound/dollar pair, this value is considered "average." On Monday, June 1, we expect movement within a range between 1.3386 and 1.3520. The upper channel of the linear regression is directed upward, indicating a recovery of the upward trend. The CCI indicator has not formed any signals recently.

Closest support levels:

S1 – 1.3428

S2 – 1.3367

S3 – 1.3303

Closest resistance levels:

R1 – 1.3489

R2 – 1.3550

R3 – 1.3611

Trading Recommendations:

The GBP/USD currency pair continues to recover after a 300-point drop. Trump's policies will continue to pressure the US economy, so we do not anticipate long-term growth for the American currency. However, 2026 is currently shaping up to be super positive for the dollar. Thus, long positions with targets at 1.3550 and 1.3611 can be considered if the price is above the moving average. When the price is below the moving average line, short positions can be traded with targets at 1.3367 and 1.3306 based on geopolitical grounds. The market situation frequently changes, and it continues to predominantly track geopolitical news, which does not exhibit a uniform character.

Explanations for the Illustrations:

Linear regression channels help determine the current trend. If both are pointing in the same direction, the trend is strong;

The moving average line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should currently be conducted;

Murray levels are target levels for movements and corrections;

Volatility levels (red lines) indicate the likely price channel in which the pair will stay over the next day, based on current volatility metrics;

The CCI indicator – its entry into oversold territory (below -250) or overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.

The EUR/USD currency pair traded with low volatility and a slight upward tilt over the past week. Overall, the market has made it clear that it is simply tired of responding to the constantly contradictory messages regarding the war in the Middle East. Donald Trump might announce one day that the parties are close to concluding a deal, only to issue new threats against Iran an hour later. Most of Trump's peace-loving and optimistic statements are contradicted by Tehran just a few hours later. Therefore, traders are left to guess at the current stage of negotiations between Iran and the United States.

Although the level of uncertainty is high, some things are known for certain. Iran remains unwilling to abandon its nuclear weapons and developments, which renders any negotiations fundamentally pointless. The United States will not abandon its goal of disarming Iran, while Iran will not give up its nuclear weapons. The purpose of these negotiations remains unclear. However, experts note that the parties may at least agree to a complete ceasefire and the reopening of the Strait of Hormuz, after which they could negotiate the "nuclear question" for up to 10 years. By the way, that's how long the negotiations for the previous nuclear deal lasted, from which Trump carelessly withdrew in order to later initiate a war against Iran.

Thus, this week the market will once again have to closely monitor geopolitics, separating the wheat from the chaff and sifting through tons of information, 90% of which is absolute trash. The macroeconomic and fundamental background continues to have practically no influence on market sentiment; however, we will still look at events that could hypothetically affect the euro's exchange rate.

In essence, there is one such event – the inflation report for the Eurozone for May. Contrary to German inflation data, the consumer price index in the Eurozone may accelerate to 3.3-3.4%. Recall that inflation in Germany slowed to 2.6% in May. If forecasts of European inflation are confirmed, the likelihood of the European Central Bank tightening monetary policy in June will increase significantly, and the ECB may raise rates on its own. Theoretically, this situation should support the euro, but we repeat: the market largely ignores fundamental factors, and the movement of the EUR/USD pair depends on geopolitics by 80-90%.

For the strong growth of the euro currency, there is a lack of real signs of the conflict in the Middle East coming to an end, signing an agreement between Iran and the USA, opening the Strait of Hormuz, or at least news that genuinely indicates progress in negotiations. For the strong growth of the American currency, there is no geopolitical foundation: negotiations are ongoing despite regular violations of ceasefire conditions, and war is not resuming. Thus, during the current week, the EUR/USD pair may continue to move very sluggishly, unless truly significant news emerges from the Middle East.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of June 1 is 50 pips and is characterized as "medium-low." We expect the pair to trade between 1.1610 and 1.1710 on Monday. The upper channel of the linear regression has turned upward, indicating a trend change to an upward direction. In fact, the upward trend of 2025 could have resumed back in March. The CCI indicator has entered overbought territory and formed two "bearish" divergences, signaling the start of a downward correction that is still ongoing.

Closest support levels:

S1 – 1.1658

S2 – 1.1597

S3 – 1.1536

Closest resistance levels:

R1 – 1.1719

R2 – 1.1780

R3 – 1.1841

Trading Recommendations:

The EUR/USD pair continues its downward movement, which is presumably a correction within the framework of a global upward trend. The global fundamental backdrop for the dollar remains extremely negative, and only geopolitics regularly supports it. When the price is below the moving average, short positions can be considered with targets at 1.1597 and 1.1536. Above the moving average line, long positions become relevant with targets at 1.1780 and 1.1841. The market continues to distance itself from geopolitical factors, but the dollar has been in demand in recent weeks as hopes for peace in the Middle East have weakened.

Explanations for the Illustrations:

Linear regression channels help determine the current trend. If both are pointing in the same direction, the trend is strong;

The moving average line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should currently be conducted;

Murray levels are target levels for movements and corrections;

Volatility levels (red lines) indicate the likely price channel in which the pair will stay over the next day, based on current volatility metrics;

The CCI indicator – its entry into oversold territory (below -250) or overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.

The GBP/USD currency pair continued its upward movement on Friday, which may be related to rising optimism about the conflict in the Middle East. Donald Trump reiterated several times last week that the parties are close to an agreement, but at the same time, Iran and the United States violated the ceasefire multiple times. Trump threatened Oman with military action if it concludes an agreement on the control of the Strait of Hormuz, and Iran indicated once again that it has no agreements with Washington and that the nuclear issue is not even on the negotiation agenda. Thus, there is much information, it is contradictory, and each trader decides for themselves what to believe. Last week, the British pound rose; this week, it could just as easily fall. The macroeconomic and fundamental background continues to be ignored, with few exceptions.

From a technical perspective, the upward trend on the hourly timeframe has completed, so this week we may see the pair decline. The price has breached the trend line. Without geopolitical support, it will be challenging for the British currency to demonstrate growth in the near term, and the market continues to largely ignore macroeconomic and fundamental factors. In the near future, the dynamics of the British pound will depend not on technical analysis but on geopolitics. Technical analysis merely reflects the ongoing, constantly changing market sentiment.

On the 5-minute timeframe, three trading signals were generated on Friday. First, the pair broke through the Kijun-sen line and moved down about 15-20 pips. Thus, the trade closed at a Stop Loss at break-even. Next, the price breached the critical line in the opposite direction and hit the nearest target – the 1.3465-1.3480 area – in about 15 minutes. The distance from the entry point to the target area did not exceed 20 pips, so we wouldn't recommend opening such positions. The last third signal was generated too late...

COT Report

COT reports for the British pound show that commercial traders' sentiment has been changing steadily in recent years. The red and blue lines, representing the net positions of commercial and non-commercial traders, frequently cross each other and are often close to the zero mark. Currently, the lines are diverging, with non-commercial traders dominating and holding... short positions. Given the events in the Middle East, it is not surprising that demand for risk currencies is falling, while demand for the dollar is increasing.

In the long term, the dollar continues to decline due to Trump's policies, which are clearly visible on the weekly timeframe (illustration above). The trade war will continue in one form or another for a long time, and Trump's policy is aimed directly and indirectly at weakening the American currency. However, geopolitical factors are currently at the forefront and have recently provided strong support for the dollar.

Since the conflict in the Middle East cannot be considered resolved, the US dollar may still show growth in the future. According to the latest COT report (dated May 26), the "Non-commercial" group closed 10,100 BUY contracts and 13,000 SELL contracts. Thus, the net position of non-commercial traders grew by 3,100 contracts over the week.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair ended its upward trend due to another escalation around the Strait of Hormuz. The macroeconomic and fundamental background still has little impact on the pair's movements. We do not believe that without a real escalation of the conflict in the Middle East, the dollar can show strong growth. The American currency can only hope for a failure in negotiations between Iran and the US.

For June 1, we highlight the following important levels: 1.3096-1.3115, 1.3179-1.3187, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681, 1.3751-1.3763. The Senkou Span B line (1.3477) and Kijun-sen line (1.3437) may also be sources of signals. It is recommended to set a Stop Loss to break-even when the price moves in the correct direction by 20 pips. The lines of the Ichimoku indicator may shift during the day, which should be taken into account when determining trading signals.

On Monday, one important report is scheduled for both the UK and the US – the ISM manufacturing index. We remind you that ISM indices are released in a single estimate and are more important than the S&P.

Trading Recommendations:

Today, traders can open short positions with a target of 1.3369-1.3377 if the pair bounces off the 1.3465-1.3480 area. Long positions will become relevant after breaching the 1.3465-1.3480 area with a target of 1.3588.

Explanations for the Illustrations:

Price levels of support and resistance – thick red lines, around which movement may end. They are not sources of trading signals.

Kijun-sen and Senkou Span B lines – lines of the Ichimoku indicator, transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels – thin red lines, from which the price previously bounced. They are sources of trading signals.

Yellow lines – trend lines, trending channels, and any other technical patterns.

Indicator 1 on COT charts – the size of the net position of each category of traders.

The EUR/USD currency pair rose a bit on Friday, but nothing fundamentally changed for it. The euro remains below the Senkou Span B line, and there is still no trendline in place. Thus, the downward trend continues, despite a two-week flat and an increase in quotes on Friday. On this day, two reports, more or less important, were published in Germany, showing quite notable values. The unemployment rate decreased from 6.4% to 6.3%, while inflation fell from 2.9% to 2.6%. In both cases, traders did not expect such results. However, the market reacted weakly to these figures. Traders once again ignored macroeconomic data, which no longer surprises anyone.

From a technical standpoint, the pair remains in a downward trend. If the Senkou Span B line is breached next week, then one might start talking about an upward trend. However, we must remember that geopolitics still rules the currency market. For the euro to grow, new, optimistic, and encouraging news regarding the conflict in the Middle East and the Strait of Hormuz blockade is required. However, we have not received such news over the past week. Of course, the market can continue to believe in a ceasefire, a deal, and the unblock of the strait, but it is impossible to predict what the market will believe next week.

On the 5-minute timeframe, four trading signals were generated on Friday. During the European trading session, the pair bounced off the 1.1657-1.1666 area, then off the 1.1615-1.1625 area. During the American session, it overcame the 1.1657-1.1666 area and bounced off the Senkou Span B line. Traders could not act on the last two signals since the distance between the entry point and the target was minimal. The first two signals brought a decent profit.

COT Report

The latest COT report is dated May 26. The illustration of the weekly timeframe clearly shows that the net position of non-commercial traders remains "bullish," but is rapidly declining due to geopolitical events. Traders have been getting rid of the euro in favor of the US dollar in recent months. Donald Trump's policy has not changed, but the dollar has served as a "reserve currency" for some time. However, this process may already be over.

We still do not see any fundamental factors that would strengthen the euro, but there are enough factors for the dollar to decline. The war in the Middle East made the dollar super attractive for a time, but once this factor reaches its "expiration date," everything will revert to the way it was. And it may have already expired. In the long term, the euro could fall to the level of $1.06 (trend line), but the upward trend will still remain relevant. At the moment, the pair has not strayed too far from the downward trend line, which has been breached several times.

The positioning of the red and blue lines of the indicator indicates parity between bulls and bears. During the last reporting week, the number of longs in the "Non-commercial" group decreased by 10,200, while the number of shorts decreased by 6,100. Accordingly, the net position fell by 4,100 contracts over the week.

Analysis of EUR/USD 1H

On the hourly timeframe, the EUR/USD pair continues to form a downward trend and remains generally flat. The situation in the Middle East remains tense; it is not getting worse, and Washington and Tehran may only dream of signing a preliminary agreement for now. If there are no new signs of escalation in the Middle East and the memorandum is indeed signed, the dollar will begin to lose ground. But for now, we do not observe either the first or the second.

For June 1, the following levels are highlighted for trading: 1.1362, 1.1426, 1.1542, 1.1615-1.1625, 1.1657-1.1666, 1.1750-1.1760, 1.1786, 1.1830-1.1837, 1.1907-1.1922, as well as the Senkou Span B line (1.1683) and Kijun-sen line (1.1636). The lines of the Ichimoku indicator may shift during the day, which should be taken into account when determining trading signals. Do not forget to set a Stop Loss order to break even if the price moves in the correct direction by 15 pips. This will protect against potential losses if the signal turns out to be false.

On Monday, final estimates of business activity indices for the manufacturing sectors in Germany and the European Union, as well as retail sales in Germany, will be published. We consider all these reports to be secondary. A more or less important report is the ISM index in the US.

Trading Recommendations:

Today, traders can open short positions with targets at 1.1615-1.1625 and 1.1585 if the price consolidates below the 1.1657-1.1666 area. Long positions can be opened if the Senkou Span B line is breached, targeting the 1.1750-1.1760 area.

Explanations for the Illustrations:

Price levels of support and resistance – thick red lines, around which movement may end. They are not sources of trading signals.

Kijun-sen and Senkou Span B lines – lines of the Ichimoku indicator, transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels – thin red lines, from which the price previously bounced. They are sources of trading signals.

Yellow lines – trend lines, trending channels, and any other technical patterns.

Indicator 1 on COT charts – the size of the net position of each category of traders.