Market analysis

Date: Monday 1st of June 2026

EUR/USD : Stagflation fears mount as Iran conflict remains unsolved.

GBP/USD : British Pound defends 200-day SMA, but for how long?

USD/JPY : Yen back in danger zone as Tokyo officials keep investors on edge .

Dow Jones : Wall Street posts nine-week win streak, ends solid May at record levels

Gold : XAU/USD looks vulnerable whilst below $4,580-$4,630 supply zone .

Crude Oil : P rices set for weekly decline, WTI is on track for worst week in over a month .

EUR/USD

Stagflation fears mount as Iran conflict remains unsolved

The EUR/USD pair finished the last week of May at around 1.1660, barely up compared to the previous week’s close. The US Dollar (USD) shed some ground on the back of hope , but losses were limited by persistent speculation that the Federal Reserve (Fed) will have no choice but to hike interest rates before year's end. The song remains the same financial market activity revolved once again around war-related headlines. The Middle East crisis led the way, with sentiment staying positive at the beginning of the week but deteriorating later amid headlines of back-and-forth attacks between the United States (US) and Iran. By Thursday, however, news that they had reached an agreement on a Memorandum of Understanding to extend the ceasefire for 60 days, open the Strait of Hormuz, and start nuclear talks revived the positive mood and maintained the USD under selling pressure. There is, however, a caveat: US President Donald Trump has yet to approve it, while Iran’s authorities claim the memorandum is not yet finalized. Even further, Iran's top negotiator Mohammad Baqer Qalibaf said on Friday that they have no trust in guarantees or words, and added: "Only actions are the measures, no action will be taken before the other side acts." Also on Friday, President Trump said that the naval blockade will be lifted and ships caught in the Strait of Hormuz may start the process of "heading home. “Nevertheless , cautious optimism prevails. Gearing up for central banks The US Fed and the European Central Bank (ECB) will announce their monetary policy decisions in roughly two weeks, and market players are already gearing up for it. Recent data show the hike path is more likely day by day, as inflation keeps running above the central bank’s goals. In the US, inflation rose at an annualized pace of 3.8% in April, up from 3.5% in March, according to the Personal Consumption Expenditures (PCE) Price Index. The core PCE Price Index rose 3.3% as anticipated. The Fed’s favorite inflation gauge is at its highest in roughly two years and has been above the central bank’s goals since March 2021 . Continued and rising inflationary pressure, alongside the lack of material progress on the war front - the latest major source of inflation - pushes speculative interest into betting on interest rate hikes. Across the pond, things are slightly better, but still worrisome: Germany published the preliminary estimate of the May Consumer Price Index (CPI), which rose 2.6%, easing from the 2.9% posted in April. The Harmonized Index of Consumer Prices, the ECB’s preferred inflation reading, declined 0.1% monthly and rose 2.7% on a yearly basis. Market players are already pricing in a rate hike when European policymakers meet in June. Stagflation fears rise, employment taking center stage Other than that, the US downwardly revised the Q1 Gross Domestic Product (GDP) estimate to 1.6% from the first calculation of 2 %. While far from confirmed, the stagflation ghost hovers over all major economies as inflation keeps rising while growth becomes tepid. The first week of June will revolve around the second leg of the Fed’s mandate: employment. The US will release the April Job Openings report, the monthly ADP survey on Employment Change, Challenger Job Cuts, and weekly unemployment claims ahead of the May Nonfarm Payrolls (NFP) report scheduled for Friday. Growth -related data will also make it to the wires, as ISM will release the Services and the Manufacturing Purchasing Managers’ Indexes (PMIs) for May. Germany and the Eurozone will publish Retail Sales updates, while the Euro bloc will unveil the preliminary estimate of the HICP also for May, expected to hit 3.3% YoY, after posting 3% in April. Such an outcome or a higher one will result in market participants fully pricing in an interest rate hike by the ECB in June. Finally, the Eurozone will publish a second estimate of the Q1 GDP, expected to be confirmed at 0.1% QoQ.

The macroeconomic calendar will also include some Fed and ECB speakers , and the last round of testimonies ahead of the central bank’s announcements later in the month.

Source : https://www.fxstreet.com/analysis/eur-usd-weekly-forecast-stagflation-fears-mount-as-iran-conflict-remains-unsolved-202605291521

EUR/USD

GBP/USD

British Pound defends 200-day SMA, but for how long?

The British Pound (GBP) reversed course and posted a weekly loss against the US Dollar (USD), with 1.3500 remaining a tough nut to crack for buyers. British Pound caved into shifting Mideast headline . GBP/USD danced to the whims and fancies of fluid market conditions, thanks to the fast-shifting headlines around a potential peace deal between the United States (US) and Iran. Investors yo-yoed between risk-on and risk-off sentiments as US-Iran geopolitical developments dictated markets and high-beta currencies such as the British Pound, while keeping a floor under the safe-haven USD. The week began on an optimistic note, digesting the weekend’s news that several American media outlets reported that the two countries were close to signing a deal that involves a 60-day ceasefire extension and an in- principal agreement to the reopening of the Strait of Hormuz. Although US President Donald Trump was quick to clarify that the deal “isn’t even fully negotiated yet, as sticking points remain over Iran’s nuclear program and the Strait. With further progress on the talks, the USD was sold as inflation concerns eased alongside the retracement in Oil prices, thereby alleviating the pressure on the US Federal Reserve (Fed) to opt for an interest rate hike this year. In response, GBP/USD extended its rebound to briefly regain the 1.3500 barrier, with thin liquidity adding to the exaggerated move higher. Heading into mid-week, the US-Iran ceasefire appeared on tenterhooks amid persistent deadlock and fading hopes of a peace deal being reached anytime soon, especially after fresh attacks by the US on Iran. That increased hostilities in the Gulf as Iran also retaliated and warned of “decisive response”, left markets running for cover in the Greenback. Late Monday, the US Central Command (CENTCOM) carried out fresh self-defense strikes on southern Iran, targeting missile sites and boats allegedly attempting to place naval mines. In response, Iran’s Foreign Ministry said Iran “will not leave any act of mischief unanswered and will not hesitate in defending the country’s integrity” in a statement on Tuesday, accusing the US of violating the ceasefire. Early Thursday, US CENTCOM confirmed that they carried out new strikes on Iran, targeting a military site in Bandar Abbas, a strategic port city.US President Donald Trump said he won’t rush into a deal with Iran, while reiterating that the Strait of Hormuz will be “open to everybody” and that the US will “watch over it “Additionally , the US Treasury Department said it has sanctioned the Persian Gulf Strait Authority, the body Iran has set up to manage the Strait of Hormuz. Against this backdrop, the currency pair accelerated its pullback from the weekly high near 1.3510 and hit eight-day lows of 1.3367 amid intense risk aversion. However , buyers quickly jumped back in and staged a solid comeback in GBP/USD after the USD got dumped heavily following an Axios report, citing that both sides have reached a tentative 60-day memorandum of understanding (MOU) to extend the ceasefire and begin formal nuclear negotiations. The report further stated that the agreement still required final approval from President Donald Trump, who reportedly asked for several days to review the proposal. British Pound recovery stalled as buyers took a breather heading into the weekend, assessing the US-Iran ceasefire report.

Source : https://www.fxstreet.com/analysis/gbp-usd-weekly-forecast-british-pound-defends-200-day-sma-but-for-how-long-202605291430

GBP/USD

USD/JPY

Yen back in danger zone as Tokyo officials keep investors on edge

As Japan’s yen drifts back to levels that prompted official intervention a month ago, markets are sizing up Tokyo’s remaining financial firepower and political will to defend its ailing currency. Japan spent about $63 billion in what were suspected to be multiple bouts of yen-buying intervention at the end of April and early May, a small fraction of its $1 trillion war chest. But traders think that spending all of that, or even much of it, is unrealistic. And as speculative bets against the yen creep up again, authorities will be looking to keep markets on edge. “The more foreign reserves shrink, the more vulnerable Japan looks to speculators," said Daisaku Ueno, chief foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities. With yen-selling pressure showing no sign of easing, "the war of nerves between the authorities and the market looks set to continue. “Yen -buying intervention requires selling foreign assets, of which Japan held about $1 trillion at the end of April. After subtracting the roughly 10 trillion yen ($62.78 billion) deployed in the April and May actions, based on calculations of Bank of Japan money market data, that leaves about 150 trillion yen, or enough for "around 30 rounds" of intervention, according to Goldman Sachs economist Yuriko Tanaka. CRUCIAL ’ Understanding But exhausting all of Japan’s foreign assets wouldn’t be feasible, particularly as it would negatively impact the value of U.S. Treasuries at a time when cooperation from the United States is critical. The U.S. Treasury conducted so-called "rate checks" that helped nudge the dollar-yen rate down in January. "U.S. understanding is crucial" to sustaining the impact of any intervention, said Takeshi Ueno, a senior economist at NLI Research Institute. If Washington were to push back on such activity, it "could invite speculative yen selling. "FREE-FLOAT RULES Another potential check on intervention is an International Monetary Fund standard whereby a country that steps into markets too often can risk losing its "free-floating" exchange rate status. But chief currency diplomat Atsushi Mimura has said the IMF rules served as no constraint on how many times the government can intervene. " The thinking is that curbing excessive volatility takes priority," said Akira Moroga, the chief market strategist at Aozora Bank. Even if Japan were to lose its free-floating currency classification, "I don’t think they care at all," he added. T he yen slid to 159.65 on Thursday, the weakest since April 30 when Japan is suspected to have made its first intervention in almost two years. The Ministry of Finance is scheduled to announce at 1000 GMT on Friday the total amount spent on foreign exchange intervention since April 28. J apanese Finance Minister Satsuki Katayama on Friday again declined to comment on whether her agency had intervened, repeating that officials were ready to take "decisive action. "CAUTIOUS BOJ The yen has been battered by the three-month-long Middle East crisis, with soaring energy prices delivering a term of trade shock to Japan, which imports almost all its oil. That exacerbated an already weakening trend amid the BOJ’s cautious approach to raising interest rates and expectations of expanded fiscal stimulus under Prime Minister Sanae Takaichi. Whereas previous Japanese administrations have focused on the speed of change in deciding whether to intervene, the current government appears more centered on defending the 160 per dollar line. Rather than fearing intervention, some market participants are now positioning for it. A dealer at a domestic bank said buy orders for dollars are clustering in the 155-157 yen per dollar zone, reflecting real dollar demand among importers as well as speculative positions. On the top side, market expectation is that the next intervention will come before the 162 level. "The government will want to defend that level at all costs," said a dealer at a domestic bank.

Source: https://www.investing.com/news/economy-news/yen-back-in-danger-zone-as-tokyo-officials-keep-investors-on-edge-4715918

USD/JPY

Dow Jones

Wall Street posts nine-week win streak, ends solid May at record levels

Wall Street ended at a record high on Friday, buoyed by reports that the U.S. and Iran had reached a deal to extend their ceasefire and remove restrictions on vessels crossing the Strait of Hormuz. President Donald Trump said he would be meeting with his officials to make a final determination on the deal. U.S. stocks also notched a nine-week win streak, their longest since December 2023, and a solid advance for the month of May. Equities have surged back to record levels on the back of hopes for an end to the Middle East conflict, a strong quarterly earnings season, and a furious rally in the artificial intelligence trade. The benchmark S&P 500 index advanced 0.2% to finish at 7,581.65 points, while the tech-heavy NASDAQ Composite added 0.2% to settle at 26,972.62 points, earlier topping the 27,000 points level for the first time ever. The blue-chip Dow Jones Industrial Average climbed 0.7% to conclude at 51,032.65 points, consolidating above the 51,000 marks for the first time ever. All three averages posted record closes. For the week, the S&P was up 1.4%, the Nasdaq 2.4%, and the Dow 0.9%. "Stocks rally when there are hopeful reports about a peace process, or at least hopes of reopening the Strait of Hormuz, but don’t really pull back when those fail to materialize. There are numerous examples; I’ve lost count of how many hopeful rallies have occurred over the past two months despite essentially no progress in the peace process," Steve Sosnick, chief strategist at Interactive Brokers, told Investing.com. Confirmation of U.S.-Iran deal awaited Market participants were keenly watching for any announcements on a confirmed peace deal between Washington and Tehran, after Trump said he would be attending a meeting in the Situation Room to make a "final determination" in Iran. The president was referring to the White House’s dedicated crisis management center. Trump said a deal would include Tehran agreeing that "they will never have a Nuclear Weapon or Bomb," an immediate reopening of the critical Strait of Hormuz with no tolls, and the removal of all mines in the waterway, after which the U.S. naval blockade of Iran’s ports and coastlines would be lifted. “Ships caught in the Strait due to our amazing and unprecedented Naval Blockade, which will now be lifted, may start the process of ’heading home!’" the president posted on Truth Social. He added that the U.S. would help Iran in digging up its enriched uranium, or what he called "nuclear dust," and destroy it. "No money will be exchanged, until further notice. Other items, of far less importance, have been agreed to. I will be meeting now, in the Situation Room, to make a final determination," Trump said. However , Iran’s Fars News Agency said Trump’s comments were a "mixture of truth and lies," citing informed sources. Fars said there was no such clause that Iran had to reopen the strait without charging tolls. The agency also added that there was no mention of Iran giving up its nuclear materials in the deal. Iran’s state media said no negotiations had taken place yet at this stage regarding Tehran’s nuclear program, citing foreign ministry spokesperson Esmaeil Baqaei. The New York Times reported that Trump’s meeting in the Situation Room ran for two hours and ended with no decision, citing a senior administration official. Against this backdrop, oil prices slipped, with Brent crude futures expiring in August, the global oil benchmark, last down 1% to $91.79 a barrel, and U.S. West Texas Intermediate crude futures expiring in July down 1.1% to $87.95 a barrel. The continued closure of the Strait of Hormuz since the start of the conflict at the end of February has led to the biggest oil supply disruption in history. Oil prices have surged to well above pre-war levels of about $70 a barrel, leading to an inflationary shock across the world and driving traders to raise their expectations of interest rate hikes by major central banks, including the Federal Reserve. The Fed’s preferred inflation gauge on Thursday hit its highest level since November 2023 on a Y/Y basis in April but grew at a slower-than-expected rate on a M/M basis. The data showed that U.S. consumer spending power was being dented as households rein in expenditures to offset rising gasoline prices. Hopes for a U.S.-Iran peace deal, along with the safe passage of scores of ships through the strait under Iranian navy supervision, have weighed on oil prices this month, with Brent prices on track for a loss of more than 19% for May. Wall Street’s remarkable recovery since March The decline in oil prices has played a big part in helping U.S. stocks on their way to gains in May. The bounce back in equities has been massive, with the benchmark S&P 500 having surged by about 16% since the end of March. “We’re finishing out an excellent May after an even more impressive April. This would make the third very solid May in a row, and the 12th up May in the past 13 years. There are not as many examples of strong May performances coming on the back of big April gains, and those have tended to come as the result of major monetary and/or fiscal stimulus – very much unlike this time," Interactive Brokers’ Sosnick told Investing.com. The S&P is now on the verge of powering past the 7,600 points level for the first time ever, having hit a session high of 7,599.38 points on Friday. The gauge ended May with a gain of 5.2%. The Nasdaq was up 8.4% for May, while the Dow 2.8%. "From a technical perspective, the S&P 500 regained momentum quickly after gapping above its 200-day moving average in April and has since moved decisively to new record highs above the 7,000-point milestone. Momentum indicators continue to confirm the bullish trend, although several measures are now approaching short-term overbought territory following the magnitude and speed of the advance," Adam Turnquist, chief technical strategist at LPL Financial, said. Another major driving factor in the U.S. market rally has been sustained gains in technology stocks, as AI demand and spending reaches a fever pitch. “The enthusiasm for stocks is warranted given the unprecedented spending spree on AI infrastructure combined with stable employment and relatively resilient consumer spending. Companies have been able to use inflation and tariffs as an excuse to improve efficiency and raise prices," Emily Bowersock Hill, CEO at Bowersock Capital Partners, said. "As the AI story continues to unfold, the space is bifurcating, with investors assigning winners and losers. Stocks like Snowflake and Micron are skyrocketing after positive earnings, as investors hunt for the next Nvidia," she said. "The AI story is helping to offset the negatives from the Iran war, the consequent oil price spike, and continued uncertainty over a resolution to the conflict. With each foray followed by a retreat, markets have become increasingly numb to Trump’s bellicose and grandiose statements. The markets hope that as the midterms approach, the chances for a lasting cease fire increase, whether U.S. goals have been achieved," Hill said. "Investors expect the AI infrastructure boom to continue to mask the negative impact of geopolitical disruption. Stock markets care about company profits, if earnings grow, stock prices can continue to rise," she added.

Source : https://www.investing.com/news/stock-market-news/wall-futures-steady-after-record-closing-highs-on-usiran-peace-deal-reports-4715818

Dow Jones

Gold

XAU/USD looks vulnerable whilst below $4,580-$4,630 supply zone.

Gold is holding the previous pullback from two-week highs of $4,595 early Monday, as buyers struggle to find a fresh impetus amid looming uncertainty surrounding the ceasefire extension deal between the United States (US) and Iran. Gold awaits clarity on the US-Iran deal in the NFP week Following last week’s reports that both sides were closing in on a 60-day truce, skepticism prevails in Asia this Monday as the new week kicks off. However, a lack of clarity remains on the ceasefire, with markets still awaiting US President Donald Trump to review the proposal and respond to Iran. Axios reported early Monday that Trump wanted to reinforce multiple points of the deal that he felt were important, such as what to do with Iran’s nuclear material, adding that Trump was informed it could take three days for Iran to respond. Meanwhile, Iranian Foreign Minister Abbas Araghchi confirmed on Sunday that talks and message exchanges with the US were ongoing. Iran's parliamentary National Security Committee spokesman Ebrahim Rezaei said that the country has made no nuclear commitments to Washington. These remarks clearly highlight that sticking points continue to remain between the US and Iran, keeping the ceasefire extension in limbo while reviving the US Dollar (USD) safe-haven appeal. This, in turn, checks the gold price upside. At the same time, Oil prices are staging an impressive bounce, with WTI recovering from six-week troughs. The ongoing strikes between Israel and Lebanon fuel the latest rebound in the black gold. Renewed Oil price uptick reignites inflation concerns and bolsters hawkish expectations around the US Federal Reserve’s (Fed) interest rate outlook. Increased hawkish Fed bets further support the USD, leaving gold buyers struggling, despite last week’s late rebound. In the week ahead, risks appear to the downside for the bright metal unless there is a decisive breakthrough in the US-Iran peace deal. Additionally, the critical US Nonfarm Payrolls (NFP) data due on Friday could also help alter Fed rate expectations and determine the gold price direction in the coming weeks.

The immediate focus now remains on the US ISM Manufacturing PMI data due later in the day for fresh trading incentives, while US-Iran headlines will continue to drive market sentiment and gold volatility.

Source: https://www.fxstreet.com/analysis/gold-price-forecast-xau-usd-looks-vulnerable-whilst-below-4-5820-4-630-supply-zone-202606010259

GOLD

Crude Oil

Prices set for weekly decline, WTI is on track for worst week in over a month,

Oil prices slipped on Friday, as market participants kept a keen eye out for any confirmation or announcement of a U.S.-Iran peace agreement, after President Donald Trump said he would be meeting with his officials to make a final decision on the deal. Crude was also set for steep monthly losses, its first since the start of the Middle East conflict at the end of February, driven by hopes for an end to hostilities and the safe passage of scores of vessels through the critical Strait of Hormuz under Iranian navy supervision. Traders await confirmation of U.S.-Iran deal . Trump on Friday said he would be attending a meeting in the Situation Room to make a "final determination" in Iran. The president was referring to the White House’s dedicated crisis management center. Trump said a deal would include Tehran agreeing that "they will never have a Nuclear Weapon or Bomb," an immediate reopening of the critical Strait of Hormuz with no tolls, and the removal of all mines in the waterway, after which the U.S. naval blockade of Iran’s ports and coastlines would be lifted. "Ships caught in the Strait due to our amazing and unprecedented Naval Blockade, which will now be lifted, may start the process of ’heading home!’" the president posted on Truth Social. He added that the U.S. would help Iran in digging up its enriched uranium, or what he called "nuclear dust," and destroy it. "No money will be exchanged, until further notice. Other items, of far less importance, have been agreed to. I will be meeting now, in the Situation Room, to make a final determination," Trump said. However, Iran’s Fars News Agency said Trump’s comments were a "mixture of truth and lies," citing informed sources. Fars said there was no such clause that Iran had to reopen the strait without charging tolls. The agency also added that there was no mention of Iran giving up its nuclear materials in the deal. Iran’s state media said no negotiations had taken place yet at this stage regarding Tehran’s nuclear program, citing foreign ministry spokesperson Esmaeil Baqaei. The New York Times reported that Trump’s meeting in the Situation Room ran for two hours and ended with no decision, citing a senior administration official. Brent heads for worst month in over six years . An agreement would represent the biggest breakthrough in a conflict that has dragged on since the end of February when the U.S. and Israel launched a joint assault on Iran. All sides have been locked in a protracted ceasefire since the beginning of April as negotiations have continued. Meanwhile, the continued shuttering of the Strait of Hormuz has led to biggest oil supply disruption in history, surging oil prices, and increased expectations of central bank interest rate hikes to combat the ensuing inflationary shock. U.S. economic data on Thursday showed that the Federal Reserve’s preferred inflation gauge -- the core personal consumption expenditures (PCE) price index -- ticked up at its fastest Y/Y pace in April since November 2023 and remained well above the central bank’s 2% target. The data showed consumer spending was taking a hit due to high gasoline pump prices boosted by the Iran war. U.S. gas prices have surged more than 50% since the start of the conflict. JPMorgan’s Michael Feroli and Abiel Reinhart looked into how energy prices can pass through into core PCE inflation. "We find that the pass-through into core PCE inflation from energy prices is small, as expected. Time series regressions imply that a 50% increase in oil prices would raise core PCE prices by about 0.3-0.4%, and under a couple plausible scenarios for the future path of oil prices, core PCE is 10-15bp higher on average over 2026-27," the analysts said. "We separately estimate that petroleum inputs make up about 1.0% of the cost of core personal consumption, so full pass-through would imply a 50% rise in oil prices yields a 0.5% increase in core PCE prices," they added.

Still, despite the closure of the vital waterway, oil prices have slumped in May amid the safe transit of scores of vessels through the chokepoint under the supervision of Iran’s Islamic Revolutionary Guard Corps. Hopes for a peace deal have also kept a lid on crude prices. Brent was on track for a May decline of more than 19%, its biggest fall since March 2020. WTI crude was headed for a monthly slide of more than 16%, its worst since April 2025.

Source : https://www.investing.com/news/commodities-news/oil-prices-set-for-sharp-weekly-declines-on-usiran-peace-deal-prospects-4715874

C L

MAJOR DATA RELEASED DURING LAST WEEK

MAJOR DATA COMING OUT THIS WEEK (Time zone GMT+3)

Disclaimer

Moving Average Convergence/Divergence (MACD):

MACD uses different exponential moving averages to generate buy and sell indicators. The lower pane of the chart shows two lines: a Differential Line and a Signal Line. The Differential Line is the difference between a short and long-period exponential moving average, typically 12 and 26 periods. The Signal Line is typically a 9-period exponential moving average. When the DL crosses the SL from above, a sell indicator is generated, and when it crosses from below a buy signal is generated.

Relative Strength Index (RSI):

This is a momentum indicator that measures a security's price in relation to itself. The lower pane of the chart shows a line that fluctuates on a scale of 0 to 100. Typically buy signals are generated at 30 and sell signals are generated at 70. If the line breaks 30, the security is oversold, and a reversal is imminent. If the line breaks 70, it is overbought and is due for a downward correction.

This report is provided by our experts in the research group for information purposes only and is deemed reliable but provides no guarantee as to its accuracy or completeness. Trust Capital S.A.L. will not be accountable for any decision based on the contents of this report. This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe for any investment or service. Trust Capital S.A.L. has based this document on information obtained from sources it believes to be reliable but which it has not been independently verified. Trust Capital S.A.L. make s no guarantees, representations or warranties and accept no responsibility or liability as to its accuracy or completeness. Expressions of opinion herein are subject to change without notice.

 © Copyright, Trust Capital S.A.L.

ALL RIGHTS RESERVED.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Trust Capital S.A.L.