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The United States (US) House of Representatives is poised to begin casting votes on the Republican party's tax and budget bill that is front-loaded with many of President Donald Trump's wishlist items. President Trump has colloquially refered to the tax and budget bill as a "big, beautiful bill", leading Congressional Republicans to officially rename the document the "One Big Beautiful Bill Act".

Key Republicans have been hammering on dissidents to the bill within their own party after several hard-line Republicans voiced displeasure with the budget outline: some felt that the budget doesn't include enough cuts to critical federal spending programs like Medicaid, while others felt that the budget does the exact opposite of the Republican platform's stated goals of reducing the government deficit.

The budget bill is expected to be voted on sometime Thursday, and if passed, the One Big Beautiful Bill Act is poised to add somewhere between $3T and $4T to the US federal budget deficit over the next ten years.

• WTI crude oil retreats below $62.00
• EIA report highlights increased supply, placing downside pressure on prices.
• Geopolitical risks, including US-Iran nuclear talks, remain a key focal point for oil prices.

Oil prices have been under persistent pressure since the inauguration of US President Donald Trump in January, weighed down by a combination of recession fears, rising global supply, and a softer US Dollar. 

These factors have collectively contributed to renewed weakness in the liquid commodity, dampening the bullish momentum that previously supported elevated energy prices.

For West-Texas Intermediary (WTI) Crude Oil - the US benchmark extracted primarily from Texas and surrounding regions - prices found support late last year as global trade resumed and post-pandemic demand surged. 

This resurgence helped lift energy prices through the final months of last year, particularly as supply remained constrained.

Oil prices have been under persistent pressure since the inauguration of US President Donald Trump in January, weighed down by a combination of recession fears, rising global supply, and a softer US Dollar. 

These factors have collectively contributed to renewed weakness in the liquid commodity, dampening the bullish momentum that previously supported elevated energy prices.

For West-Texas Intermediary (WTI) Crude Oil - the US benchmark extracted primarily from Texas and surrounding regions - prices found support late last year as global trade resumed and post-pandemic demand surged. 

This resurgence helped lift energy prices through the final months of last year, particularly as supply remained constrained.

However, under the Trump administration, new energy policy priorities, which have included proposals to expand domestic oil production and ease environmental regulations, have shifted market expectations for long-term supply growth. These developments, coupled with lingering macroeconomic uncertainty and slowing growth in major economies, have altered the broader supply-demand outlook moving into mid-2025.

Adding to the downward pressure on crude, fresh data from the US Energy Information Administration (EIA) revealed a larger-than-expected build in domestic crude inventories, signaling potential demand weakness and reinforcing concerns about oversupply.

The rise in stockpiles comes amid ongoing increases in production from both non-OPEC players, including US shale, and OPEC+, which has recently confirmed plans to ramp up output to defend market share. These supply-side pressures have further weighed on WTI, now trading below $62 per barrel.

Despite known risks surrounding the oil market, including inflation sensitivity and fiscal spillovers, geopolitical developments remain a key wildcard. 

On Wednesday, reports surfaced that Israel may be preparing potential strikes on Iranian nuclear facilities, briefly pushing prices higher before gains faded in the wake of bearish inventory data. The potential for escalation in the Middle East could reintroduce risk premiums, particularly if supply routes are disrupted, though for now, the market appears more focused on structural imbalances.

WTI rally runs out of fuel below $62.00

From a technical standpoint, WTI crude recently attempted to break above the 38.2% Fibonacci retracement level ($64.179) of the January–April YTD decline. 

However, the rally was capped by strong selling pressure, forming a long upper wick on the daily candlestick, a classic sign of bullish exhaustion and a potential reversal point.

This reinforces the $64.00 region as key resistance, and unless buyers can regain control above this level, near-term price action may favor further consolidation or downside movement.

The 10-day Simple Moving Average (SMA) near $61.68 is acting as dynamic support, while a clean break lower could expose the next support zone at $60.58 (23.6% Fib).

WTI Crude Oil daily chart

• The Dow Jones fell on Wednesday, shedding 800 points at its lowest and slipping below 42,000.
• Investors have pivoted to concerns about the US federal budget which will send US deficits higher, not lower.
• Market concerns that the Trump administration’s bespoke budget won’t actually do anything to fix inflation or US debt issues sent Treasury yields higher, putting downward pressure on equity markets.

The Dow Jones Industrial Average (DJIA) recoiled on Wednesday, tumbling 800 and testing below 42,000 after demand for United States (US) Treasuries declined. Financial markets are showing waning interest and confidence in US debt financing, even with 20-year Treasury bonds offering a yield north of 5% for the first time since October of 2023. The bid-to-cover on 16B worth of 20-year Treasuries fell below its six-month average of 2.57, slipping to 2.46 and sending market sentiment into a brief tailspin.

The US government inches closer to approving US President Donald Trump’s “big, beautiful budget” that will add almost four trillion dollars to the US deficit over the next decade. The deficit-swelling budget comes less than a week after Moody’s downgraded US sovereign debt, citing long-running failures by the US government to reel in government spending or sufficiently increase tax receipts.

A rate cut, a rate cut, my kingdom for a rate cut!

Investor hopes for another rate cut from the Federal Reserve (Fed) continue to get pushed further out this year. According to Fed policymakers, the looming threat that US tariffs could reignite inflation and throw a wrench in US economic growth is limiting their ability to adjust policy rates as they wait for clear data. The Trump administration is barreling towards the end of its own “reciprocal tariffs” suspension deadline, and evidence of ink-on-paper trade deals remains functionally non-existent. With the future of US trade policy muddying the waters, rate traders are now split on whether the Fed will deliver its first quarter-point rate cut in September or October.

Read more stock news: US stock market slips despite Republicans inching closer to major tax cuts

Dow Jones price forecast

Fundamentals have bled through the chart paper, taking over market dynamics as investors react to headlines about trade and federal budgets. The Dow Jones Industrial Average is still trading above the 200-day Exponential Moving Average (EMA) near 41,570, at least for now. Bullish price action continues to have the wind knocked out of its sails, and buyers have thus far struggled to muscle the major equity index back to the 43,000 handle.

Dow Jones daily chart

• The Canadian Dollar climbed over 0.5% on Wednesday as markets hammer the US Dollar.
• Investors are growing apprehensive of the Greenback as Treasury yields climb.
• Federal budget deficit concerns and a stubbornly immovable Fed are crimping investor confidence.

The Canadian Dollar (CAD) caught a firm bid on Wednesday, climbing one-half of one percent during the midweek market session. It’s a data-light session during the American market window, and markets are roiling as federal debt headlines and rising Treasury yields spike market confidence into the floor.

Canadian New Housing Prices surprisingly contracted in April. The data is strictly low-tier, but the potential return of housing affordability in one of the most expensive developed countries in housing terms is providing some support for the Loonie. Impactful Canadian economic data will remain limited through the remainder of May, with the Bank of Canada’s (BoC) next rate call slated for June 4.

Daily digest market movers: Canadian Dollar catches a bid as markets fret over debt and yields

• The Canadian Dollar is on the rise in the near term, but still has plenty of work remaining to pair May’s early losses.
• US Treasury bonds saw both rising yields and declining demand on Wednesday as US government debt concerns reignite.
• A recent rise in Crude Oil prices is helping to provide some support for the Loonie. Barrel bids have made a halting recovery from recent lows.
• The US government is on pace to pass President Donald Trump’s “big beautiful tax bill” that will add $4T to the US deficit over the next ten years.
• The spending-heavy, revenue-light budget comes hot on the heels of the US losing its triple-A sovereign debt rating from the Moody’s ratings agency for the first time in over a century.

Canadian Dollar price forecast

The Canadian Dollar has gained ground against the Greenback for three straight trading sessions, pushing USD/CAD back into defensive positioning and sending bids back down to the 1.33850 region. As the Loonie pares away near-term losses against the US Dollar, USD/CAD is caught in a downside pivot below the 200-day Exponential Moving Average (EMA) near 1.4025. Technical oscillators are still caught in a downside pivot, but still have plenty of room to run before hitting oversold territory, implying USD/CAD could have some room to move further lower.

USD/CAD daily chart

The US Dollar (USD) maintained its weekly leg lower well in place, weakening to new two-week lows on the back of rising concerns over the US fiscal position in light of President Trump’s tax bill and worries over the performance of the US economy.

Here’s what to watch on Thursday, May 22:

The US Dollar Index (DXY) retreated for the third consecutive day on Wednesday, breaking below the psychological 100.00 support to hit new two-week troughs. The Chicago Fed National Activity Index is due, seconded by the usual Initial Jobless Claims, Existing Home Sales and the advanced S&P Global Manufacturing and Services PMIs.

EUR/USD surpassed the key 1.1300 barrier and advanced to new two-week highs, always on the back of the intense sell-off in the Greenback. The preliminary HCOB Manufacturing and Services PMIs are expected in Germany and the Euro area, along with Germany’s IFO Business Climate and the release of the European Central Bank (ECB) Monetary Policy Meeting Accounts. In addition, the ECB’s Elderson and De Guindos are due to speak.

GBP/USD reached the 1.3470 zone for the first time since February 2022 following the weaker US Dollar and higher-than-estimated UK inflation data. The Public Sector Net Borrowing figures will be published, followed by the CBI Industrial Trends Orders, and the flash S&P Global Manufacturing and Services PMIs. Furthermore, the BoE’s Pill and Breeden will speak.

There was no respite for the downward trend in USD/JPY. That said, spot dropped for the seventh day in a row, revisiting the mid-143.00s, or two-week troughs. In Japan, Machinery Orders readings are due, ahead of the advanced Jibun Bank Manufacturing and Services PMIs, and the weekly Foreign Bond Investment data. The BoJ’s Noguchi will speak as well.

AUD/USD extended its weekly choppiness and resumed its uptrend, leaving behind Tuesday’s decline and retesting the 0.6460 region. The preliminary S&P Global Manufacturing and Services PMIs are due, while the RBA’s Hauser is also due to speak.

WTI reversed initial gains just above the $64.00 mark per barrel and deflated below $62.00 amid fears of potential supply disruptions and larger-than-expected weekly inventories, as per the EIA’s report.

Gold rose to weekly highs north of the $3,300 mark per troy ounce in response to the selling pressure hurting the US Dollar and persistent geopolitical effervescence. Silver prices, in the meantime, climbed to new three-week tops past the $33.00 mark per ounce.

• Gold rises as traders brace for vote on Trump’s debt-heavy tax bill.
• Moody’s downgrade and falling US Dollar fuel safe-haven demand for Gold.
• Middle East unrest offsets easing US-China trade tensions, keeping risk appetite muted.

Gold prices advance by over 0.50% and remain above the $3,300 mark as traders grow increasingly nervous about the United States (US) tax bill vote, along with escalating tensions in the Middle East. XAU/USD trades at $3,307 after bouncing off a daily low of $3,285.

The market mood remains downbeat as major US equity indices post losses while US Treasury bond yields rise. Market participants are awaiting the approval of President Trump’s tax-cut bill, which, according to the Congressional Budget Office (CBO), would add nearly $3.8 trillion to the US national debt.

The approval could underpin US stocks higher. However, the Greenback’s reaction is uncertain following Moody’s downgrade of US government debt last Friday, which triggered a USD sell-off, as depicted by the US Dollar Index (DXY).

The DXY, which tracks the performance of the American currency against six others, declines 0.52% to 99.49, a tailwind for bullion prices.

Heightened tensions in the Middle East boosted Gold prices, even though China-US tensions de-escalated as Beijing and Washington substantially reduced tariffs for 90 days to kick off negotiations to achieve a trade deal.

This week, traders will eye Fed speeches, Flash PMIs, housing data and Initial Jobless Claims.

Gold daily market movers: Gold rallies amid high US Treasury bond yields, weak US Dollar

• US Treasury bond yields are skyrocketing as the US 10-year Treasury note yield climbs nine and a half bps to 4.58%. Meanwhile, US real yields are also up nine and a half basis points at 2.229%.
• Bullion prices are rising due to concerns about the increase in US debt. Last week, Moody’s, the international rating agency, downgraded the US government rating from AAA to AA1, propelling Gold prices higher as the US Dollar got ditched and the US fiscal position worsened.
• On Tuesday, Federal Reserve (Fed) policymakers commented that monetary policy is appropriate, acknowledging that rising US import tariffs are inflation-prone and warrant holding rates.
• Gold price could extend its gains, boosted by geopolitical news. On Tuesday, CNN news, citing multiple sources, revealed that Israel is preparing to attack Iranian nuclear facilities.
• Data from the Chicago Board of Trade (CBOT) suggests that traders are pricing in 48.5 basis points of easing towards the end of the year.

XAU/USD technical outlook: Gold poised to test $3,350 as bulls gather steam

Gold price rally extended for the third straight day, as price action has printed successive days of higher highs and higher lows, with buyers eyeing key resistance levels. Momentum, as depicted by the Relative Strength Index (RSI), suggests that the uptrend will continue before the RSI gets to overbought territory, which could warrant a pause lying ahead.

Therefore, Gold's first resistance would be the $3,350 psychological level. Once surpassed, the next target would be $3,400, followed by the May 7 daily high of $3,438, before testing the all-time high (ATH) at $3,500.

For a bearish reversal, Gold bears must drag spot prices below $3,300. Once cleared, immediate support emerges at a May 20 daily low of $3,204, ahead of the 50-day Simple Moving Average (SMA) at $3,184.

• The Mexican Peso fails to respond to rising Retail Sales, with USD/MXN breaking above 19.300
• House of Representatives' tax bill vote remains in focus, with both bulls and bears weighing the probability of a clear move in either direction.
• USD/MXN rises above prior trendline resistance with prices heading toward 19.400.

The Mexican Peso (MXN) and the US Dollar (USD) have been anxiously waiting for the release of crucial economic data and remarks from policymakers in anticipation of the next big move.

For the Mexican Peso, the release of April’s Retail Sales figures that did little to deter the movement of the pair continues to be overshadowed by the expected path of the US Dollar and the progression of the highly anticipated upcoming new “one big beautiful bill” recently proposed by US President Donald Trump.

With Mexico Retail Sales 12:30 GMT data release beating forecasts on a monthly and annual basis, developments out of the United States overshadowed the recent report, highlighting the significance of the Greenback in the current economic environment.

Meanwhile, the projected trajectory of the Greenback remains in focus as investors await further commentary from US Federal Reserve (Fed) officials and the highly anticipated House of Representatives vote on President Donald Trump’s “One Big Beautiful Bill Act.” 

Market participants are closely assessing the short- and long-term implications of the proposed tax legislation, which could significantly influence the fiscal policy outlook and investor sentiment toward the US Dollar.

Mexican Peso daily digest: USD/MXN rises on hopes for a stronger Greenback

• Mexican Retail Sales increased by 0.5% in March compared to the 0.2% rise in February, with the YoY figures smashing forecasts, coming in at 4.3%, far above the 2.2% forecasts.
• As the US Dollar drives broader market direction, shifts in USD sentiment, driven by US fiscal policy, economic data, or Fed signals, tend to dictate the short-term trajectory of USD/MXN, with the Peso reacting accordingly.
• President Trump’s “One Big Beautiful Bill” aims to extend the 2017 Tax Cuts and Jobs Act and introduce new tax relief measures. 
• Suggested amendments would include State and Local Tax (SALT) deductions, which are expected to triple from $10K to $30K for married couples in the US, reducing the amount of income the government receives per tax year and placing additional pressure on the fiscal budget.
• To offset the cost of expanded tax cuts, President Trump has proposed reducing expenditure on programs associated with Medicaid, food stamps, and green energy subsidies, while reallocating funds toward defense and immigration enforcement. 
• On the US side, S&P Global will release the preliminary Purchasing Managers Index (PMIs) for May and Existing Home Sales data for April on Thursday for fresh economic signals.

Mexican Peso technical analysis: USD/MXN trades cautiously with trendline resistance intact

The USD/MXN has recovered from its lowest level since October, breaking through the previous psychological support level, which has now turned into resistance at 19.30. 

Currently, prices have risen above the prior descending trendline established from the April decline, providing an imminent barrier of support at 19.28.

USD/MXN daily chart

The Relative Strength Index (RSI) indicator has recovered above 36.00, but continues to reflect bearish momentum. Since the 30 mark is considered a potential oversold territory, the bearish trend remains intact, with the next key support level at the round number of 19.20. 

On the other hand, if USD strength resurges and prices rise above the descending trendline, USD/XN could see a retest of the April low near 19.47, bringing the 20-day Simple Moving Average (SMA) into play at 19.53.

• UK CPI inflation climbs to 3.5% YoY in April, well above the BoE’s 2% inflation target.
• Core inflation accelerates to 3.8%, raising doubts over future rate cuts.
• US Dollar tumbles as G-7 stokes speculation of Washington favoring weaker Greenback.

The Pound Sterling (GBP) rose to a new year-to-date (YTD) high of 1.3468 against the US Dollar (USD) on Wednesday as United Kingdom (UK) inflation rose, drifting away from the Bank of England's (BoE) 2% target, which had led to interest rate reductions earlier in the month. At the time of writing, GBP/USD trades at 1.3446, up 0.40%.

UK inflation spikes past forecasts, derailing BoE’s easing path and lifting GBP/USD above 1.34 as the Dollar weakens

Data from the UK has pushed aside the BoE’s intentions to continue reducing interest rates at forward meetings. The Consumer Price Index (CPI) in April rose 3.5% YoY, up from 2.6% in March, revealed the Office for National Statistics (ONS). The core CPI rose by 3.8% YoY, exceeding the 3.4% increase in March.

On the data, UK’s finance minister Rachel Reeves commented on a statement that she was disappointed and added, “I know cost of living pressures are still weighing down on working people.”

The increases in water, gas, and electricity bills contributed to higher consumer inflation. It should be noted that analysts expected CPI at 3.3% and underlying inflation at 3.6%, both figures above the prior month’s print.

Money market futures are pricing in just 35 basis points (bps) of easing from the Bank of England (BoE) towards the end of the year.

Across the Atlantic, discussions about President Trump's “One Big Beautiful Bill” continued. US House Speaker Mike Johnson stated that they had completed SALT discussions and indicated that a Thursday tax bill floor vote remains realistic.

In the meantime, the Greenback continues to weaken, as the US Dollar Index (DXY), which tracks the US Dollar’s value against a basket of six currencies, falls 0.52% to 99.50.

A meeting of the G-7 in Canada has increased speculation that the Trump administration is seeking a weaker US Dollar to reduce the trade deficit. According to Bloomberg, local media in South Korea reported that the Korean Won (KRW) was discussed at trade negotiations with the US.

Ahead this week, the UK economic docket will feature Flash PMIs and BoE speakers. In the US, traders will eye PMIs and Initial Jobless Claims for the week ending May 17, Fed speeches and housing data.

GBP/USD Price Forecast: Technical outlook

GBP/USD uptrend continued as the pair hit a new YTD peak. Momentum remains bullish, as depicted by the Relative Strength Index (RSI), which cleared the latest peak above 60, with enough room before reaching overbought conditions.

That said, GBP/USD's first key resistance level upfront would be 1.3468, followed by the 1.35 figure. If surpassed, the next stop would be the February 18, 2022, swing high at 1.3642.

Conversely, if GBP/USD slides below 1.340, the next support would be 1.3350, followed by 1.3300. Key support levels lie underneath the latter at 1.3250, 1.3200, and the 50-day Simple Moving Average (SMA) at 1.3141.

(This story was corrected on May 21 at 16:05 GMT to say that UK CPI inflation climbed to 3.5 YoY, not 3.6%)

• New Zealand posted a record goods trade surplus with the US in April, led by a surge in agricultural exports.
• The US Dollar faces headwinds from Moody’s credit downgrade, high interest rates and growing deficit projections.
• Markets await progress on Trump’s “One Big Beautiful Bill” in the House as a potential USD catalyst.

The New Zealand Dollar (NZD) continues to strengthen against the US Dollar (USD) on Wednesday, with the release of a record trade surplus in April highlighting the largest monthly goods surplus on record with the United States (US).

Amid ongoing concerns about the rising costs of US imports and broader fiscal uncertainty, the positive trade figures from New Zealand have reinforced investor confidence in the Kiwi. 

The data underscored the country’s export resilience, particularly in agricultural goods, which accounted for approximately 25% of the YoY increase. This robust performance has prompted traders to favor the NZD as an appealing alternative to the Greenback, offering relative stability and return potential in a time of elevated global uncertainty.

Meanwhile, the US Dollar remains weighed down by multiple headwinds: a recent Moody’s credit downgrade, elevated interest rates and mounting fiscal risks tied to President Donald Trump’s proposal to extend the 2017 tax cuts under his sweeping “One Big Beautiful Bill.” These proposed extensions are projected to widen the US federal deficit by over $3.8 trillion, further amplifying concerns over long-term debt sustainability.

NZD/USD is currently trading near multi-week highs, with technical momentum tilted in favor of further upside. However, near-term direction will likely hinge on developments in Washington, where President Trump is actively pressuring the House of Representatives to approve his bill before the Memorial Day recess. Progress or political roadblocks on this front could influence sentiment around the US Dollar and, in turn, the trajectory of NZD/USD.