Forex News
- Silver forms bullish harami, signaling potential short-term upside continuation.
- RSI nears bullish flip despite lingering bearish momentum backdrop.
- Break above $78.88 exposes $80.00 and 100-day SMA.
Silver price advances during the North American session as it forms a ‘bullish harami’ candle chart pattern, an indication that further upside is seen in the short term. At the time of writing, the XAG/USD trades at $75.85, up more than 3%.
XAG/USD Price Analysis: Technical outlook
From a market structure perspective, Silver is upwardly biased but is facing key resistance levels. Momentum remains bearish as depicted in the Relative Strength Index (RSI). Still worth noting, the RSI is about to turn bullish, opening the door for further upside.
The ‘bullish harami’ chart pattern or an ‘inside day’ needs confirmation. This means that XAG/USD must surpass the May 19 daily high of $78.88, which would pave the way for further gains. Above this area, the next resistance is the $80.00 mark, followed by the 100-day Simple Moving Average (SMA) at $81.05.
Downwards, if XAG/USD tumbles below the May 19 daily low of $73.09, expect a drop towards the April 29 daily low of $70.86, ahead of the $70.00 threshold.
XAG/USD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- NZD/USD climbs as improving market sentiment weakens the Greenback.
- FOMC Minutes showed Fed officials remain cautious on rate cuts due to persistent inflation concerns.
- Investors focus on upcoming New Zealand Q1 Retail Sales and S&P PMI data for fresh economic signals.
The NZD/USD pair climbs toward the 0.5870 region on Thursday as the United States (US) Dollar (USD) weakens amid improving market sentiment linked to renewed US-Iran negotiations and a softer safe-haven tone following the latest Federal Open Market Committee (FOMC) Minutes.
The FOMC Minutes showed that Federal Reserve (Fed) officials remain concerned about persistent inflation pressures and prefer to wait for clearer evidence before considering interest-rate cuts.
While the cautious tone initially supported US Treasury yields, broader market sentiment later improved after US President Donald Trump stated that negotiations with Iran are in the “final stages,” boosting demand for risk-sensitive currencies such as the New Zealand Dollar (NZD).
Additional support for the NZD emerged as investors positioned ahead of New Zealand’s upcoming Q1 Retail Sales and S&P Purchasing Managers Index (PMI), which could provide further clues about domestic economic momentum.
Short-term technical analysis:
On the four-hour chart, NZD/USD trades at 0.5874, consolidating just above the short-term 20-period Simple Moving Average (SMA) at 0.5849 but still below the 100-period SMA at 0.5902, which leaves the near-term bias broadly neutral with a slight topside cap. The Relative Strength Index (RSI) around 54 suggests modest positive momentum, yet the pair remains constrained by nearby horizontal resistance at 0.5879 and 0.5888, so bulls need a clean break higher to gain traction.
On the topside, initial resistance comes at 0.5879, ahead of 0.5888 and the 100-period SMA at 0.5902, with a further barrier near 0.5965; a sustained move above these levels would open the way to higher ground. On the downside, immediate support is seen at 0.5865, followed by the 20-period SMA at 0.5849 and the horizontal floor at 0.5846, and a drop through this cluster would expose the pair to a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool.)
- Hopes for a US-Iran deal weigh on Oil and US Dollar demand.
- Fed minutes show officials preparing for possible rate hikes.
- ECB June hike bets rise as inflation tops target.
The Euro (EUR) seems to have bottomed below 1.1600 and edges higher on Wednesday amid growing speculation of a US-Iran deal and a hawkish Federal Reserve (Fed) outlook at April’s monetary policy meeting. At the time of writing, EUR/USD exchange rate is trading at 1.1622, up 0.19%.
EUR/USD rises as softer oil offsets hawkish Fed minutes
Sentiment improved on news that the US is about to get a deal with Iran. US President Donald Trump said that negotiations were in the final stages, but warned Iran that failing to reach a deal would open the door for attacks on the Islamic Republic.
Oil prices sank on the news, extending their losses by more than 5%, with the US crude Oil benchmark, WTI, trading around $98.45 per barrel. The positive correlation between WTI and the US Dollar pushed the Greenback lower, as shown by the US Dollar Index (DXY).
The DXY, which measures the buck’s value against six currencies, is down 0.19% at 99.11.
Recently, the Financial Times reported that “two China-bound supertankers crossed the Strait of Hormuz.” This adds to speculation that an opening of the Strait of Hormuz could alleviate inflationary pressures, driving energy prices lower and reducing the risk of a global stagflationary scenario.
In the US, the Fed's last meeting minutes showed that the majority of the FOMC leaned hawkish, supporting some policy tightening if inflation remains persistently above the 2% goal.
April’s meeting was the second in which more officials said that increasing the borrowing costs could be appropriate if prices remain high. The minutes showed that “participants generally observed Middle East conflict could have significant implications for balance of risks and appropriate policy path.”
Traders had priced in nearly 50% odds for a rate hike at the Fed’s December meeting.
ECB expected to hike at June meeting
Across the pond, the latest inflation reading in the Eurozone (EZ) surpassing the 3% threshold is further confirmation by several European Central Bank (ECB) policymakers that they need to act in the June meeting.
At the April meeting, the ECB debated raising rates, signaling that the June 11 meeting could be the first to increase the ECB’s Deposit Rate.
Prime Terminal data showed a nearly 82% chance the ECB would increase rates by 25 basis points.
On Tuesday, ECB’s Kocher said a June rate hike remains possible if there is “no improvement in the Iran war.” Joachim Nagel of the Bundesbank echoed that view, saying the ECB is moving away from its baseline scenario and that “we may need to act in June.”
Francois Villeroy of the Banque de France said that the central bank “will be ready to act as needed” and that the Iran conflict created risks to growth and inflation.
EUR/USD Price Forecast: Technical outlook
In the daily chart, EUR/USD trades at 1.1623. The pair holds a mildly bearish near-term bias as it lingers under the latest triple simple moving average around 1.1649, keeping price capped beneath a key dynamic barrier. The broader structure still respects the downward resistance trend line projected from 1.1929, while the Relative Strength Index (14) near 42 suggests fading upside momentum rather than outright oversold conditions.
On the topside, initial resistance is seen at the triple simple moving average near 1.1649, with the descending trend line from 1.1929 reinforcing a higher cap if buyers attempt a recovery. On the downside, support emerges first around the former upward trend-line break region near 1.1578, ahead of the more structural uptrend origin around 1.1411, where buyers would be expected to show stronger interest if the correction deepens.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.03% | -0.84% | 0.08% | -0.07% | 0.01% | -0.31% | 0.05% | |
| EUR | 0.03% | -0.82% | 0.17% | -0.05% | 0.03% | -0.21% | 0.05% | |
| GBP | 0.84% | 0.82% | 0.94% | 0.77% | 0.86% | 0.62% | 0.86% | |
| JPY | -0.08% | -0.17% | -0.94% | -0.22% | -0.14% | -0.41% | -0.10% | |
| CAD | 0.07% | 0.05% | -0.77% | 0.22% | 0.01% | -0.20% | 0.08% | |
| AUD | -0.01% | -0.03% | -0.86% | 0.14% | -0.01% | -0.24% | 0.11% | |
| NZD | 0.31% | 0.21% | -0.62% | 0.41% | 0.20% | 0.24% | 0.24% | |
| CHF | -0.05% | -0.05% | -0.86% | 0.10% | -0.08% | -0.11% | -0.24% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Here is what you need to know for Thursday, May 21:
The US Dollar Index (DXY) trades with a softer tone near the 99.10 region as improving market sentiment reduces safe-haven demand for the Greenback. The Federal Open Market Committee (FOMC) Meeting Minutes released on Wednesday showed Federal Reserve (Fed) officials remain concerned about persistent inflation pressure and prefer to wait for clearer evidence before considering interest rate cuts, helping US Treasury yields stabilize.
Optimism increased after reports indicated that negotiations between the United States (US) and Iran are progressing, with US President Donald Trump saying that the US is in the “final stages” of talks with Iran, according to a White House pool report.
During a press conference at Joint Base Andrews, Trump delivered a typical mixed message regarding the ongoing diplomatic efforts. He stated, “We’ll see what happens,” and emphasized that a deal could be reached. He added, “If not, we may resort to some tough measures, but hopefully that won’t be necessary.”
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.23% | -0.39% | -0.17% | -0.00% | -0.73% | -0.72% | -0.30% | |
| EUR | 0.23% | -0.17% | 0.07% | 0.23% | -0.51% | -0.48% | -0.07% | |
| GBP | 0.39% | 0.17% | 0.23% | 0.40% | -0.36% | -0.32% | 0.09% | |
| JPY | 0.17% | -0.07% | -0.23% | 0.17% | -0.57% | -0.51% | -0.13% | |
| CAD | 0.00% | -0.23% | -0.40% | -0.17% | -0.73% | -0.66% | -0.30% | |
| AUD | 0.73% | 0.51% | 0.36% | 0.57% | 0.73% | 0.03% | 0.43% | |
| NZD | 0.72% | 0.48% | 0.32% | 0.51% | 0.66% | -0.03% | 0.41% | |
| CHF | 0.30% | 0.07% | -0.09% | 0.13% | 0.30% | -0.43% | -0.41% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD rebounds toward the 1.1630 region as the softer US Dollar (USD) supports the shared currency. On another note, an ECB rate hike is very likely in June as the inflation outlook is moving toward the adverse scenario.
GBP/USD rises near the 1.3450 zone, benefiting from broad USD weakness and the improved risk environment.
USD/JPY falls toward the 158.80 region as declining US Treasury yields and softer safe-haven demand pressure the pair.
AUD/USD climbs near the 0.7160 region as investors focus on Australia’s upcoming Employment Change report. Markets expect around 17.5K jobs to have been added in April, while the Unemployment Rate is forecast to remain at 4.3%.
West Texas Intermediate (WTI) Oil fell near $98.30 per barrel as talk of negotiations between the US and Iran reduced fears of supply disruptions in the Middle East.
Gold surged toward the $4,550 region as safe-haven demand left the USD and if now focused on the precious metal.
What’s next in the docket:
Thursday, May 21:
- Australia May Consumer Inflation Expectations
- Australia April Labor Market Data (Employment Change, Participation Rate, Unemployment Rate)
- Germany April Producer Price Index
- Switzerland Q1 Industrial Production
- France May Preliminary HCOB PMIs
- Germany May Preliminary HCOB PMIs
- EU May Preliminary HCOB PMIs
- UK May Preliminary S&P Global PMIs
- US April Housing Data (Building Permits, Housing Starts)
- US Initial Jobless Claims, May Philadelphia Fed Manufacturing Survey
- US May Preliminary S&P Global PMIs
- EU May Preliminary Consumer Confidence
- NZ Q1 Retail Sales
- UK May GfK Consumer Confidence
- Japan April CPI
Friday, May 22:
- Germany Q1 Gross Domestic Product
- UK April Retail Sales
- Germany May IFO Survey (Business Climate, Current Assessment, Expectations)
- Canada March Retail Sales
- US May Michigan Consumer Sentiment and Inflation Expectations
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- Fed minutes show officials preparing the ground for a possible rate hike.
- US Dollar slips to two-day lows, supporting non-yielding bullion demand.
- Iran warnings keep geopolitical risks elevated ahead of US PMIs.
Gold (XAU/USD) finds bids and edges higher during the North American session on Wednesday after the Federal Reserve’s (Fed) last meeting minutes showed that most officials favored laying the groundwork for a rate hike. At the time of writing, the XAU/USD pair trades at $4,530, up by 1%.
XAU/USD climbs as lower yields offset hawkish Fed minutes
The minutes of the April meeting revealed that the majority of the board supported the need for some policy tightening if inflation remains stubbornly above the 2% goal. Additionally, the minutes stated that “many participants indicated that they would have preferred removing the language from the post-meeting statement that suggested an easing bias regarding the likely direction of the Committee's future interest rate decisions.”
This is the second meeting in a row in which more Fed officials have said that increasing borrowing costs could be appropriate if prices remain high. The minutes showed that “participants generally observed Middle East conflict could have significant implications for balance of risks and appropriate policy path.”
Money markets have priced in a 50% chance that the Federal Reserve will raise rates at the December meeting, according to Prime Terminal data.
Despite this, bullion continues to rally as the Greenback slides, reaching two-day lows. The US Dollar Index (DXY), which tracks the performance of the American currency against the other six currencies, is down 0.19% at 99.11, after hitting two-day lows at 98.96.
US Treasury yields are also taking a hit, with the 10-year T-note yielding 4.576%, down 9 basis points, a tailwind for the non-yielding metal.
Geopolitics continued to drive Gold’s price action after US President Donald Trump said that negotiations with Iran are in the final stage and warned of attacks if the deal fails. The Iranian Revolutionary Guard Corps said that “if aggression against Iran is repeated, the promised regional war will extend beyond the region this time.”
Data-wise, the US economic docket remains light, with investors awaiting Initial Jobless Claims, housing data, and the S&P Global Flash PMIs.
XAU/USD technical outlook: Gold jumps, poised to test stir resistance around $4,600
Gold is in consolidation mode, with a cluster of key technical resistance levels slightly above $4,600.
Momentum remains bearish, but the Relative Strength Index (RSI) suggests buyers are gaining strength, which could open the door to a test of the $4,600 mark.
A breach of $4,600 will expose the 20-day Simple Moving Average (SMA) at $4,628 and the 50-day SMA at $4,690. On further strength, the next stop would be the $4,700 figure, ahead of the 100-day SMA at $4,787.
On the downside, if XAU/USD drops below $4,500, a move towards the May 19 low at $4,464 and $4,400 is on the cards. Once hurdled, the next stop would be the 200-day SMA at $4,340.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The Minutes from the Federal Reserve’s (Fed) April 28–29 meeting, which were released on Wednesday, revealed a noticeably hawkish tone beneath the surface, with many policymakers signalling they would have preferred to remove the easing bias from the policy statement altogether.
Officials broadly agreed that inflation risks remain tilted to the upside, particularly against the backdrop of escalating tensions in the Middle East, rising energy prices and lingering tariff pressures. According to the minutes, the majority of participants said some additional policy firming would likely become appropriate if inflation continued to run persistently above the Fed’s 2% target.
Policymakers also acknowledged that the conflict in the Middle East could materially alter the balance of risks and complicate the appropriate policy path going forward. Several members warned that elevated Oil prices and tariffs could eventually cause inflation pressures to become more deeply embedded across the broader economy, making it harder for the Fed to justify easing policy anytime soon.
At the same time, the Minutes left the door open for cuts later in the year under a more benign scenario. Several participants noted that rate reductions could become warranted if the geopolitical situation stabilised quickly and inflation pressures resumed easing in a convincing way.
Still, the broader message from the Minutes leans clearly cautious. Participants generally judged that persistent inflation and geopolitical uncertainty may require the current restrictive policy stance to remain in place for longer than previously anticipated.
The document also showed that only a smaller group of officials felt rate cuts would be appropriate on clearer evidence that disinflation was firmly back on track.
Importantly for markets, the Fed staff’s economic outlook was upgraded slightly compared with the March meeting, reinforcing the idea that policymakers still see the US economy as resilient despite tighter financial conditions and geopolitical headwinds.
To sum up
The Fed Minutes reinforced the market’s growing higher-for-longer narrative. Policymakers appear increasingly uncomfortable with lingering inflation risks, especially as higher energy prices and geopolitical uncertainty threaten to delay the disinflation process. Unless inflation cools meaningfully or Middle East tensions ease sharply, the Fed still looks far from signalling an imminent dovish pivot.
Market reaction
The Greenback remains on the back foot on Wednesday, prompting the US Dollar Index (DXY) to test the 99.00 support as investors continue to assess the likelihood of a US-Iran deal, temporarily setting aside steady bets for a tighter-for-longer Fed.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.30% | -0.10% | 0.06% | -0.63% | -0.58% | -0.17% | |
| EUR | 0.13% | -0.19% | 0.02% | 0.18% | -0.51% | -0.45% | -0.05% | |
| GBP | 0.30% | 0.19% | 0.21% | 0.37% | -0.34% | -0.26% | 0.13% | |
| JPY | 0.10% | -0.02% | -0.21% | 0.16% | -0.53% | -0.47% | -0.07% | |
| CAD | -0.06% | -0.18% | -0.37% | -0.16% | -0.69% | -0.59% | -0.23% | |
| AUD | 0.63% | 0.51% | 0.34% | 0.53% | 0.69% | 0.06% | 0.45% | |
| NZD | 0.58% | 0.45% | 0.26% | 0.47% | 0.59% | -0.06% | 0.39% | |
| CHF | 0.17% | 0.05% | -0.13% | 0.07% | 0.23% | -0.45% | -0.39% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of the FOMC Minutes of the April 28-29 meeting at 13:15 GMT.
- The FOMC Minutes could provide fresh clues on how divided officials were before Kevin Warsh takes over as Fed Chair.
- Investors will scrutinize whether policymakers questioned the Fed’s easing bias in April.
- Persistent inflation pressures and higher Oil prices have shifted market expectations from rate cuts toward possible tightening.
The Minutes of the United States (US) Federal Reserve’s (Fed) April 28-29 monetary policy meeting will be published on Wednesday at 18:00 GMT. The US central bank decided to leave the policy rate unchanged at the 3.50%-3.75% range at that meeting, although the decision revealed an unusually high degree of disagreement within the Committee.
Fed Governor Stephen Miran voted in favor of a 25-basis-point (bps) rate cut, while Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan dissented against maintaining an easing bias in the policy statement.
Jerome Powell and company opted to hold rates in April
The Federal Open Market Committee (FOMC) kept rates unchanged in April for a third consecutive meeting, but the focus quickly shifted to the internal divide over the future policy direction. While policymakers broadly agreed on keeping rates steady, disagreement emerged over the communication surrounding the next move.
In the post-meeting statement, the Federal Reserve retained language suggesting an easing bias, implying that future policy adjustments could still lean toward rate reductions if conditions warrant. However, several policymakers appeared increasingly uncomfortable with maintaining that message amid rising inflation risks.
Since the April meeting, the macroeconomic backdrop has shifted significantly. Inflation concerns have intensified following stronger-than-expected price data and higher energy costs linked to geopolitical tensions. Consumer Price Index (CPI) inflation accelerated to 3.8% YoY in April, its highest level in three years, while elevated Oil prices continue to fuel fears of broader price pressures.
At the same time, labor market data remains relatively resilient, reducing the urgency for policy easing. April’s Nonfarm Payrolls showed 115K new jobs created in the US, below the stellar 185K reported in March, but well above the 62K expected.
Previewing the release, Bank of America analysts expect the publication to reinforce the Fed’s recent hawkish tone. They noted that policymakers likely focused on persistent inflation risks and upside pressures linked to geopolitical developments, while Wells Fargo analysts expect the Minutes to provide additional details on whether non-voting members also viewed the next policy move as being equally likely to be a hike or a cut.
The publication could also attract additional attention because it represents the final set of Minutes linked to Jerome Powell’s tenure as Fed Chair before Kevin Warsh officially takes over leadership of the central bank.
When will FOMC Minutes be released and how could it affect the US Dollar?
The FOMC will release the Minutes of the April 28-29 policy meeting at 18:00 GMT on Wednesday.
Market expectations on interest rates have changed sharply over recent weeks. Fed funds futures have shifted away from pricing rate cuts and now reflect growing expectations that rates could remain unchanged for an extended period, with some investors even seeing the risk of higher rates later this year.
According to the FdWatch tool, the chances of a Fed 25 bps rate hike by December sit at 40.1%, against only 43.4% for a hold.
This positioning suggests that the US Dollar (USD) could react strongly if the Minutes reveal broader support for removing the easing bias or indicate that more officials discussed conditions that could eventually justify tighter monetary policy.
The Greenback could gather additional strength if policymakers express rising concerns that inflation risks are becoming more persistent, particularly if discussions show that upside risks outweigh concerns about economic growth.
Conversely, the US Dollar could come under pressure if the publication highlights that most policymakers still considered inflation shocks linked to energy prices as temporary and continued to see the next policy move leaning toward easing once price pressures moderate.
Nevertheless, any market reaction could remain limited as investors may prefer to wait for additional inflation and labor market data before reassessing expectations for the June FOMC meeting under Kevin Warsh’s leadership.
The US Dollar Index (DXY) trades at 99.43 at the time of writing. The near-term tone is bullish as price holds above both the 100-period and 200-period Simple Moving Averages (SMAs) on the 4-hour chart, reinforcing a constructive structure after breaking and moving above the prior downward trend-line resistance. Momentum is stretched, with the Relative Strength Index (RSI) hovering in overbought territory near 72, which suggests upside pressure persists but also leaves the index vulnerable to a corrective pause if buyers lose conviction just below nearby Fibonacci resistance.
On the topside, immediate resistance emerges at the 61.8% Fibonacci retracement, drawn from the March 31 high to the April 17 low, at 99.49, with a break there exposing the 78.6% Fibonacci retracement at the 100.00 round level and the recent swing high near 100.64 as a more significant barrier. On the downside, initial support aligns with the 50% retracement at 99.13, ahead of a broader demand band clustered around the 38.2% Fibonacci retracement at 98.78, the 200-period SMA near 98.59 and the 100-period SMA around 98.50, while deeper pullbacks would look to the 23.6% Fibonacci retracement at 98.34 and the prior swing low at 97.63 to limit losses.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- USD/CHF falls as improving risk appetite pressures the US Dollar.
- Optimism rises after reports suggest Washington and Tehran are advancing toward a potential agreement.
- FOMC minutes reinforce the Fed's higher-for-longer stance.
The USD/CHF drops toward the 0.7875 region on Wednesday as the US Dollar (USD) loses footing amid improving market sentiment.
Market sentiment improved after reports indicated that negotiations between the US and Tehran are progressing. Headlines stated that US President Donald Trump said that the US is in the “final stages” of talks with Iran, according to a White House pool report. Speaking to reporters at Joint Base Andrews, Trump offered a characteristically mixed message about the ongoing diplomatic efforts. “We’ll see what happens,” Trump said, adding that a deal will be reached.
The more optimistic tone reduced safe-haven demand for the USD, crippling USD/CHF's ability to maintain a bullish bias despite lingering geopolitical uncertainty. The Federal Reserve (Fed) Minutes reinforced the market’s growing higher-for-longer narrative. Policymakers appear increasingly uncomfortable with lingering inflation risks, especially as higher energy prices and geopolitical uncertainty threaten to delay disinflation.
Short-term technical analysis:
On the four-hour chart, USD/CHF trades at 0.7877, holding a modest bullish bias as it consolidates above both the 20-period Simple Moving Average (SMA) near 0.7872 and the 100-period SMA around 0.7832. The clustering of nearby supports under price suggests dips remain supported for now, while the Relative Strength Index (RSI) easing back toward the mid-50s hints at fading but still constructive upside momentum rather than outright exhaustion.
On the downside, initial support emerges at 0.7876, reinforced by the prior horizontal floor at 0.7858 and then the 20-period SMA close to 0.7872, with the deeper 100-period SMA around 0.7832 acting as a more significant cushion if selling pressure accelerates. On the topside, immediate resistance is seen at the 0.7895 horizontal barrier, with a break above exposing the next cap near 0.7907, where bulls would need to clear supply to extend the recovery leg.
(The technical analysis of this story was written with the help of an AI tool.)
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
