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Commerzbank’s Singapore team highlights that Singapore’s Q1 Gross Domestic Product (GDP) was revised sharply higher to 6.0% year-on-year, with strong AI-related demand and robust construction and services activity. Inflation remains contained near the lower end of MAS’s forecast range. Despite this supportive backdrop and lower Oil prices, USD/SGD remains confined within a 1.2650–1.2840 range.

Stronger growth yet contained inflation

"The final Q1 GDP was revised up significantly to 1.0% qoq sa from -0.3% for the advance estimate (Bloomberg consensus: 0.2%) vs 1.3% in Q4 2025. On an annual basis, it translated to 6.0% yoy from 4.6% initially (Bloomberg consensus: 5.2%) vs 5.7% in Q4 2025."

"Despite the strong Q1 outturn, MTI warned that growth headwinds have “risen significantly” due to ongoing supply chain disruptions and higher commodity prices. While AI-related capex is expected to remain supportive through 2026, MTI cautioned that tech firms could scale back investment commitments, weighing on activity."

"On inflation, April CPI held steady at 1.8% yoy (Bloomberg consensus: 2.1%) and unchanged from March. Although fuel and energy inflation picked up sharply, prices for non-energy goods and services remained relatively stable, suggesting limited second-round pass-through from higher global commodity prices."

"In FX, USD/SGD fell 0.2% to 1.2770 yesterday, driven by lower crude oil prices and a weaker USD. The pair has been rangebound since April, holding within the 1.2650-1.2840 range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• USD/JPY clears 159.00 after bouncing from 50-day SMA support.
• RSI remains bullish, but fears of intervention cap upside momentum.
• A break below 159.00 exposes the 158.78 and 157.62 support levels.

The USD/JPY pair recovers some ground on Tuesday, rising over 0.25% as buyers ignore the intervention zone, clearing 159.00 and aiming to challenge the 159.50 area. At the time of writing, the pair trades at 159.38.

USD/JPY Price Forecast: Technical outlook

Price action shows USD/JPY is poised to consolidate further within the 159.00-160.00 area, with further upside expected after the pair bounced off the 50-day Simple Moving Average (SMA) at 158.79, extending its gains past 159.00.

Momentum, although bullish with the Relative Strength Index (RSI) above its 50-neutral level, remains capped by fears for a possible intervention by Japanese authorities in the FX markets.

On the downside, if USD/JPY moves below 159.00, traders could eye the 50-day SMA at 158.78. Below this level lies the 100-day SMA at 157.62, ahead of the May 6 low of 155.04.

USD/JPY Price Chart – Daily

• US defensive strikes in Iran sour risk appetite across markets.
• WTI falls below $95, easing some inflation-pressure concerns.
• Traders eye Core PCE after consumer confidence weakens.

Gold (XAU/USD) price tumbles more than 1.60% on Tuesday as the US Dollar (USD) strengthens on renewed haven demand following US strikes in southern Iran. At the time of writing, XAU/USD trades below the $4,500 mark after reaching a daily high of $4,580.

XAU/USD falls as US-Iran tensions drive investors into USD

Military activity resumed in southern Iran, as Tehran claimed that the US broke the ceasefire deal. However, Washington argued that they conducted defensive attacks aimed at destroying missile launchers and boats attempting to lay mines in the Strait of Hormuz.

US Secretary of State Marco Rubio poured cold water on risk appetite, saying that reaching a deal could “take a few days.”

US equities pared their gains as risk appetite turned sour, pushing investors towards the safety of the US Dollar, which, according to the US Dollar Index (DXY), is up 0.17%. The DXY, which measures the Greenback's performance against other currencies, is at 99.17.

Oil prices extended their decline, with West Texas Intermediate (WTI) crude falling 2.75% to $94.34 per barrel. Easing inflation concerns were also reflected in US Treasury yields, with the policy-sensitive two-year note slipping nearly four basis points to 4.074%.

Money markets had priced in a 58% chance of a Federal Reserve (Fed) rate hike towards the end of the year. For the June meeting, traders priced in a 99% chance for a hold on Kevin Warsh's first meeting as the Fed Chair.

Data from the US showed that rising living costs are weighing on households, as the Conference Board’s Consumer Confidence Index fell to 93.1 in May, though it still beat economists’ forecast of 92, according to Bloomberg’s poll. The survey highlighted growing consumer anxiety, with two-thirds of respondents reporting reduced spending due to higher prices.

On Monday, Nikkei reported that Washington and Tehran reached a deal to extend the ongoing ceasefire for 60 days. The agreement revealed that Iran would clear mines from the Strait of Hormuz within 30 days, restore passage for all ships, and end transit fees. Nuclear talks would resume during the 60-day ceasefire, while Washington would gradually ease sanctions on Iranian assets.

This week’s US economic calendar will focus on housing figures, Durable Goods Orders, the second reading of Q1 2026 GDP, labor market data, and the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge.

XAU/USD technical outlook: Gold tumbles below $4,500 sellers target $4,300

Gold fell under the $4,500 threshold, poised to test $4,453, the recent cycle low, which, if broken, could push the yellow metal towards the 200-day Simple Moving Average (SMA) at $4,387.

The Relative Strength Index (RSI) suggests further downside as it approaches oversold territory.

On the other hand, for a bullish recovery, buyers must reclaim the $4,500 mark before testing the $4,550 psychological level. A breach of the latter will expose the $4,600 figure, before challenging the 50-day SMA at $4,647.

• AUD/USD trades in a tight range as traders await Australia’s April inflation data due on Wednesday.
• Australia’s annual inflation is expected to ease slightly to 4.4% in April from 4.6% in March.
• Technically, AUD/USD maintains a broader bullish structure while holding above key moving averages.

AUD/USD trades in a narrow range on Tuesday, even as the US Dollar (USD) strengthens on fading hopes for a quick resolution to the Middle East war after US forces carried out fresh strikes in southern Iran, overshadowing ongoing diplomatic efforts between Washington and Tehran. At the time of writing, the pair is trading around 0.7162, down 0.14% on the day.

The subdued price action comes as traders refrain from placing aggressive bets ahead of Australia’s inflation data due on Wednesday. Rising Energy prices linked to ongoing supply disruption concerns in the Middle East continue to fuel upside risks to inflation after Australia’s Consumer Price Index (CPI) accelerated to 4.6% YoY in March.

Economists expect Australia’s annual inflation to ease slightly to 4.4% in April, while the Reserve Bank of Australia's (RBA) closely watched Trimmed Mean CPI is forecast to edge higher to 3.4% YoY from 3.3% in March.

A stronger-than-expected inflation reading could reinforce expectations that the RBA may maintain its tightening bias for longer, potentially supporting the Australian Dollar (AUD).

In contrast, softer inflation data could further reduce near-term rate hike expectations, especially after Australia’s labor market showed signs of cooling. The unemployment rate unexpectedly rose to 4.5% in April, while Employment Change fell by 18.6K against expectations for a 17.5K increase.

Technical Analysis:

On the daily chart, AUD/USD maintains a constructive bullish bias as it holds above the 50-day, 100-day and 200-day Simple Moving Averages (SMAs) clustered between roughly 0.7100 and 0.6800.

The Relative Strength Index (RSI) near 51 signals neutral momentum after the recent pullback, while the Moving Average Convergence Divergence (MACD) has slipped slightly below zero, hinting that upside may be slowing but not yet reversing the broader positive structure.

On the topside, initial resistance is aligned with the horizontal cap at 0.7200, where a daily close higher would reopen the path toward fresh highs in the broader uptrend.

On the downside, immediate support is seen at the 50-day SMA around 0.7100, followed by the 100-day SMA near 0.7035. A deeper slide toward the 200-day SMA at 0.6803 would be needed to materially undermine the prevailing bullish outlook.

(The technical analysis of this story was written with the help of an AI tool.)

According to ING’s Deepali Bhargava, India has temporarily contained consumer inflation from higher Oil prices by capping retail fuel pass-through, leaving CPI impacts modest so far. However, wholesale price pressures are surging on fuel and metals, with rising food costs and global rice prices posing upside risks to India’s 2026 inflation forecast as WPI-CPI pass-through builds.

WPI surge threatens benign CPI outlook

"India managed to shield consumers from the full impact of higher global oil prices by limiting the pass-through to retail fuel prices till mid-May. Gasoline and diesel prices have been raised 4 times in the last 10 days. Even so, gasoline prices have risen by only about 8%, making India one of the least affected economies in the region in terms of direct pump-price increases. As a result, the immediate impact on consumer price inflation has been relatively modest, estimated at around 20 basis points."

"Yet underlying cost pressures are building rapidly at the wholesale level. WPI inflation more than doubled to 8.3% year-on-year in April 2026, up from 3.9% in March. Largely, this has been driven by a sharp 25% increase in fuel and metal prices. These pressures are beginning to broaden, with food inflation also showing signs of firming. Global rice prices have started to rise, while edible oil inflation remains elevated. The key risk ahead is that if elevated oil prices persist, upstream cost pressures will increasingly be passed through to consumers. That would push CPI higher and create upside risk to our still‑modest 2026 inflation forecast of 4.4%."

"Elevated wholesale price pressures, potential second-round effects on consumer inflation, and emerging energy supply constraints—particularly in coal—could complicate the outlook if global oil prices remain high for an extended period."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

MUFG analysts see growing downside risks for the Turkish Lira (TRY) versus the US Dollar (USD) as domestic politics and an energy-driven terms-of-trade shock strain Turkey’s external position. With limited FX reserve ammunition and rising geopolitical uncertainty, they now judge upside risks to their USD/TRY forecasts, flagging the possibility of faster depreciation or even a larger one-off devaluation.

TRY vulnerability rising on multiple fronts

"The pace of TRY depreciation has accelerated in recent months following the outbreak of military conflict between Iran and the US in late February."

"After the sharp drawdown in March, reserves had stabilised over the past month until the latest adverse political developments in Turkey last week."

"The CBRT has less ammunition to support the TRY through reserves on this occasion."

"If pressure on the TRY continues to build driven by a combination of adverse domestic political developments and the risk of an intensifying Middle East conflict and energy price shock, it could trigger a sharper sell-off as Turkey’s reserves are depleted."

"In light of these developments, we judge that upside risks have increased to our current forecasts for USD/TRY to rise up to 50.500 by year end."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

The US Dollar (USD) regains some composure on Tuesday, rapidly reversing Monday’s downtick against the backdrop of persistent uncertainty around the US-Iran peace deal and the reopening of the Strait of Hormuz.

Here is what you need to know on Wednesday, May 27:

The USD Index (DXY) climbed to two-day highs north of the 99.00 hurdle, propped up by unabated concerns in the Middle East conflict. The weekly MBA Mortgage Applications are due on Wednesday, seconded by the ADP Employment Change Weekly. In addition, the Fed’s Logan and Cook are due to speak.

EUR/USD traded with humble losses, retreating toward the 1.1600 region and fading Monday’s decent advance. The ECB will release its Financial Stability Review (FSR).

GBP/USD met some tough resistance beyond the 1.3500 level, retreating alongside the generalised pullback in the risk complex. There will be no releases on the UK calendar.

USD/JPY flirted with multi-week tops around 159.30, resuming its uptrend following Monday’s hiccup. BoJ’s Governor Ueda is due to speak in an otherwise empty docket in Japan.

AUD/USD alternated gains with losses around 0.7170, failing to extend Monday’s constructive performance. Next in Oz will be the release of key inflation figures along with Construction Work Done readings and the speech by the RBA’s Hewson.

WTI prices dropped to the vicinity of the $89.00 mark per barrel as traders continued to closely follow developments in the Middle East. The API will publish its weekly prints on US crude oil stockpiles on Wednesday.

Gold deflated to two-day lows, putting once again the $4,500 mark per troy ounce to the test amid a decent rebound in the US Dollar and unabated effervescence on the US-Iran front.

• GBP/USD falls as traders reassess US-Iran negotiations following renewed military escalation.
• Higher Oil prices continue to fuel inflation concerns linked to supply disruptions in the Strait of Hormuz.
• Recent softer UK labor market and inflation data prompted traders to scale back expectations for Bank of England rate hikes.

The British Pound (GBP) weakens against the US Dollar (USD) on Tuesday as traders reassess ongoing US-Iran negotiations following renewed US military action in southern Iran. At the time of writing, GBP/USD is trading around 1.3444, down nearly 0.43% on the day.

Iran’s Foreign Ministry accused the United States of violating the ceasefire in the Hormozgan region and warned that Tehran “will respond and will not hesitate to defend itself,” in a statement shared by Iran’s IRIB broadcaster.

The latest developments dampened hopes for a quick end to the war in the Middle East, although diplomatic efforts between Washington and Tehran remain ongoing. Iran’s State TV reported that Parliament Speaker and chief negotiator Mohammad Bagher Ghalibaf returned to Tehran after consultations with Qatari officials in Doha.

Reports suggest the talks focused on the issue of frozen Iranian assets. Earlier in the day, Iran’s Tasnim News Agency, citing a source close to the negotiation team, reported that Tehran wants the US to release $24 billion in frozen Iranian funds as part of a potential deal. Iran is also seeking at least half of that amount to be released immediately after the agreement is announced.

Traders continue to favor the US Dollar amid ongoing uncertainty surrounding US-Iran negotiations. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.18, up nearly 0.21% on the day.

The Greenback is also supported by hawkish Federal Reserve (Fed) expectations. US inflation remains above the Fed’s 2% target, while higher Oil prices linked to supply disruptions in the Strait of Hormuz continue to add inflation pressure, leading traders to price in the possibility of a rate hike by year-end.

In contrast, traders have scaled back Bank of England (BoE) rate hike expectations following recent softer UK economic data, including weaker labor market and inflation figures, which have pushed UK gilt yields lower in recent days. However, markets still expect the BoE to raise interest rates, with upcoming speeches from central bank officials later this week likely to provide fresh policy guidance.

On the data front, US CB Consumer Confidence came in at 93.1 in May, down from 93.8 in April. Traders now await the US Personal Consumption Expenditures (PCE) inflation report on Thursday, while the UK economic calendar remains relatively light for the rest of the week.

• The Dow lagged badly while the S&P 500 and Nasdaq Composite printed fresh all-time highs, with technology doing all the heavy lifting.
• Index futures drifted steadily lower through the overnight and premarket sessions, leaving momentum pinned deep in oversold territory.
• Rate-cut hopes have quietly evaporated, with traders now pricing a genuine chance of a July hike ahead of Thursday's key inflation print.

The Dow Jones Industrial Average (DJIA) is the odd one out following a long weekend, and that should bother anyone leaning into this rally. While the S&P 500 and Nasdaq Composite punched to fresh record intraday highs on Tuesday, hauled up by a frenzied bid for memory chips, the Dow Jones Industrial Average (DJIA) closed down roughly 0.3%, and its futures kept leaking lower across the holiday-thinned overnight and premarket sessions. US markets were shut Monday for Memorial Day, so this was the week's first real read on sentiment, and the price-weighted Dow is quietly refusing to buy what the rest of the tape is selling, namely that a shaky US-Iran ceasefire is as good as a peace deal.

Tech euphoria the Dow can't share

The melt-up has a single engine, and the Dow barely owns a piece of it. Micron (MU) ripped 17% and vaulted past $1 trillion in market value as analysts tripped over themselves to upgrade memory names, with fellow chipmakers Seagate (STX) and Western Digital (WDC) riding the same wave. That is exactly the kind of high-beta, capex-fueled enthusiasm that lifts the Nasdaq and the S&P 500 while doing almost nothing for an index stacked with industrials, financials, and old-economy heavyweights. The Dow's underperformance is not noise, it is the composition of the index telling you where the conviction actually sits, and where it does not.

The futures aren't buying it

Price action overnight backs up the skepticism. After chopping sideways near the 50,800 area early in the session, Dow futures broke down cleanly and ground toward the 50,500 region by the premarket, slipping off highs near 51,000. There was no panic to it, just a steady one-directional leak that left Stochastic RSI buried near the floor of its range, deeply oversold. That kind of read can spring a relief bounce, but a market this heavy rarely finds buyers until it stops printing lower highs. Until futures reclaim the 50,800 shelf, the path of least resistance points lower, with the round 50,000 handle the obvious magnet if 50,500 gives way.

Oil is doing the talking

The piece the equity crowd keeps glossing over is Crude Oil. US strikes in southern Iran early Tuesday, framed as self-defense during the ceasefire, did little to calm the energy market. West Texas Intermediate (WTI) slipped around 2% toward $93 a barrel even as Brent pushed roughly 4% higher to near $100, the kind of split that screams waterborne supply risk rather than a market convinced the fighting is over. With Brent back at triple digits and Oil still trading well above its early-year levels, the disinflation story that powered last week's gains is on thin ice. The Dow, with its heavier tilt toward economically sensitive names, tends to feel that squeeze faster than a tech-led index does.

Thursday's PCE is the only number that matters

This is where the rally's optimism runs into the data. A month ago the market saw essentially no chance of the Federal Reserve (Fed) hiking in July. Now, per the CME Group's FedWatch tool, traders are pricing around a 13% chance of exactly that. Easing bets have not just faded, they have flipped direction, and with crude firm and price pressures looking increasingly entrenched, Thursday's Personal Consumption Expenditures Price Index (PCE) release at 12:30 GMT is the week's pivot point. Core PCE is seen ticking up to 3.3% YoY with the headline rate expected to accelerate toward 3.8%, and a hot print would hand the hawks the ammunition the futures market is already bracing for.

For now the bias stays lower while the Dow trades below the 50,800 reclaim level, with 50,500 the line in the sand and 50,000 the next downside target. A break back above 50,800 would neutralize the bearish tilt and put the highs near 51,000 back in play, but that is a tall order with PCE looming and the rest of the market already priced for perfection. The S&P 500 and Nasdaq can keep chasing records on chip euphoria. The Dow, and the rate-hike odds creeping up beneath it, are flashing a different signal, and one of them is going to be wrong.

Dow Jones 5-minute chart