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The US dollar index temporarily holds the 100 mark, and US bonds have all emerged from a V-shaped market!

Post time: 2025-05-20 views

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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: The US dollar index temporarily holds the 100 mark, and US bonds have all emerged from the V-shaped market!". Hope it will be helpful to you! The original content is as follows:

On May 20, early trading in the Asian market on Monday, Beijing time, the US dollar index hovered around 100.56. On Monday, the US dollar index fell sharply during the Asian and European sessions due to Moody's downgrade of the U.S. credit rating, and once fell nearly 100 mark during the session, but recovered some of the lost ground in the US session and finally closed down 0.62% to 100.37. U.S. Treasury yields across the board were all out of the V-shaped market, with the benchmark 10-year U.S. Treasury yields closed at 4.454%; and the two-year U.S. Treasury yields more sensitive to monetary policy closed at 3.979%. Spot gold fluctuated higher, approaching the $3,250 mark many times during the session, but failed to stand here and finally closed up 0.88% to $3,230.40 per ounce. Spot silver finally closed up 0.24% at $32.33 per ounce. Due to signs that the US nuclear negotiations with Iran seem to have broken down, the two oils rose slightly, WTI crude oil fell first and then rose, and rushed above $62 during the US session, finally closing up 0.3% to $62.05 per barrel; Brent crude oil closed up 0.05% to $64.93 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 100.56. The market responded plainly to news that Trump announced the resumption of ceasefire negotiations between Russia and Ukraine. As Fed officials remain cautious and call for more clarity before pledging policy changes, the U.S. dollar index has struggled to find upward action energy. Technically, the dollar was sold off after Moody's downgrade and was skeptical of U.S. trade and debt policies. Break below 100 could fall further to 99.80 as investor confidence in U.S. fiscal management continues to be eroded.

The US dollar index temporarily holds the 100 mark, and US bonds have all emerged from a V-shaped market!(图1)

Euro: As of press time, the euro/dollar hovers around 1.1220. The EUR/USD tested highs on Monday, slightly falling after briefly drifting to the 1.1300 mark, although the pair overall ended trading on the day at a higher price. However, the euro is still trapped in a short-term consolidation range. This week, Fed officials actively worked hard to manage market expectations for potential rate cuts. Fed policymakers continue to remind investors that U.S. tariffs and trade policies complicate domestic economic forecasts, thus affecting policy interest rate adjustments. Technically, the EUR/USD surged above 50-SMA around 1.1210, and then slightly fell back to 1.1238. The RSI was 56.44, reflecting the bullish momentum, supported by general weakness in the U.S. dollar after Moody's credit rating downgrade. Market suspicion of U.S. trade policy has exacerbated bearish sentiment towards the dollar. However, the resistance level near 1.1250 further limits the upward space. The strength of the euro highlights investors' shift from the dollar to the dollar as safe-haven appeal is questioned.

The US dollar index temporarily holds the 100 mark, and US bonds have all emerged from a V-shaped market!(图2)

GBP: As of press time, GBP/USD is hovering around 1.3346. The GBP/USD rose at the start of the new trading week, briefly testing the second 1.3400 mark in two weeks. Despite a bullish push in early pound buying, buyers failed to lock in new highs and prices fell back to a more stable 1.3350. The latest UK Consumer Price Index (CPI) inflation data is scheduled to be released on Wednesday and is expected to rise significantly on both monthly and annualized basis. ?Technically, the GBP/USD climbed to 1.3354 after breaking through 50SMA (1.3282), and the RSI was 59.66, showing moderate bullish pressure. The pound benefited from the dollar's decline after Moody's downgrade and trade policy uncertainty. The UK's new EU trade framework also supported the pound. While buyers push toward April highs, consolidation may occur unless clearer U.S. policy improves. The recent decline in the US dollar has opened up short-term upside for the pound.

The US dollar index temporarily holds the 100 mark, and US bonds have all emerged from a V-shaped market!(图3)

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Tuesday, gold trading around 3220.29. The market is looking forward to the Russian-Ukraine ceasefire after Trump and Putin's call on Monday, and concerns about the geopolitical situation have cooled down. Fed officials' speeches are hawkish, suppressing the Fed's expectations of a rate cut this year. This trading day will usher in the RBA interest rate resolution, and the market generally expects the RBA to cut interest rates by 25 basis points to 3.85%;In addition, the G7 Finance Ministers and the Governors' Meeting was held, and investors need to pay attention to it by May 22. U.S. President Trump will also participate in Congress on Tuesday's discussion of his comprehensive tax cut bill, as Republicans only hold a slim majority in the House of Representatives and will personally supervise the army to avoid misses in a key vote later this week. Investors need to pay attention.

The US dollar index temporarily holds the 100 mark, and US bonds have all emerged from a V-shaped market!(图4)

Technical: Technically, it can be seen in the daily chart that the gold price eventually fell back to the main trend line, and the buyer entered the market here, laying out the risk point below the trend line, hoping that the gold price will rise again and hit a historical high. On the short side, if the price falls below the trend line, the target may be lower than the 2960 line. In the 4-hour chart, gold prices can be seen rebounding strongly near the trend line, and buying continues to push the price to a key resistance level around 3260. The seller intervenes in this resistance zone and expects the gold price to pull back near the trend line; while the buyer hopes that the price can break through the 3260 resistance to continue the rise and challenge the downward trend line around 3360 above.

2) Analysis of crude oil market trends

On Tuesday, crude oil trading around 62.10, domestic crude oil futures prices fluctuated slightly on Monday. The high-level economic and trade talks between China and the United States have made substantial progress and reached important consensus, and international oil prices have continued to rise. The global tariff war is gradually eased, and global oil demand has hope of recovery. Oil giant Saudi Aramco expects oil demand to remain resilient this year and will rise further if global trade disputes are successfully resolved. Pessimistic expectations of oversupply under the background of accelerated production growth of OPEC+, coupled with the promotion of geopolitical risks in negotiations between Russia, Ukraine and the United States, limiting the increase in oil prices. According to EIA data, as of May 9, the operating rate of US refinery rose by 1.2% month-on-month, continuing the recovery trend after maintenance season, higher than the average level in the same period in the past five years, driving a month-on-month increase of 330,000 barrels per day.

The US dollar index temporarily holds the 100 mark, and US bonds have all emerged from a V-shaped market!(图5)

Technical: Technically, given the weak inventory and economic indicators of some economies around the world, technical resistance suppresses the increase, and the short-term prospects of crude oil are relatively short. Traders need to pay attention to whether the price can hold the $60.00 support level; if it falls below this level, it may test $59.13 again.

Forex market trading reminder on May 20, 2025

To be determined G7 Finance Ministers and Central Bank Governors' meeting was held

09:00 One-year loan market quotation rate from China to May 20

12:30 Australia to May 20 RBA interest rate decision

13:30 RBA Chairman Brock held a press conference

14:00 Germany April PPI monthly rate

16:00 Eurozone's current account after seasonal adjustment in March

20:30 Canadian April CPI monthly rate

22:00 Eurozone's initial value in May Consumer Confidence Index

The next day, the Federal Reserve Mousalem delivered a speech

The next day, the New York crude oil futures completed the last on-site transaction

The next day, the next day, the US crude oil inventories from the week of May 16

The above content is about "[XM Foreign Exchange Market Analysis]: The US dollar index temporarily holds the 100 mark, and the US bonds have fully emerged from the V-shaped market!", which was carefully compiled and edited by the XM Foreign Exchange editor, I hope it will be helpful to your trading! Thanks for the support!

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