In the market outlook, Markets rally as oil prices retreat and the US dollar weakens on growing optimism over a possible US-Iran peace deal and easing geopolitical tensions. Get full report.

Market Outlook: USD Weakens, Oil Prices Slide, Stocks Rally on Growing US-Iran Peace Deal Optimism

TraderFactor Market Report: May 25,2026

Global markets are trading with a cautiously optimistic tone as investors react to improving sentiment surrounding a possible peace agreement between the United States and Iran. Reports suggesting progress in negotiations and the potential reopening of the Strait of Hormuz have reduced immediate fears around energy supply disruptions, triggering a pullback in crude oil prices and boosting appetite for equities and risk-sensitive assets.

The softer risk environment is also weighing on the US dollar as traders rotate into higher-yielding currencies and stocks. However, despite the positive tone, uncertainty remains elevated because negotiations are still ongoing and no final agreement has been confirmed. Markets remain highly sensitive to geopolitical headlines and central bank commentary later this week.

Support and Resitance Table

Market Analysis

Currencies/Forex

The forex market is seeing broad USD weakness as easing geopolitical fears reduce demand for safe-haven assets. Commodity-linked currencies and major European currencies are benefiting from improved risk sentiment while traders position ahead of upcoming inflation data and central bank speeches.

Rate expectations remain an important driver for forex markets this week, especially with upcoming speeches from Federal Reserve officials, the Bank of Japan, the RBNZ, and the SNB. Traders are closely monitoring any signs of policy divergence that could influence volatility across major pairs.

EURUSD

EURUSD continues pushing higher as dollar weakness supports bullish momentum. The pair is also benefiting from reduced demand for defensive USD positioning amid improving global sentiment.

Traders are watching whether the pair can sustain movement above the 1.1650 area as markets await further guidance from Federal Reserve speakers later this week.

GBPUSD

GBPUSD remains supported above key levels as investors rotate into risk-sensitive currencies. Sterling is also finding support from stable UK economic expectations ahead of Friday’s Bank of England-related commentary.

If risk sentiment remains positive, the pair could continue testing higher resistance zones in the near term.

NZDUSD

NZDUSD is gaining as traders favor higher-yielding currencies during the current risk-on mood. The pair may remain sensitive to upcoming RBNZ commentary and broader commodity sentiment.

Any hawkish tone from New Zealand policymakers could further support upside momentum for the kiwi.

AUDUSD

AUDUSD is strengthening ahead of Wednesday’s Australian CPI report. Inflation data will be important because it could influence expectations regarding future Reserve Bank of Australia policy decisions.

A stronger-than-expected CPI reading may boost speculation around tighter monetary policy and support additional gains in the Australian dollar.

USDCAD

USDCAD is weakening as oil prices retreat and the broader US dollar softens. However, the pair remains sensitive to both crude oil volatility and Friday’s Canadian GDP report.

Stronger Canadian growth data could add further downside pressure to the pair later in the week.

USDJPY

USDJPY is easing slightly as the dollar weakens, although yield differentials continue limiting downside pressure. Traders are paying close attention to upcoming comments from Bank of Japan officials.

Any indication that the BOJ could gradually adjust monetary policy may increase volatility in yen pairs.

USDCHF

USDCHF remains under pressure as safe-haven demand for the US dollar declines. The pair may remain highly reactive to both geopolitical headlines and Thursday’s SNB Chairman speech.

Markets will be looking for clues regarding future Swiss monetary policy direction and inflation expectations.

Crypto/Bitcoin

Bitcoin is recovering alongside broader market optimism as investors rotate back into risk assets. Improved sentiment across equities and softer dollar conditions are helping support crypto demand.

However, crypto markets remain volatile and highly sensitive to both macroeconomic headlines and changes in overall risk appetite.

Gold

Gold prices are stabilizing after recent volatility as easing geopolitical concerns reduce aggressive safe-haven demand. The softer US dollar is helping limit downside pressure in the precious metals market.

Traders are now focused on upcoming US inflation data and Federal Reserve commentary, which could influence expectations around interest rates and real yields.

Stocks/Equities

Global equity markets are trading higher as investors welcome signs of easing geopolitical tensions and lower oil prices. Technology and growth stocks are leading gains as inflation fears temporarily cool.

NAS100

The NAS100 remains supported by strong risk appetite and continued investor demand for growth-focused technology stocks.

US30

The US30 is benefiting from improving economic sentiment and reduced fears surrounding energy-driven inflation pressures.

SP500

The SP500 continues advancing as traders rotate back into equities amid expectations that easing geopolitical risks could support broader market stability.

Geopolitics

Markets remain focused on developments surrounding US-Iran negotiations. Recent reports suggest both sides are signaling progress toward a possible agreement, although major issues are still under discussion.

US Secretary of State Marco Rubio stated that President Trump is “not going to make a bad deal” with Iran, while Trump reportedly instructed negotiators not to rush negotiations. Meanwhile, Iranian officials suggested that a proposed peace deal could lead to the reopening of the Strait of Hormuz, a major global oil shipping route.

These developments have significantly reduced immediate supply concerns in the oil market, helping push crude prices to two-week lows. Nevertheless, uncertainty remains elevated because negotiations are incomplete and geopolitical risks could quickly return.

Economic Calendar

Market activity is relatively quiet today as both the United States and several European markets observe Memorial Day bank holidays, leading to lighter trading volumes and reduced institutional participation. With no major economic releases scheduled today or Tuesday, traders are largely focusing on geopolitical developments and positioning ahead of a much busier second half of the week.

Attention will gradually shift toward inflation data, central bank speeches, and monetary policy guidance from major economies including Australia, Japan, New Zealand, Switzerland, the Eurozone, the United Kingdom, Canada, and the United States. These events could significantly influence forex volatility and broader market sentiment in the coming sessions.

Wednesday — Australia CPI, BOJ and RBNZ Speeches, FOMC Commentary

Australia’s CPI report will be closely watched because inflation data directly influences Reserve Bank of Australia policy expectations and AUD volatility.

Markets will also monitor speeches from the Bank of Japan and RBNZ Governors for guidance regarding interest rates, inflation outlooks, and future monetary policy direction. In the United States, several FOMC members are expected to speak, which could influence expectations surrounding future Federal Reserve rate decisions.

Thursday — SNB Speech and US PCE Inflation Data

The SNB Chairman’s speech will be important for CHF traders as markets search for hawkish or dovish signals regarding Swiss interest rates and inflation policy.

In the US, the Core PCE Price Index remains the key inflation indicator for the Federal Reserve. Stronger inflation data could support the US dollar and revive expectations for tighter monetary policy.

Friday — Tokyo CPI, German Preliminary CPI, UK and Canada Events

Tokyo CPI data provides an early indication of inflation trends in Japan and may influence expectations surrounding future BOJ policy changes.

Germany’s Preliminary CPI is important for euro traders because it provides insight into broader Eurozone inflation pressures and ECB policy expectations.

Markets will also watch Britain’s government-related economic commentary and Canada’s GDP report, both of which could influence GBP and CAD volatility respectively. Additional speeches from Federal Reserve officials may further shape USD sentiment into the weekly close.

Final Outlook

Markets are currently pricing in optimism surrounding a possible US-Iran peace agreement, supporting equities while pressuring oil prices and the US dollar. The reopening of the Strait of Hormuz would significantly ease global supply concerns and reduce inflation fears tied to energy markets.

However, traders should remain cautious because negotiations remain unresolved and headline-driven volatility could quickly return. Central bank commentary and inflation data later this week may also create sharp market reactions across forex, commodities, and equities.

Current Market Bias

📉 USD — Bearish
📉 Oil — Bearish
📈 Equities — Bullish
📈 EURUSD — Bullish
📈 GBPUSD — Bullish
📈 AUDUSD — Bullish
📈 NZDUSD — Bullish
📉 USDCAD — Bearish
📉 USDCHF — Bearish
📉 USDJPY — Mildly Bearish
📈 Bitcoin — Bullish
📈 Gold — Neutral to Bullish

Author Details:

Phyllis Wangui
Senior Market Analyst, TraderFactor

Phyllis Wangui is a seasoned financial markets analyst with over a decade of experience in forex and CFD brokerage evaluation. Specializing in regulatory compliance and risk assessment, she leads the TraderFactor reviews team in delivering transparent, data-driven broker breakdowns that help retail traders navigate complex offshore and Tier-1 trading environments.

Reviewed by Alex Kanyi

Head of Compliance | TraderFactor

“This report is for general information only. Trading involves significant risk. Seek independent advice before acting on any content.”

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 Last Updated: May 2026

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