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USD/JPY gains traction on US-Iran peace progress

  • USD/JPY loses ground to near 158.85 in Monday’s Asian session. 
  • US inches toward Iran peace deal.  
  • Markets expect a June BoJ rate hike despite softer-than-expected Japan CPI inflation data. 

The USD/JPY pair edges lower to around 158.85, snapping the two-day winning streak during the Asian trading hours on Monday. The US Dollar (USD) weakens against the Japanese Yen (JPY) amid signs of a US-Iran deal to reopen the Strait of Hormuz. 

US President Donald Trump said on Sunday that Washington and Iran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of ‌Hormuz, per Reuters.

“Markets have become conditioned to be incredibly patient on a tangible breakthrough, but the base case of a deal remains firm, with the weekend news providing further conviction, even if the timing remains unclear,” said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne.

A lack of clarity over when the critical waterway would open kept enthusiasm in check. Trump stated that the US blockade in the Strait of Hormuz “will remain in full force and effect until an agreement is reached, certified, and signed.”

Japan’s National Consumer Price Index (CPI) rose by 1.4% YoY in April, compared to 1.5% in March. Meanwhile, core CPI inflation eased to a four-year low of 1.4% YoY during the same period. The data is among the factors the Bank of Japan (BOJ) will scrutinize at June’s policy meeting, where the board is widely expected to raise its short-term policy rate to 1.0% from 0.75%.

Analysts see inflation accelerating in the coming months, as elevated oil costs and supply disruptions caused by the Middle East conflict prompt firms to raise prices for a broad range of products. 

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GBP/USD gains ground above 1.3450 on US–Iran progress

  • GBP/USD drifts higher to around 1.3480 in Monday’s early Asian session. 
  • The prospect of a deal to end the Iran war buoyed risk appetite, supporting the British Pound. 
  • UK Retail Sales ‌fell by the most in nearly a year in April. 

The GBP/USD pair gains traction to near 1.3480 during the early Asian session on Monday. The US Dollar (USD) weakens against the British Pound (GBP) as the United States (US) and Iran signal peace progress. Trading volumes are expected to be light due to a market closure for Memorial Day in the US. 

Senior US officials said on Sunday that Washington and Tehran are closing in on a deal that would reopen the Strait of Hormuz, even as US President Donald Trump said he won’t “rush” into an agreement, per Bloomberg. Signs of progress in the US-Iran peace deal could provide some support to the riskier asset, such as the GBP against the USD in the near term. 

Nonetheless, the threat of renewed war with Iran “still looms large” as Trump still leaves open the opportunity to launch military strikes. The US President stated that the US blockade in the Strait of Hormuz “will remain in full force and effect until an agreement is reached, certified, and signed.”

Softer UK Retail Sales data, along with an unexpected rise in the Unemployment Rate to 5.0%, has prompted traders to scale back expectations for future Bank of England (BoE) rate hikes by December. This, in turn, might cap the upside for the Cable. BoE policymaker Alan Taylor said that an “extended hold” is likely sufficient, adding that second-round inflationary impacts are less severe than those seen during the 2022 Russia-Ukraine invasion due to a cooling domestic jobs market.  

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AUD/USD Price Flirts with 200-SMA on H4, just above mid-0.7100s amid weaker USD

  • AUD/USD kicks off the new week on a positive note as US-Iran deal hopes weigh on the USD.
  • Bets for a rate hike by the Fed in 2026 could limit deeper USD losses and cap gains for the pair.
  • The technical setup warrants some caution before positioning for a further appreciating move.

The AUD/USD pair opens with a modest bullish gap at the start of a new week and sticks to intraday gains above mid-0.7100s through the Asian session. The latest optimism over a potential US-Iran peace deal undermines the safe-haven US Dollar (USD) and assists spot prices to move away from the lowest level since April 14, touched last week.

However, the US and Iran remained at odds over key issues, including blockades on the Strait of Hormuz and Tehran’s nuclear program, keeping a lid on the market optimism. This, along with bets that the US Federal Reserve (Fed) will hike interest rates by the end of this year, should help limit deeper USD losses and cap further gains for the AUD/USD pair.

From a technical perspective, spot prices now seem to have found acceptance above the 38.2% Fibonacci retracement level of the recent corrective pullback from the vicinity of the highest level since June 2022, touched earlier this month. Bulls now await a move beyond the 200-period Simple Moving Average (SMA) on the 4-hour chart before placing fresh bets.

Meanwhile, a mildly positive Relative Strength Index near 58 and a gently positive Moving Average Convergence Divergence (MACD) suggest upside momentum is building. However, price action remains finely balanced, making it prudent to wait for some follow-through buying beyond this key moving average before positioning for any further appreciation.

The subsequent move up is likely to confront immediate resistance at the 50.0% retracement near 0.7175, which is followed by the 61.8% level at 0.7197, with higher hurdles seen at 0.7230 and 0.7270. On the downside, a break below the 38.2% retracement at 0.7152 would expose the 23.6% level at 0.7124, ahead of the stronger structural support around 0.7079.

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

AUD/USD 4-hour chart

Chart Analysis AUD/USD

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.

USDEURGBPJPYCADAUDNZDCHF
USD-0.31%-0.36%-0.21%-0.13%-0.46%-0.44%-0.31%
EUR0.31%-0.06%0.11%0.17%-0.16%-0.13%-0.02%
GBP0.36%0.06%0.17%0.23%-0.11%-0.06%0.03%
JPY0.21%-0.11%-0.17%0.08%-0.29%-0.26%-0.16%
CAD0.13%-0.17%-0.23%-0.08%-0.35%-0.32%-0.22%
AUD0.46%0.16%0.11%0.29%0.35%0.03%0.14%
NZD0.44%0.13%0.06%0.26%0.32%-0.03%0.10%
CHF0.31%0.02%-0.03%0.16%0.22%-0.14%-0.10%

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).

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EUR/JPY Price Tests 185.00 barrier near descending channel top

  • EUR/JPY could test the immediate resistance at the upper boundary of the channel around 185.10.
  • The 14-day Relative Strength Index sits near 50, hinting at neutral but stabilizing momentum.
  • The initial support appears at the 50-day EMA of 184.85.

EUR/JPY extends its gains for the second successive day, trading around 184.90 during the Asian hours on Monday. The pair is holding a mild bullish bias as it consolidates above both the nine-day and 50-day Exponential Moving Averages (EMAs), which cluster just below price around the mid-184s and reinforce a nearby demand zone.

Moreover, the 14-day Relative Strength Index (RSI) sits close to the 50 line, hinting at neutral but stabilizing momentum that could allow the cross to extend gains while it remains supported by these short- and medium-term trend gauges.

However, the technical analysis of the daily chart indicates the EUR/JPY cross is still moving sideways within a descending channel pattern, indicating an ongoing bearish bias. A sustained break above the channel would offer a bearish confirmation.

The immediate resistance lies at the upper boundary of the channel around 185.10. Further advances would support the EUR/JPY cross to explore the region around the all-time high of 187.95, which was recorded on April 17.

The immediate support lies at the 50-day EMA of 184.85, followed by the nine-day EMA at 184.79. A break below these moving averages would put downward pressure on the EUR/JPY cross to navigate the region around the three-month low of 181.87, recorded on March 16, followed by a five-month low of 180.81, which was reached on February 12.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart

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

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.35%-0.40%-0.27%-0.17%-0.59%-0.51%-0.36%
EUR0.35%-0.06%0.07%0.16%-0.27%-0.17%-0.03%
GBP0.40%0.06%0.15%0.22%-0.20%-0.11%0.02%
JPY0.27%-0.07%-0.15%0.09%-0.37%-0.29%-0.16%
CAD0.17%-0.16%-0.22%-0.09%-0.43%-0.35%-0.23%
AUD0.59%0.27%0.20%0.37%0.43%0.08%0.21%
NZD0.51%0.17%0.11%0.29%0.35%-0.08%0.12%
CHF0.36%0.03%-0.02%0.16%0.23%-0.21%-0.12%

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).

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EUR/USD Price Trades near 1.1650 as bulls look to extends gains above 23.6% Fibo.

  • EUR/USD kicks off the new week on a positive note as US-Iran peace deal hopes undermine the USD.
  • Bets for an interest rate hike by the Fed in 2026 could help limit deeper USD losses and cap spot prices.
  • Acceptance above the 23.6% Fibo. backs the case for a further intraday appreciating move for the pair.

The EUR/USD pair opens with a bullish gap at the start of a new week as renewed optimism over a potential US-Iran peace deal weighs heavily on the safe-haven US Dollar (USD). Spot prices climb back closer to mid-1.1600s during the Asian session, though the broader setup warrants some caution before positioning for an extension of a modest recovery from the lowest level since April 7, around the 1.1575 region, touched last Thursday.

From a technical perspective, the EUR/USD pair is holding above the 23.6% Fibonacci retracement of the April-May downfall. Adding to this, the Relative Strength Index (RSI) is around 58 and a slightly positive Moving Average Convergence Divergence (MACD) reading hints at improving momentum. This, in turn, backs the case for a further intraday appreciating move, though hawkish US Federal Reserve (Fed) bets could limit USD losses and cap spot prices.

Hence, any subsequent move up is more likely to confront an immediate hurdle near the 38.2% Fibo. level, around the 1.1675-1.1680 region. This is followed by the 1.1710 confluence, comprising the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 50% retracement. The said area should keep the near-term bias capped, above which the EUR/USD pair could target the 61.8% level around 1.1740 and the 78.6% retracement at 1.1785 en route to the cycle high at 1.1842.

On the downside, immediate support is located at the 23.6% retracement at 1.1638, with a deeper floor at the Fibonacci structural anchor around 1.1574, where a break would reopen the broader bearish phase.

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

EUR/USD 4-hour chart

Chart Analysis EUR/USD

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.

USDEURGBPJPYCADAUDNZDCHF
USD-0.32%-0.37%-0.25%-0.16%-0.57%-0.46%-0.35%
EUR0.32%-0.06%0.07%0.14%-0.26%-0.15%-0.03%
GBP0.37%0.06%0.13%0.20%-0.21%-0.08%0.02%
JPY0.25%-0.07%-0.13%0.08%-0.36%-0.26%-0.15%
CAD0.16%-0.14%-0.20%-0.08%-0.42%-0.32%-0.21%
AUD0.57%0.26%0.21%0.36%0.42%0.11%0.22%
NZD0.46%0.15%0.08%0.26%0.32%-0.11%0.10%
CHF0.35%0.03%-0.02%0.15%0.21%-0.22%-0.10%

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).

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Swiss Franc advances as risk-on mood weakens USD

  • USD/CHF falls as fading safe-haven demand weakens the US Dollar amid growing optimism over a potential US-Iran agreement.
  • The US and Iran are reportedly close to signing an agreement involving a 60-day ceasefire extension.
  • SNB’s Martin Schlegel stated the central bank remains highly willing to intervene in foreign exchange markets if necessary.

USD/CHF extends its losing streak for the fourth consecutive day, trading around 0.7820 during the Asian hours on Monday. The pair depreciates as the US Dollar (USD) declines on fading safe-haven demand amid increasing optimism over a potential US-Iran agreement, which has eased broader market concerns about inflation and impending Federal Reserve (Fed) interest rate hikes.

According to an Axios report citing a US official, the United States (US) and Iran are close to signing an agreement that involves a 60-day ceasefire extension. Under this proposed deal, the Strait of Hormuz would be reopened, and Iran would agree to clear mines it deployed in the waterway while allowing ships to pass freely. In exchange for these actions, the United States would lift its current blockade on Iranian ports.

However, the downside of the Greenback could be restrained amid rising inflationary pressures, which have shifted the Fed expectation toward potential future interest rate hikes rather than cuts. Markets are currently pricing in a 45.1% probability that the Fed will raise interest rates by 25 basis points by year-end, according to the CME FedWatch tool.

Meanwhile, investors are continuing to assess the future outlook for Federal Reserve policy. This caution comes after Federal Reserve Governor Christopher Waller signaled that he no longer believes the central bank should retain an easing bias in its official policy statement, adding another layer of complexity to the global economic landscape.

Swiss National Bank (SNB) Vice Chairman Martin Schlegel stated last week that the central bank maintains an elevated willingness to intervene in foreign exchange markets if necessary. Schlegel also noted that Swiss inflation currently remains within the central bank’s price stability range. These remarks signal that policymakers continue to monitor both price developments and currency conditions closely.

Meanwhile, traders are seeking fresh cues regarding whether the Swiss National Bank will call for an exit from its dovish monetary policy stance. This heightened scrutiny comes as rising global inflationary pressures persist, driven largely by elevated international oil prices.

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Yen Strengthens as Oil and Dollar Weaken

The Japanese yen appreciated past 159 per dollar on Monday, rebounding from three-week lows as declining oil prices and a softer US dollar supported the currency amid signs that the US and Iran were moving closer to a deal that could reopen the Strait of Hormuz. A full reopening of the key shipping route would offer relief to major Asian economies heavily reliant on Middle Eastern oil imports. Meanwhile, data released last week showed Japan’s core inflation rate slowed to a four-year low in April, reducing pressure on the Bank of Japan to tighten monetary policy in the near term. Even so, the central bank could still consider raising rates as Japan’s economy continues to show resilience. Separately, traders remained cautious about the possibility of currency intervention, with the yen still trading near the 160-per-dollar level that reportedly prompted Tokyo’s intervention efforts in late April and early May.

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Offshore Yuan Rises to Multi-Year High

The offshore yuan strengthened to around 6.78 per dollar on Monday, reaching its strongest level since February 2023, as the greenback weakened amid signs of a diplomatic breakthrough in the Middle East. Over the weekend, a senior US official said that Washington and Tehran are edging closer to a deal that could reopen the Strait of Hormuz. However, President Donald Trump stressed that he would not “rush” into an agreement, while Iranian officials warned that the draft could still collapse. Meanwhile, Chinese President Xi Jinping is reportedly set to visit North Korea as early as this week or in early June, following his recent hosting of Presidents Donald Trump and Vladimir Putin within the span of a week. On the domestic front, investors are also turning their attention to China’s upcoming PMI data releases later this week, which are expected to offer fresh clues on the health of the economy following recent signs of slowing momentum in industrial output and retail sales.