Forex Signals Brief May 27: Tariff Relief Lifts Sentiment, Watch the Gap in US Stock Market

Markets began the week on a mixed yet energetic note, driven by political developments, shifting currency dynamics, and standout performance

Written by: Skerdian Meta • Tuesday, May 27, 2025 • 3 min read

Quick overview

Markets opened the week with mixed signals, influenced by political developments and currency fluctuations.
The U.S. dollar recovered slightly after President Trump's decision to delay tariffs on EU goods, boosting risk sentiment.
Equity futures indicated a strong open for U.S. stock markets, while European equities rebounded amid easing trade tensions.
Bitcoin reached a new all-time high above $110,000, leading a cryptocurrency rally driven by concerns over U.S. debt sustainability.

Markets began the week on a mixed yet energetic note, driven by political developments, shifting currency dynamics, and standout performance in cryptocurrencies.

Dollar Recovers After Shaky Start

The U.S. dollar started the week on a soft footing, extending last week’s weakness during the early Asian session. However, it clawed back some losses after a key political catalyst: President Trump’s decision to delay a planned 50% tariff on European Union goods until July 9. This move, following a phone call with European Commission President Ursula von der Leyen, helped boost risk sentiment and offered temporary support to the greenback.

Still, details about the conversation remain vague, keeping markets on edge as the tariff threat lingers just weeks away.

Currency Moves Reflect Shifting Sentiment

The euro initially surged, with EUR/USD rising to around 1.1420 in Asian trading, before retracing to 1.1380 — still modestly higher on the day. Meanwhile, AUD/USD climbed to 0.6530 as buyers pushed above the key 0.6500 level, though it later eased back to 0.6505.

In contrast, the Japanese yen underperformed. USD/JPY rose 0.3% to near 143.40, continuing an unusual trend where the dollar strengthens against the yen even as U.S. Treasury yields decline. Analysts suggest the move may be driven by capital outflows from Japan amid a broader global risk rotation.

Equity Markets Set for a Bullish Reopen

Although U.S. stock exchanges were closed for the holiday, equity futures rallied by over 1%, suggesting a strong open in the next session. European equities are also staging a comeback after Friday’s losses, helped by easing trade tensions and improved investor confidence.

The improved tone in risk assets could help markets maintain momentum into month-end rebalancing later this week.

Today’s Market Updates

Investors will turn their attention to a fresh round of economic data. Japan is due to release its Bank of Japan Core CPI (YoY), while the U.S. will unveil durable goods orders and CB consumer confidence.

Expectations for U.S. durable goods orders are sharply negative: a -7.9% drop in headline orders, down from +7.5% in the prior reading. Core orders are forecast at -0.1%. Wells Fargo notes that the previous gains were largely fueled by a one-time surge in aircraft purchases. Stripping out transportation, the underlying trend remains weak — a concern for future capital spending.

Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD falling below 1.11, and stock markets continuing upward. The moves weren’t too big, but we opened 37 trading signals in total, finishing the week with 25 winning signals and 12 losing ones.

Gold Finds Fresh Demand Amid Dollar Swings

Gold saw renewed interest, rising from around $3,200 to test the $3,500 mark. While the precious metal struggled to break past that key resistance — a level last touched in April — the underlying sentiment remained supportive. Traders are watching closely to see if bullion can retest highs as demand for safety assets builds. Chart XAUUSD, D1, 2025.05.25 20:12 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

XAU/USD – Daily Chart

Dollar-Yen Breaks Norms Amid Shifting FX Dynamics

One of the week’s more notable currency developments was the unusual behavior of USD/JPY. Even as U.S. yields declined, the U.S. dollar appreciated against the yen. The pair rose from 143.40 to 144.31, suggesting a shift in traditional correlations—possibly due to capital flows away from Japan amid global risk rotation.

USD/JPY – Weekly Chart

Cryptocurrency Update

Bitcoin Leads Crypto Rally to Record Highs

Cryptocurrencies outshone traditional markets, with Bitcoin surging over 6% to hit a new all-time high above $110,000. This marks its fifth consecutive day of gains, driven by growing concerns about U.S. debt sustainability and broader geopolitical instability.

BTC/USD – Weekly chart

Ethereum Tests MAs after Rebound Following Pectra Upgrade

Ethereum also saw a notable rebound, rallying more than 20% from April’s lows. The recent launch of Ethereum’s “Pectra” upgrade — which enhances wallet integration and staking functions — has sparked renewed institutional interest and confidence among retail investors.

ETH/USD – Weekly Chart

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.