US stock market don open with strong optimism today, but other assets no dey follow the joy. While equities dey rise and catch up to the previous session futures rally, currency and commodity markets remain cautious about unresolved issues for the latest diplomatic talks.
The overall geopolitical outlook appear positive, as both sides don agree to reopen the Strait of Hormuz for the next 30 days and work toward a longer-term peace process within 60 days. Still, final agreement dey prove difficult.
Reports show that Iranian negotiators remain stuck on key issues, especially the release of frozen funds and where Tehran enriched nuclear stockpiles go go. Ongoing diplomatic tensions dey cause quick shift for commodities, leading to rebound for crude oil prices, especially Brent.
The continued geopolitical risks and concerns about inflation dey give strong support to the US Dollar, the subject of this morning analysis. Current session FX performance don show that even though hopes for peace dey push risk assets to new highs, the US Dollar remain strong, going against the broader trend.
We go look at the Dollar Index, EUR/USD, and GBP/USD to see how recent peace flows don already impact the FX market and where to look next. Dollar Index 4H chart for May 26, 2026 show that bulls dey push price action above the 4H 50-period MA, pointing to potential test of the upper bound of the range. With RSI momentum also picking up, the setup look more bullish for the US Dollar.
GBP/USD 4H chart for May 28, 2026 show that with price currently retracing back toward the pivot zone, the action dey more mixed than fully bearish. Any close above the 200-MA go add further bullish momentum.
EUR/USD 4H chart for May 26, 2026 show that EUR/USD dey reject its 4H 50-period MA, with RSI momentum also turning bearish, pointing to more downside ahead.
The USD dey modestly higher to start the US session reversing some of the declines from the moves during the holiday session yesterday. Today, US bond markets don open after the hiatus from trading yesterday due to Memorial Day holiday, and the yields dey lower but the USD no dey react with a move lower with perhaps some counter progress toward peace the cause of the apprehension.
More specifically, the Iran-US negotiations remain alive, but Iran continue to send mixed signals wey dey make any peace agreement difficult. While negotiators dey still discuss a temporary framework deal centered on a 60-day ceasefire, reopening the Strait of Hormuz, and possible sanctions relief, Iran simultaneously continue actions and demands wey dey undermine confidence for the talks.
The biggest issue remain Iran refusal to fully give ground on its enriched uranium stockpile. Iran continue to insist that enriched uranium remain under Iranian control, while the US dey demand either destruction of the material or strict international oversight. Iran also tie broader regional demands into the talks, including linking any agreement to ceasefire conditions involving Lebanon and Hezbollah.
At the same time, Hezbollah attacks and Israeli retaliatory strikes for Lebanon continue overnight, adding more instability to negotiations. Yesterday, President Trump add another levels of complexity to the region by suggesting the middle eastern countries all come together under the Abraham Accord as well.
The Abraham Accords na series of agreements first signed for 2020 wey normalize diplomatic relations between Israel and several Arab nations, including United Arab Emirates, Bahrain, Morocco, and Sudan. The deals were brokered by the United States during President Trump first term. The accords were considered historic because they mark the first major normalization agreements between Israel and Arab states for decades.
President Trump dey now try to expand the Abraham Accords further by encouraging additional countries like Saudi Arabia, Qatar, Pakistan, Turkey, Egypt, and Jordan to formally normalize relations with Israel as part of a broader Middle East peace framework.
Despite some positive overtures toward peace, military tensions also escalate again overnight. The US carry out additional self-defense strikes on Iranian missile sites and mine-laying vessels after alleged threats to shipping routes and US forces near the Strait of Hormuz. Iran then claim say e shoot down a US drone and warn of retaliation for any further violations.
So while diplomacy dey still move forward incrementally, Iran continued military activity, tougher negotiating demands, and links to Hezbollah dey keep markets cautious and prevent confidence say a final peace deal dey close. This morning President Trump post ‘Peace through Strength’. I no sure this dey go anywhere.
US futures dey trade higher with the Dow trading at record levels up 325 points for pre-market trading. The Nasdaq dey up about 300 points from Friday 26343 close putting am near the highest closing levels on record at 26635. The S&P dey trading up 52 points wey go put am near 7520 at the open and above the record high close at 7501 from last week trading.
Technically, looking at the 3 major currency pairs: The EUR/USD trade above and below its falling 200 hour MA yesterday and dey do the same today. The market dey consolidate awaiting the next shove. That failure to push lower help shift the bias back to the upside. The 200-hour MA still remain a key downside target and go need to be broken to increase the bearish bias for the pair. However, as the North American session dey get underway, the price dey once again test that key support zone. A move back above that level go help shift the bias back for the buyers.
