Geopolitical Flashpoints and FOMC Anxiety Rattle Global Markets

Market Summary

Markets were cautious on Tuesday as investors weighed geopolitical tensions and central bank uncertainties. The U.S. dollar weakened ahead of the highly anticipated FOMC decision, with expectations for no rate change that were already priced-in in the market. However, concerns over renewed friction between President Trump and Fed Chair Powell added an additional layer of policy risk, raising questions about the Fed’s independence.

Gold prices edged lower as optimism surrounding upcoming U.S.-China trade talks in Switzerland prompted investors to trim safe-haven exposure. Still, ongoing geopolitical tensions — including Israeli strikes in Yemen, unresolved U.S.-Iran nuclear negotiations, and rising India-Pakistan and India-Palestine strains — continued to provide underlying support, keeping gold relatively resilient ahead of the FOMC decision.

U.S. equities drifted lower, with sentiment pressured by geopolitical instability and a lack of progress in the U.S.-China trade talks. Global risk appetite remained subdued as markets awaited clarity from the Fed. In Asia, investor mood turned defensive on rising regional tensions, while European markets were broadly flat.

Oil prices firmed, with WTI trading near $60 as stalled nuclear talks between the U.S. and Iran highlighted the risk of prolonged supply disruptions. With Washington demanding full dismantlement of Iran’s program—an outcome seen as unlikely—investors braced for further volatility ahead of the next scheduled round of talks on May 11.

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Current rate hike bets on 7th May Fed interest rate decision: 

0 bps (92.3%) VS -25 bps (7.7%)

Source: CME Fedwatch Tool

Market Overview

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar Index continued to slip despite expectations that the Federal Reserve will hold interest rates steady later today. Traders are closely looking for any signal from Chair Jerome Powell regarding future policy shifts. Previous dovish comments requiring “more evidence” to tighten policy had even drawn criticism from President Trump, signaling tensions between fiscal and monetary policy outlooks. Risks remain high for dollar holders ahead of the Fed statement.

The Dollar Index is trading lower following retracement from the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 40, suggesting the index might extend its losses since the RSI stays below the midline. 

Resistance level: 100.00, 102.65

Support level: 96.00, 92.15

XAU/USD, H4

Gold prices retreated modestly as renewed optimism over U.S.-China trade talks—slated to resume in Switzerland later this week—dampened immediate demand for safe-haven assets. Investors temporarily trimmed gold exposure in hopes of progress in trade negotiations. However, downside in gold remains limited as geopolitical tensions continue to simmer. Pakistan has accused India of significantly restricting the Chenab River’s flow, stoking fears of regional instability after a deadly incident in Kashmir.

Gold prices are trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is at 49, suggesting the commodity might extend its losses since the RSI retreated sharply from overbought territory. 

Resistance levels: 3430.00, 3480.00

Support levels: 3285.00, 3220.00

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GBP/USD，H4

The British pound is under pressure after failing to retest recent highs, with technical signals pointing to waning bullish momentum and the potential for a trend reversal. The dovish outlook surrounding the Bank of England, which is set to announce its policy decision tomorrow, has weighed on the Pound Sterling. Meanwhile, the U.S. dollar is gaining traction as trade negotiations between China and the U.S. commence in Switzerland this week—an event seen as reducing global trade uncertainty and bolstering demand for the greenback. The shifting macro narrative could tilt GBP/USD lower in the near term.

GBP/USD showed an easing in bullish momentum as the MACD dipped below the zero line after it flowed in a lower-high pattern. The RSI, on the other hand, hovered around the 50 level, which indicated a neutral signal for the pair. 

Resistance level:   1.3420, 1.3535

Support level: 1.3290, 1.3160

NZD/USD, H4

The New Zealand dollar weakened as markets priced in further rate cuts from the RBNZ following its recent policy move. Weaker-than-expected domestic employment figures and signs of cooling wage growth have reinforced those bets, even as inflation remains within target. However, the USD remains under pressure limited losses experienced by NZD/USD as traders await clarity from Chair Powell. While the Fed is expected to hold rates steady, markets are watching for any shift in tone that could validate further dollar downside. 

NZD/USD faced resistance near recent highs and showed signs of rejection, suggesting a potential pullback.The RSI dropped after nearing the overbought region, indicating weakening bullish momentum. Meanwhile, the MACD is showing signs of a potential bearish crossover near the zero line, hinting that the upward move may be losing steam.

Resistance level: 0.6020, 0.6080

Support level: 0.5945, 0.5895

NASDAQ, H4: 

U.S. equity markets edged lower as investors de-risked their portfolios amid global tensions. President Trump stated that China is open to negotiations but gave no timeline or urgency for a deal. Hopes for a breakthrough rose briefly after he teased a “very, very big announcement,” but they quickly faded when he clarified it might not relate to trade. The lack of clarity continues to weigh on market confidence.

Nasdaq is trading lower following the prior retracement from the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 59, suggesting the index might extend its losses since the RSI retreated from overbought territory.  

Resistance level: 20250.00, 20255.00

Support level: 19110.00, 17645.00

AUD/USD, H4: 

The Australian dollar climbed to its highest level of 2025, signaling a bullish bias for the currency pair. The advance was driven by renewed policy easing from the People’s Bank of China, which cut both its benchmark interest rate and reserve requirement ratio in a bid to cushion the economy against escalating tariff pressures from the Trump administration. The move is seen as a proactive effort to stimulate domestic growth, and with Australia’s economic fortunes closely tied to China’s, the policy shift has provided strong tailwinds for the Aussie. A continued pickup in Chinese activity could further propel AUD/USD to fresh highs.

The pair is hovering at its recent high levels after breaking above its weeks-long ranging bound, suggesting a bullish bias. The RSI is hovering close to the overbought zone, while the MACD shows signs of rebounding from above the zero line, suggesting that the pair remains trading with bullish momentum. 

Resistance level: 0.6540, 0.6600

Support level: 0.6450, 0.6368

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Crude Oil, H4

Oil prices rebounded as U.S.-Iran nuclear talks faltered. President Trump has demanded complete dismantlement of Tehran’s nuclear program, a condition Iran is unlikely to accept. If talks collapse, the U.S. may reimpose or expand sanctions, threatening global supply. This risk of supply disruption has provided fresh support to oil markets. The next critical round of talks is scheduled for May 11—investors are advised to stay alert for developments.

Oil prices are trading higher following the prior rebound from the support level. MACD has illustrated diminishing bearish momentum, while RSI is at 42, suggesting the commodity might extend its gains since the RSI rebounded from oversold territory. 

Resistance levels: 65.05, 72.10

Support levels: 55.80, 41.60