During the week of May 25–29, 2026, global financial markets were dominated by developments surrounding the U.S.-Iran negotiations to reopen the Strait of Hormuz. The diplomatic back-and-forth, including peace talks, missile strikes, ceasefire leaks, and ultimately the lifting of the naval blockade, drove significant volatility across asset classes [1]. The U.S. dollar posted a weekly loss, with the dollar index (DXY) breaking below key support at 104.00 and closing near 103.50, as risk sentiment shifted in favor of risk assets and safe havens [1].
Gold experienced a mid-week dip but recovered, closing at $2,375/oz after bouncing off support at $2,325/oz. Technical analysis suggests further upside for gold if geopolitical tensions return [1]. The S&P 500 extended its winning streak, breaking through resistance at 5,300 and closing above 5,350 for the first time since December 2023. The rally was attributed to easing geopolitical fears and positive earnings reports, with the uptrend intact and next resistance at 5,400 [1].
Crude oil (WTI) prices fell sharply, dropping below $75/barrel and testing support at $72.50. The unwinding of the war premium and easing supply concerns followed progress in the U.S.-Iran talks and the reopening of the Strait of Hormuz [1]. Meanwhile, the New Zealand dollar (NZD) surged after a hawkish surprise from the Reserve Bank of New Zealand, propelling NZD/USD to 0.6400 and breaking above the 200-day moving average. The pair is now targeting resistance at 0.6450, supported by bullish sentiment [1]. The Australian dollar (AUD) advanced to 0.6750, holding above key support at 0.6700, as traders shrugged off a soft inflation print and focused on broader risk-on sentiment [1].
Traders are advised to closely monitor headlines related to the U.S.-Iran deal, as any reversal could quickly restore volatility and risk aversion. Gold remains a favored hedge during periods of uncertainty, and technical indicators for both NZD/USD and AUD/USD suggest further upside if the global risk-on mood persists [1].
CONCLUSION
The reopening of the Strait of Hormuz and easing geopolitical tensions drove risk assets higher, with the S&P 500 and commodity currencies outperforming while crude oil and the U.S. dollar declined. Market sentiment remains bullish, but traders are cautioned to stay alert for any renewed instability in U.S.-Iran relations. The current risk-on environment could persist if diplomatic progress continues.