The US Housing Price Index dropped unexpectedly in April, falling by 0.4% compared to a predicted growth of 0.1%. This decline points to a potential slowdown in the housing market during that time. The EUR/USD pair remained strong, hovering near 2025 highs of about 1.1640, thanks to hopes for peace in the Middle East. In contrast, the USD/JPY pair saw the Yen strengthen, dropping roughly 300 pips from its weekly peak. If it falls below 144.50, it could decline even further.

Gold Market Overview

Gold prices stabilized around $3,310, briefly dipping below $3,300. Market optimism about easing Middle East tensions contributed to this stability, and comments from Fed Chair Powell helped boost market sentiment. In the world of cryptocurrency, traders are returning to the top three coins, signaling the possible end of the altcoin season. Rising tensions with Iran have also raised concerns about the potential closure of the Strait of Hormuz, which could affect oil prices as regional conflicts escalate. The unexpected drop in the US Housing Price Index for April, recorded at -0.4% instead of the slight 0.1% increase expected, indicates a possible temporary dip in the housing market. This raises questions about the impact of higher borrowing costs. It may challenge the strength of mortgage-driven spending in the upcoming quarters.

Currency Market Analysis

For currency traders, the performance of EUR/USD near 2025 highs offers some insights. Its strength around the 1.1640 mark shows renewed interest in the euro, driven by reducing geopolitical worries, particularly in the Middle East. We should closely watch the markets, especially with changing European interest rate expectations. The lack of renewed dollar strength allows for selective long positions within a tight range—assuming tensions continue to ease. The Yen’s recent gain, illustrated by a significant 300-point drop in USD/JPY, might still continue. If it breaks below the 144.50 support level, there could be a short-term decline for the pair, especially with safe haven demand increasing. This situation requires careful monitoring. The repeated failure to regain recent highs is attracting more momentum sellers, with stop-loss orders building up beneath 144.50. If those levels break, a larger correction could be on the horizon. Gold remains close to $3,310 after a brief dip below $3,300. Its stability, despite improving market sentiment about conflict zones, indicates ongoing hedging behavior. Powell’s comments earlier in the week, which avoided any hawkish surprises, likely prevented further drops in gold prices. There’s potential for tight consolidation here, as traders may be waiting for clearer inflation signals before making strong moves. In the digital asset market, attention appears to be shifting back to major cryptocurrencies like Bitcoin, Ethereum, and close contenders, moving away from fringe altcoins. This indicates that recent speculative enthusiasm for lower-tier tokens might be fading. This shift is significant, showing that market sentiment is becoming more disciplined, possibly due to tightening liquidity or exhaustion from unsupported rallies. At the same time, rising tensions with Iran could impact commodity-linked currencies and energy assets. Concerns about the possible closure of the Strait of Hormuz, which handles a fifth of the world’s oil supply, could lead to short-term volatility ahead of a typically turbulent month. Although nothing concrete has been disrupted yet, the risk premium is already influencing trading decisions. We will be monitoring closely to see if this premium affects options pricing and spread differences in Brent-linked derivatives as we approach the next news cycle. Create your live VT Markets account and start trading now.

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