Is the Worst of the Energy Shock Over? (05.21.2026)

Global markets took their direction from US–Iran negotiations, with hopes for a breakthrough easing concerns over Strait of Hormuz disruptions and pulling oil prices lower.

The move brought some relief to inflation expectations.

The policy picture remains mixed. Higher energy costs keep the ECB on a restrictive path, softer UK data has reduced expectations for further BOE tightening, and uncertainty remains over whether the Fed has one more rate increase left.

Technology stocks gained ground, while gold and silver held firm amid lingering uncertainty. In currencies, the yen found support from intervention speculation, while the euro remained pressured by weak growth across the Eurozone.

Europe’s Growth Problem Takes Over

The euro slipped below 1.16 as weak growth figures and expensive energy imports weighed on sentiment across the region. First-quarter GDP expanded just 0.1%, while inflation reached its highest level since 2023, keeping the ECB under pressure to maintain a restrictive stance.

With PMI surveys approaching, the next clue for the euro may come from whether business activity shows signs of stabilization or further slowdown.

For EUR/USD, the initial resistance is seen at 1.1660, while the closest support is positioned at 1.1550.

A Pause in the Precious Metals Battle

Gold remained above the $4,500 mark as signs of progress in US-Iran talks eased pressure across energy markets. Lower oil prices helped calm inflation concerns, reducing the urgency behind further monetary tightening. Even so, uncertainty surrounding the Fed’s next move kept buyers and sellers locked in a wait-and-see battle.

First resistance is seen at $4550, with initial support near $4400.

Export Strength Gives the Yen a Lift

The yen strengthened beyond 159 per dollar as softer oil prices and a weaker dollar improved demand for the Japanese currency. Optimism surrounding possible progress between Washington and Tehran raised hopes that disruptions in the Strait of Hormuz could ease, while strong export figures added support.

Despite the recovery, the 160 level remains firmly on the radar due to the possibility of official intervention.

Initial resistance stands at 160.00, while the first support is located at 158.20.

Inflation Relief Changes the Conversation

Sterling traded just below 1.34 after inflation slowed to 2.8% in April, coming in below forecasts following the introduction of a new energy price cap.

Labour market data also pointed to softer conditions, with unemployment moving higher and wage growth losing pace. The combination prompted a reassessment of how much further the Bank of England may tighten policy this year.

From a technical view, resistance stands near 1.3430, with support around 1.3340.

Silver Finds Some Breathing Room

Silver held above $75 as improving sentiment surrounding US-Iran relations helped steady commodity markets. Lower oil prices eased concerns about inflation and reduced pressure for additional rate increases, creating a more supportive backdrop for metals.

The outlook, however, remains closely tied to future signals from the Federal Reserve.

From a technical view, resistance stands near $75.70 while support is located around $72.50.