Pips for Breakfast: May 31, 2026

Washington is currently trying to decide if a naval blockade is a negotiation tactic or a formal invitation to a global supply chain crisis.

On This Day

In 2018, the US announced steel and aluminum tariffs on its closest allies. Markets realized that "special relationship" was a relative term when USD/CAD jumped 100 pips in a single session. Nothing says friendship like a 25% tax on metal.

The Play

The week ahead is all about the Risk-Off Gap: With Trump and the Situation Room failing to reach a finalized deal with Iran, we expect the Asian open this evening to be defensive. The play is to look for a Long USD/CAD entry if oil prices react poorly to the "slow" lift of blockades mentioned by Bessent. If the "Sell in May" crowd decides to exit their equity positions before the month ends tomorrow, Short AUD/USD is the seasonal favorite. The Aussie is the market's favorite punching bag when trade tensions rise, and tonight looks like a heavy bag session.

What's on Deck

FOMC Member Powell (20:30 UTC): Jerome Powell is speaking tonight just as the Asian session gets moving. He usually tries to be boring, but the market has a talent for finding drama in his pauses. Watch for any shift in rate hike expectations after a volatile week.

Iran Headlines: Keep your news terminal close when markets open this evening. Any official word from Baghaei or the White House regarding the "slow" blockade lift will move the needle on the US Dollar immediately.

Asian Open (17:00 EST): This is the first chance for the market to price in the weekend's lack of diplomatic progress. Expect volatility in the Yen crosses as safe-haven flows start to trickle in.

The Data Behind the Patterns View Packages →

Quick Pips

EUR/USD: The pair is flirting with key support levels. If Powell sounds even slightly hawkish tonight, the Euro might find itself looking for a floor that isn't there.

USD/JPY: Historically, when geopolitics get messy, the Yen gets busy. If the Iran deal continues to stall, we expect a move back toward 155.00.

Gold: It's not a currency, but it's acting like one. The yellow metal is the primary beneficiary of "Situation Room" headlines. It's the ultimate hedge for when nobody can agree on a deal.

Why Your P&L Cares

History likes to repeat itself because traders have short memories and algorithms have none at all. The 2018 tariff tantrum proved that when the US starts talking about blockades and trade barriers, the Dollar tends to vacuum up all the liquidity in the room.

We are ending May with the "Sell in May" adage looking less like a cliché and more like a warning. Historical patterns suggest that equity weakness in late May often triggers a flight to the greenback. When you combine that seasonal trend with the current geopolitical stalemate, the path of least resistance for the US Dollar seems to be higher as we head into June.

The Bottom Line

The markets open tonight, and Jerome Powell is the opening act. Between naval blockades and stalled deals, there's enough volatility to keep your margin calls interesting. Go get some pips. You're fed.