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Japanese Yen Resists Trade Tensions and BoJ Rate Hike Bets; USD/JPY Fails Below 140

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  • April 22, 2025
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The Japanese Yen strengthened against the US Dollar on Tuesday, fueled by safe-haven demand due to ongoing global trade tensions and increasingly expected Bank of Japan (BoJ) interest rate hike later in 2025. The USD/JPY pair tried to bounce off levels below 140, the bullish bias on the Yen intact as geopolitical uncertainty and differential monetary policy expectations between the BoJ and the Fed continue to place pressure on the Dollar. Market sentiment was further rattled by concerns over the Fed’s independence following fresh criticism from former President Donald Trump, keeping USD gains limited. Investors now await key US economic data and global PMI releases for clearer market direction. KEY LOOKOUTS • Growing market confidence that the Bank of Japan will raise interest rates again in 2025 is expected to keep the Japanese Yen supported in the near term. • Uncertainty regarding the direction of Federal Reserve policy, stoked by political pressure and rate cut speculation in the markets, continues to influence the US Dollar. • Investors are monitoring progress in the latest US-Japan tariff negotiations, particularly comments by influential officials and possible implications for currency flows. • The Richmond Manufacturing Index and world flash PMIs should deliver new insights into economic well-being, driving near-term USD/JPY price action. Japanese Yen remains in focus as investors weigh safe-haven demand against shifting central bank policies and global trade tensions. Despite a modest intraday pullback, the Yen’s strength is underpinned by rising expectations that the Bank of Japan will raise interest rates in 2025, marking a significant divergence from the Federal Reserve’s anticipated rate-cutting path. While this, in turn, is being affected by political uncertainty in the U.S. — fueled by renewed skepticism about the independence of the Fed and continuing trade negotiations — the recovery of the Dollar remains curbed. The market now expects major U.S. economic releases and world PMI reading, which should provide clearer guidance for the USD/JPY pair in upcoming sessions. Japanese Yen remains strong as safe-haven demand and expectations of BoJ rate hikes provide support against a softer US Dollar. Uncertainty surrounding US-Japan trade talks and skepticism regarding the Fed’s policy framework remain weighing factors on sentiment. Investors now look to leading economic indicators for new direction on USD/JPY action. • The Yen remains in demand with global trade tensions and geopolitical uncertainty capping its losses versus the US Dollar. • Speculation in the markets for a Bank of Japan rate increase in 2025 is contributing to the bullishness in the Yen. • The pair rebounded more than 40 pips from around the pivotal 140.00 psychological level but failed to maintain firmness amidst bearish sentiment in the USD. • New political attacks on the Federal Reserve, such as threats against its autonomy, have maintained the Dollar on defensive levels close to multi-year lows. •  Japanese and American official quotes underpin the subtlety in current tariff negotiations, holding back investors. •  USD/JPY encounters strong resistance at 141.65-141.60 and has the vital support zones at 140.45 and 140.00. •  Upcoming events such as Richmond Manufacturing Index and global flash PMIs are to determine USD/JPY’s next decisive movement. Japanese Yen continues to find support in its safe-haven demand, with continuing global trade tensions and geopolitical risks holding investor sentiment in check. Market observers continue to be focused on the status of U.S.-Japan trade negotiations, especially after Japanese officials noted the intricacy involved in securing an agreement given touchy topics such as tariffs on autos and agriculture. As the talks proceed, the Yen will probably continue to be a favored destination for investors seeking stability amid uncertain times. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView Substantiating the Yen’s support is also the increasing market perception that the Bank of Japan might hike interest rates in 2025, a significant reversal after years of extremely accommodative monetary policy. Conversely, the U.S. Dollar is under siege as political uncertainty regarding the independence of the Federal Reserve and conflicting economic signals create doubts about the direction of U.S. monetary policy. This policy difference between the United States and Japan remains to influence currency market dynamics and reflects the cautious sentiment among traders. TECHNICAL ANALYSIS USD/JPY pair indicates signs of stabilization following a bounce back from the sub-140.00 psychological level, which has now become a significant support point. The 140.45 area, where the pair had recently established a multi-month low, is likely to provide initial downside cushioning. But the general bearish tone is still in place as far as the pair remains below the 141.60–141.65 resistance area — an important horizontal level that had served as support. A break above this region on a sustained basis may initiate a short-covering rally, paving the way for additional advances to the 142.00 and 142.35 resistance areas. To its detriment, a break below 140.45 could leave the pair vulnerable to further losses, potentially testing the yearly swing low around the 139.60–139.55 area. FORECAST USD/JPY pair is able to stay above the 140.45 support level and accumulates sufficient bullish strength, it may try to retest the immediate resistance in the 141.60–141.65 area. A decisive break and sustained strength above this area can pave the way for a short-covering rally, driving the pair towards the psychological 142.00 mark. Additional bullish extension may drive the pair to test the next major hurdle around the 142.35–142.40 area, where sellers are likely to reappear. Conversely, however, if the USD/JPY pair is unable to hold its ground above the 140.45 level, bear pressure may strengthen, pulling the pair back towards the important 140.00 psychological level. A clean break beneath this support level would most probably speed up the downside move, targeting the 2024 yearly swing low at the 139.60–139.55 region. A break below this level may warn of a deeper bear trend and possibly trigger further selling in the near term.

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AUD/USD Currencies

AUD/USD Slumps Close to 0.6300 in Face of Growing Risk Aversion and US Tariff Fears

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  • March 21, 2025
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The AUD/USD has fallen towards the 0.6300 level as risk aversion increases following increased concerns regarding US tariff policy, increasing the demand for safe-haven currencies like the US Dollar. The Australian Dollar is still on the back foot due to soft domestic jobs data, which is making traders revalue the Reserve Bank of Australia’s monetary policy perspective. As US bond yields fall as investors flock to Treasuries for safety, Fed Chair Jerome Powell conceded the difficulty in assessing the wider inflationary effects of tariffs even as he minimized their near-term impact. Cautious market sentiment prevails as economic uncertainties and changing central bank expectations remain at the helm of currency fluctuations. KEY LOOKOUTS • Safe-haven demand for the US Dollar could continue to weigh on AUD/USD amidst increasing geopolitical and economic uncertainty. • Market players closely monitor RBA’s policy, with lower jobs data fuelling speculation over possible rate reductions in the months ahead. • Future US releases of data, particularly inflation and employment, will be pivotal to influencing Fed policy expectations and USD direction. • Any intensification of US tariff news or overall risk sentiment would further fuel volatility and influence AUD/USD direction. The AUD/USD is still closely watched as several factors have been guiding its path. Increasing US Dollar demand amid surging risks aversion and US tariff policy concerns continues to press the key Australia Dollar. Meanwhile, weak Australian labor market statistics have prompted traders to re-evaluate the Reserve Bank of Australia’s policy tone, raising speculation of future rate cuts. Market players are also eyeing future US economic data, which might further affect Federal Reserve expectations and currency fluctuations. Changes in global sentiment or intensification of tensions relating to trade might contribute to volatility in the pair. AUD/USD remains around 0.6300 due to safe-haven demand pushing the US Dollar higher in light of increasing US tariff tensions. Downbeat Australian jobs data adds to the pressure, stoking speculation regarding future RBA rate cuts. Markets now look for major US economic indicators for guidance. • AUD/USD is trading around 0.6300, pressured by increasing risk aversion and increased US Dollar demand. • Safe-haven flows support USD, fueled by US tariff policy concerns and worldwide economic uncertainty. • US bond yields fall as investors turn to Treasuries for safety amid market and geopolitical uncertainty. • Fed Chair Powell minimizes inflation effect of tariffs, but admits difficulty in measuring broader economic impacts. • US Initial Jobless Claims increased to 223K, narrowly missing forecasts and contributing to risk-averse market sentiment. • Australian Dollar weakens after disappointing jobs data raise the alarm over the health of the labor market. • RBA policy outlook questioned, with markets speculating over future rate cuts despite the central bank’s conservatism. The Australian Dollar is facing pressure as global market sentiment shifts towards caution with increasing worries over US trade policies. Investors are now betting on the US Dollar as a safe-haven currency as anxiety rises about future economic shocks resulting from new tariffs from the US. This greater risk-aversion is fuelling currency market direction, and market participants watch closely for events in geopolitics and policy communications by large economies. Financial markets are more in defensive mood today, propelling demand towards defensive assets and impacting currency prices internationally. AUD/USD Daily Price Chart Chart Source: TradingView To this conservative mood comes the additional news of weaker-than-forecast employment figures from Australia. The unemployment rate having held steady, the fall in overall employment created renewed doubts about the vigor of the nation’s labor market. Consequently, market players are reviewing again the Reserve Bank of Australia’s policy path and more speculation about additional scope for cutting interest rates. Yet, the central bank has been cautious in tone, hinting at a cautious and data-driven policy in the next few months. TECHNICAL ANALYSIS AUD/USD is still under sustained bearish pressure, trading around the important psychological support level of 0.6300. The pair still trades below important moving averages, showing a consistent downtrend. Momentum indicators like the Relative Strength Index (RSI) also indicate a bearish bias, but not yet oversold, with scope for further decline. Any decisive break below 0.6300 could take the pair deeper into support levels, while any recovery attempt could be resisted around the 0.6350–0.6380 area. Traders are likely to observe these levels closely for possible breakout or reversal signals. FORECAST If sentiment in the market picks up and risk appetite comes back, AUD/USD may recover modestly. A recovery in global equities or a relief on US tariff concerns might dampen the safe-haven bid for the US Dollar, providing some relief to the Australian Dollar. Any surprise upside in Australian economic data or a more dovish tone from the Reserve Bank of Australia (RBA) could also induce a short-term rebound. In this case, the duo might try to retest resistance levels of 0.6350 and possibly 0.6380 if bullish sentiment gathers pace. On the bearish side, ongoing risk aversion and lingering worries about global trade tensions might keep AUD/USD under selling pressure. A strong US Dollar, supported by safe-haven flows and robust US economic data, might push the pair below the pivotal 0.6300 level. If this support is convincingly violated, subsequent falls toward 0.6250 or even 0.6200 cannot be discounted. Further, any subsequent indications of weakness in the labor market of Australia or dovish rhetoric from the RBA would bolster the bearish outlook for the Australian Dollar in the near term.

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AUD/USD Currencies

Australian Dollar Falls in Face of Trade Tensions and China Deflation Fears Amid Consumer Confidence Bounce

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  • March 11, 2025
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The Australian Dollar continues to fall against the US Dollar, burdened by rising global trade tensions and worsening deflationary fears in China—Australia’s biggest trading partner. Even with a big bounce in Westpac Consumer Confidence to a three-year high, fueled by recent interest rate reductions and softening living expenses, the AUD can’t find its footing. Stagnated US-China trade talks, counter-tariffs, and waning Chinese demand have weighed on sentiment, as weaker US employment data and fears of recession further clouded the wider picture. With investors expecting crucial inflation reads and other direction from central banks, the AUD/USD continues to be battered, trading around multi-week lows. KEY LOOKOUTS • Markets watch intently for the Reserve Bank of Australia’s next step, particularly after robust numbers trimmed expectations of further rate easing. • Continuing deadlock in US-China trade negotiations and fresh retaliatory tariffs continue to influence Australian market sentiment and global risk appetite. • Accelerating deflationary pressure in China is a significant threat to Australia’s export-oriented economy, particularly in the context of slowing consumer demand after Spring Festival. • Market participants are waiting for US inflation figures, which would potentially affect Federal Reserve policy expectations and propel short-term AUD/USD movements. The Australian Dollar continues to come under pressure as rising global trade tensions and China’s worsening deflation feed fears about Australia’s economic prospects. Amid a significant rise in consumer sentiment—reflected in Westpac’s Consumer Confidence Index hitting a three-year high—the external headwinds continue to dominate local optimism. The US-China trade impasse extended over time, joined by retaliatory tariffs and waning demand in China, has quashed investor sentiment and risk appetite. At the same time, technical indicators point to bearish momentum for AUD/USD, with investors looking for significant US inflation data and further information about the Reserve Bank of Australia’s monetary policy direction. The Australian Dollar remains under pressure even after consumer confidence rose, as global trade tensions and deflation concerns in China act as a dampener for sentiment. US-China negotiations’ stalemate and declining risk appetite keep the AUD/USD pair around multi-week lows. • Australian Dollar continues to be under pressure as a result of escalating global trade tensions and China’s increasing deflation worries. • Westpac Consumer Confidence jumped 4% in March, a three-year high, driven by interest rate reductions and softening living expenses. • US-China trade talks continue to be at an impasse, with retaliatory tariffs further weighing on market sentiment and affecting Australia’s export-oriented economy. • Deflation in China indicates poor domestic demand, which threatens Australian exports and general economic prospects. • Uncertainty around the US economy continues, with poor jobs numbers and recession worries driving global currency flows. • RBA remains cautious in its policy, and recent economic news has lowered the expectation of further rate cuts. • Market players wait for the next US inflation figures, which may influence future Federal Reserve policies and affect the AUD/USD exchange rate. The Australian Dollar is strained as global trade tensions escalate and economic uncertainty rises, driven particularly by increasing deflation fears in China—Australia’s biggest trading partner. While consumer sentiment improved significantly, with Westpac Consumer Confidence reaching a three-year high, overall market sentiment remains cautious. The Reserve Bank of Australia’s recent rate cut and alleviation of cost-of-living pressures have improved domestic optimism, but external threats continue to loom over local economic gains. AUD/USD Daily Price Chart Chart Source: TradingView Impeded US-China trade talks and retaliatory tariffs are driving fears of a weakening global demand, which directly affects Australia’s trade-dependent economy. In the background, political events and soft US job data are influencing expectations for future economic policy. As investors continue to keep an eye on future inflation data and central bank cues, the Australian Dollar’s performance will tend to be guided by these changing global dynamics. TECHNICAL ANALYSIS Australian Dollar is exhibiting signs of ongoing weakness versus the US Dollar, with the AUD/USD pair trading around significant support levels. The pair has fallen below the nine-day Exponential Moving Average (EMA), which signals bearish short-term momentum. Moreover, the 14-day Relative Strength Index (RSI) has dipped below the neutral 50 level, indicating mounting selling pressure. If the downtrend continues, the pair would test lower support levels, while recovery would demand a persistent break above the near-term resistance zones to turn sentiment again in the bullish direction. FORECAST In the event that global sentiment is improving and US-China trade tensions abate, the Australian Dollar would recover, particularly if China’s economic data begin to stabilize. A flip in commodity demand to the positive or an unexpected pick-up in China’s inflation rates can drive Australia’s export economy, potentially pushing the AUD higher. Furthermore, if the Reserve Bank of Australia continues its dovish but accommodative policy without additional rate cuts, this should reinforce investor confidence and support a modest recovery in the currency. But the risks on the downside are also considerable. Ongoing trade uncertainty, ongoing deflationary pressures in China, or additional escalation in global tariff tensions would bear down on the Australian Dollar. If future US inflation numbers bolster the argument for the Federal Reserve to keep or postpone rate cuts, the US Dollar could gain further traction, putting further pressure on the AUD. In addition, any fresh weakness in Australian economic data or a turn towards more dovish RBA commentary may speed the currency’s decline in the near term.

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Currencies

USD/CAD Remains Resilient Amid Trade Tensions and Political Uncertainty in Canada

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  • March 10, 2025
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The USD/CAD currency pair remains strong around the 1.4350 level, indicating an upside bias in the face of rising trade tensions and increasing political uncertainty in Canada. The Canadian Dollar is under pressure after China imposed a 100% tariff on major Canadian exports, escalating a wider trade war. In addition, speculation regarding an early federal election in Canada contributes to market uncertainty. While the US Dollar is being burdened with the fear of a possible economic downturn, increasing US Treasury yields provide some respite. With shifting global trade dynamics and unfolding political events, USD/CAD remains in focus for market players. KEY LOOKOUTS • China’s imposition of 100% tariff on Canadian exports can be a big burden for CAD, which could keep USD/CAD in bearish grip in the near future. • Increased speculation regarding an early federal election by PM Mark Carney could enhance volatility and investor risk aversion against the Canadian Dollar. • Albeit economic slowdown fears, increasing US Treasury yields could potentially cap downside pressure on the USD in the next few sessions. • Investors will be keenly observing how fresh US and China tariffs redefine North American trade flows and impact USD/CAD sentiment. The USD/CAD currency pair is charting a complicated course defined by increased trade tensions and political uncertainty. The Canadian Dollar is still on the back foot after China levied a 100% tariff on major Canadian exports, further heating up the ongoing trade war. Speculation surrounding an early federal election in Canada under Prime Minister Mark Carney further obscures the economic outlook. Simultaneously, the US Dollar is under pressure from fears of a possible slump in the US economy, although increasing Treasury yields are providing some support. As the world markets process these events, the USD/CAD pair remains steady around 1.4350, retaining its bullish bias. USD/CAD remains firm around 1.4350 as rising trade tensions and political instability in Canada counteract CAD weakness, while US economic worries limit Dollar strength. • USD/CAD is trading near 1.4350 with a bullish bias as global trade uncertainties and political instability in Canada keep the USD/CAD steady. • China slaps Canadian rapeseed oil, peas, and other goods with a 100% tariff, which fuels trade tensions. • Canadian Dollar is hampered by trade tensions against China and the US affecting investor morale. • Speculation intensifies over Canadian Prime Minister Mark Carney’s possible call for an early election in April or May 2025. • US Dollar softens slightly amid concerns of a US economy slowdown, capping bullish pressure. • Increasing US Treasury yields provide some support to the USD, albeit overall bearish pressure. • Markets remain vigilant in anticipation of the new tariffs effective on March 20, keeping a close eye on geopolitical and economic news. Trade tensions still hold center stage in the economic environment, particularly after China imposed a 100% tariff on a number of Canadian products such as rapeseed oil, peas, and pork. The action follows Canada’s previous tariff moves and has put more pressure on an already strained trade relationship. The move has put Canada’s trade prospects into question, with companies and investors responding to the possibility of affecting exports and the overall economy. These are among a wider global shift that is driven by protectionism, with nations reviewing their trade approach. USD/CAD Daily Price Chart Chart Source: TradingView With added uncertainty, political events in Canada have received more attention. There is speculation that Prime Minister Mark Carney will call an early federal election, potentially late April or early May, ahead of the scheduled October 2025 date. Such political maneuvers would carry high stakes for policy direction and investor sentiment. Conversely, there are also fears emerging about the prospects of the US economy’s growth, even though the economic fundamentals remain under close observation. Against this backdrop, market participants are closely monitoring both trade policies and political actions that may influence the economic environment over the next few months. TECHNICAL ANALYSIS  USD/CAD is showing a robust consolidation trend around the 1.4350–1.4360 level, which reflects a possible accumulation phase. The pair has sustained its bullish setup following recent advances, indicating that buyers remain dominant. Major support is seen at 1.4300, whereas near-term resistance is placed close to the 1.4400 level. A follow-through above this resistance may invite further upside strength, whereas a fall below support may herald a short-term setback. Overall, the pair’s consistent placement close to current highs indicates underlying interest in buying amidst current market uncertainties. FORECAST If trade tensions increasingly become more bearish on the Canadian Dollar, USD/CAD may further extend its climb in the future sessions. Breaking above the resistance level of 1.4400 can bring renewed bullish force, and this may push the pair to test higher levels. Moreover, even the slightest news of political turmoil in Canada, such as an announcement of holding an early election, can support further USD strength against the CAD. Rising US Treasury yields would also offer a basis for sustained upper bias in the pair. Conversely, if diplomatic talks between Canada and her trading partners signal ebbing tensions, the Canadian Dollar may gain stature, piling pressure on USD/CAD downwards. Further, if future US economic numbers indicate a more severe-than-anticipated slowdown, this may detract from investor morale in the US Dollar. A fall below the 1.4300 support level may initiate a corrective move towards lower levels, particularly if global sentiment turns risk-on or oil prices rise, which generally benefits the CAD.

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Currencies NZD/USD

NZD/USD Falls Close to 0.5700 as China’s Deflationary Pressures Hit Kiwi Sentiment

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  • March 10, 2025
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The NZD/USD currency pair fell close to the 0.5700 level in Monday’s Asian session, weighed down by worsening deflationary pressures in China. China’s Consumer Price Index (CPI) in February fell 0.7% year-over-year, the steepest decline since January 2024, fueling concerns over soft domestic demand in the world’s second-largest economy—New Zealand’s major trading partner. This has taken a heavy toll on the Kiwi. Yet, pair downside momentum can be curtailed by rising expectations of US interest rate cuts in light of weaker-than-expected Nonfarm Payrolls. The market waits now for Tuesday’s US CPI release for further cues on Fed policy and overall market direction. KEY LOOKOUTS • China’s sharper-than-expected decline in CPI signals weak domestic demand, adding pressure on the Kiwi from the strong trade links with China. • Markets await Tuesday’s US CPI data, which may impact Federal Reserve rate expectations and set the tone for NZD/USD action. • Soft US jobs data stokes rate cut speculation, which may cap USD strength and underpin a small NZD/USD rally. • International risk sentiment and geopolitics could affect safe-haven demand for USD, influencing near-term volatility in NZD/USD trading. The NZD/USD currency pair continues to be under pressure, trading close to the 0.5700 level in the wake of increasing deflationary pressures in China, New Zealand’s biggest trading partner. China’s CPI fall in February indicates poor consumer demand and puts additional bearish pressure on the Kiwi. Downside in the pair, however, may be capped as weaker US Nonfarm Payrolls data has reinforced expectations of future interest rate cuts by the Federal Reserve. Investors now look to Tuesday’s US CPI report, which will be instrumental in determining market sentiment and the short-term direction of the NZD/USD pair. NZD/USD hovers around 0.5700, weighed down by China’s worsening deflation and poor domestic demand. Downside is capped by weaker US jobs data, which enhances Fed rate cut hopes. All eyes now on Tuesday’s US CPI data for new direction. • NZD/USD quotes at 0.5700, weighed down by China’s emerging deflationary pressures. • China’s CPI dropped 0.7% in February, the largest fall since January 2024, indicating soft domestic demand. • New Zealand Dollar falls, as China is one of its key trading partners and economic slowdown dents Kiwi mood. • Soft US Nonfarm Payrolls data boosts expectations of several Fed interest rate cuts in 2024. • Fed policy direction continues to be prudent, with officials emphasizing caution and the requirement for data-driven decision-making. • US CPI releases on Tuesday are likely to be a major driver of the next direction in NZD/USD. • Market sentiment and global risk flows will continue to drive short-term currency pair movement. China’s increasing deflationary pressures have created new doubts about the strength of the world economy, particularly for nations such as New Zealand that enjoy strong trade relations with China. The steep drop in China’s Consumer Price Index (CPI) for February is an indicator of weak domestic consumption and weak household demand. As one of New Zealand’s largest export markets, any Chinese economic slowdown would tend to influence the Kiwi economy indirectly. Market players are becoming more cautious, observing how China’s domestic challenges may impact overall economic activity and global trade flows. NZD/USD Daily Price Chart Chart Source: TradingView Alternatively, the United States also has its own share of uncertainties, especially after the recent Nonfarm Payrolls reading indicated a moderation in job growth. This has promoted increasing speculation that the Federal Reserve will start cutting interest rates sooner rather than later. While policymakers have indicated a data-dependent policy, future economic indicators—particularly the US Consumer Price Index (CPI)—will have a crucial influence on forming expectations. These global macroeconomic trends are expected to drive investor sentiment and near-term policy choices in major economies. TECHNICAL ANALYSIS NZD/USD continues to come under bear pressure, trading near major support areas at the 0.5700 level. The pair has not been able to sustain buying momentum, reflecting that sellers still have the upper hand. A persistent break below this support level could pave the way for additional declines, but a bounce back above near-term resistance levels may reflect a potential change in mood. Traders will carefully observe price behavior around these major levels for reversal or breakout signals, particularly before high-impact economic releases such as the US CPI report. FORECAST If the coming economic data, specifically the US CPI, indicates softer inflation, this would reinforce expectations for Federal Reserve rate cuts and possibly weaken the US Dollar. This situation might present some upside potential for NZD/USD to recover to higher resistance levels. Moreover, any indication of policy stimulus or stabilization in China may enhance market sentiment for the Kiwi and present additional scope for recovery. Conversely, in the event that US inflation numbers turn higher than anticipated, this can temper expectations of premature rate reductions by the Fed, strengthening the US Dollar and putting additional pressure on NZD/USD. Additionally, ongoing deflationary indications and subdued Chinese domestic demand might further drain the New Zealand Dollar. In that scenario, the duo can find it difficult to stay above major support levels and might experience further falls in the near future.

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AUD/USD Currencies

AUD/USD Price Outlook: Bulls Target 0.6400 as Market Holds Breath for FOMC Minutes

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  • February 19, 2025
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The AUD/USD exchange rate is stable at a two-month high, trading above the mid-0.6300s, supported by a minor US Dollar weakening and the hawkish bias from the Reserve Bank of Australia (RBA). The technical landscape is bullish, with favorable momentum indicators pointing towards further gains. A move above 0.6400 would propel the pair to 0.6500 and higher, with the next level of support at 0.6330-0.6335. A continued fall below 0.6300 could leave AUD/USD vulnerable to more losses towards the 0.6200 area. Traders are now waiting for the FOMC minutes for new indications on US monetary policy, which may determine the next direction. KEY LOOKOUTS • A confident breakout above 0.6400 may add to gains towards 0.6500, aided by strong technical signals and optimistic sentiment. • This area continues to be an essential buying point, but a fall below 0.6300 may initiate a more severe correction to 0.6200. • USD volatility may be sparked by the release of FOMC minutes and could steer AUD/USD short-term direction based on interest rate projections. • The Reserve Bank of Australia’s inflation and monetary policy position might lend further support to AUD, maintaining the pair in a bullish trend. The AUD/USD currency pair remains in favor with investors as it trades just off a two-month high due to a softer US Dollar and the Reserve Bank of Australia’s hawkish bias. With optimism in tow, the pair continues in a bullish consolidation mode, which points to further upside if it can break above the 0.6400 resistance level. Market sentiment is closely watching the FOMC minutes coming out soon, which may pump new volatility into the USD and determine AUD/USD’s next direction. Meanwhile, support at key levels of 0.6330-0.6300 continues to be the level to watch, with a breakdown below this area potentially triggering a more substantial correction. The AUD/USD currency pair is strong close to a two-month high on the back of a softer US Dollar and a hawkish RBA outlook. A breakout above 0.6400 can propel further upside, while break-even support at 0.6330-0.6300 remains pivotal for bullish enthusiasm. Market players now expect the FOMC minutes for new directions in USD. • The pair is stable on the back of a softer USD and a hawkish Reserve Bank of Australia (RBA) policy. • Sellers look for volatility as the Federal Reserve policy backdrop may affect the USD and guide AUD/USD direction. • Bullish sentiment favors additional advances, with resistance at 0.6400 and upside potential to 0.6500. • The 0.6330-0.6300 area is robust support, with a breakdown raising the prospect of 0.6200 or lower. • Australia’s trade-based economy exposes AUD/USD to global demand and movements in commodity markets. • Equity market shifts and appetite for risk assets influence the AUD/USD trends. • Trade relationships, inflation readings, and economic growth factors remain significant in influencing the currency pair’s movement in the future. The AUD/USD pair is still in focus as investors turn their eyes to major economic events and policy perspectives. The Reserve Bank of Australia’s relatively hawkish stance has supported faith in the Australian Dollar, with markets expecting a consistent approach to monetary policy. Global economic trends, such as changes in inflation and employment trends, are meanwhile having a notable influence on market sentiment. The policy guidance of the US Federal Reserve is still a key driver, with market participants closely monitoring for hints on prospective rate changes that will affect currency flows. AUD/USD Daily Price Chart TradingView Prepared by ELLYANA Apart from central bank policies, more general economic metrics like trade relationships, commodity prices, and overall market risk appetite drive AUD/USD action. Australia’s high trade connection with China and its export-based economy tend to render the currency sensitive to international demand and geopolitical events. Further, investor attitudes toward risk assets also remain active, as moves in equity markets and commodity cycles influence currency positioning. With all this in motion, traders keep a keen eye on macroeconomic trends that will form the direction of AUD/USD’s future. TECHNICAL ANALYSIS AUD/USD is bullish, with the pair trading close to a two-month high and in a bullish consolidation mode. Favorable momentum indicators, such as oscillators on the daily chart, indicate that the trend of least resistance is to the higher side. A breakout above 0.6400 could open the doors for further upside, possibly to the 0.6500 psychological level. On the bearish side, important support is at 0.6330-0.6300, where buyers are expected to emerge. A prolonged dip below this level might portend a deeper correction, with additional support at 0.6200. Traders will be keen on price action, especially in reaction to macroeconomic developments and policy signals. FORECAST AUD/USD pair is set for additional upside as it is underpinned by a constructive market structure. A breakthrough above the 0.6400 resistance might propel additional gains, taking the pair towards the 0.6500 psychological level. If the momentum persists, the next significant target will be at 0.6555-0.6560, where the 200-day Simple Moving Average (SMA) and a major resistance area coincide. Bullish oscillators on the daily chart indicate that the buyers are in charge, and any pullbacks could be used as a buying opportunity. A continued rally can further reinforce the bullish mood, keeping AUD/USD on a rising path. On the negative side, major support is at 0.6330-0.6300, and a breakdown below this area may initiate a more severe correction. If bearish pressure mounts, the pair can fall to 0.6265, followed by the 0.6240-0.6235 area. A fall below 0.6200 would signal a change in sentiment, and AUD/USD would be susceptible to a fall to the 0.6145 area, which was a crucial support level in recent trading sessions. Traders need to be careful because volatility can pick up, particularly around significant economic releases and central bank announcements.

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Currencies EUR/USD

EUR/USD Steadies Near 1.0450 Amid Tariff Threats and FOMC Minutes Anticipation

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  • February 19, 2025
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EUR/USD trades near 1.0450 with mild gains in the Asian session, supported by a weaker US Dollar. However, market sentiment remains cautious as geopolitical tensions and tariff concerns could bolster the Greenback’s safe-haven appeal. US President Donald Trump’s suggestion of a 25% tariff on vehicle, chip, and drug imports creates uncertainty, while Ukraine President Zelenskiy rescheduling his visit to Saudi Arabia indicates continued geopolitical tensions. At the same time, the Euro is under pressure as the Eurozone ZEW Economic Sentiment Index fell short of expectations and rumors of successive ECB rate cuts hang over the currency. Investors shift their attention to the FOMC Minutes for more information on the Federal Reserve’s position regarding economic threats and monetary policy direction.  KEY LOOKOUTS • Investors eagerly look for the FOMC Minutes to learn about the Fed’s position on inflation, interest rates, and possible economic threats. • The suggested 25% tariffs on automobile, semiconductor, and pharmaceutical imports may fan trade tensions, tending to bolster the US Dollar as a safe-haven asset. • The Euro comes under pressure with the ZEW Economic Sentiment Index falling short of expectations and ECB rate cut rumors keeping pressure on the future path of the currency. • Tensions in Russia-Ukraine and the delayed Saudi Arabia trip by Zelenskiy keep markets guarded, which can influence risk mood and drive price action in EUR/USD. The EUR/USD currency pair continues to stay in the spotlight with the mixed trend of the currency market on global economic and political fronts. While a softer US Dollar gives the pair temporary boost, rising trade tensions with the imposition of tariffs by Trump on major imports can make the Greenback stronger, curbing the pair’s upside. Also contributing to volatility are geopolitical risks, including the Russia-Ukraine conflict and Zelenskiy’s diplomatic moves. Weaker-than-forecasted economic sentiment data and anticipation of several ECB rate cuts on the Euro side keep the investors guarded. As FOMC Minutes are due to be released, traders will look closely for any indications of upcoming US monetary policy, which can trigger large market movements. EUR/USD trades around 1.0450 as geopolitical uncertainty and trade tensions make investors remain on guard. Markets look forward to FOMC Minutes to gauge the Fed’s policy attitude. • The pair trades around 1.0450 with support from a weaker US Dollar but is resistant to geopolitical and trade tensions. • A 25% levy on auto, semiconductor, and pharmaceutical imports can heighten trade tensions and enhance the safe-haven status of the USD. • Market players seek indications on the policy orientation of the Fed, inflation prospects, and risk assessment of the economy. • The ZEW Economic Sentiment Index was lower than forecasted, placing added pressure on the Euro amid talk of ECB interest rate reductions. • Russia-Ukraine tensions and Zelenskiy’s delayed Saudi Arabia trip contribute to market uncertainty and risk sentiment swings. • Increasing wagers on three ECB rate reductions this year may further burden the strength of the Euro. • Market participants are cautious as significant economic indicators and geopolitical events may trigger large price movements in the EUR/USD currency pair. The global economy is presently defined by a combination of economic policy and geopolitical occurrences, with trade tensions being at the forefront. US President Donald Trump’s plan to impose a 25% tariff on automotive, semiconductor, and pharmaceutical imports has sent investors into a tizzy, as it may affect worldwide supply chains and international trade relationships. In the meantime, the geopolitical front is still unclear, with Ukraine’s President Volodymyr Zelenskiy delaying his visit to Saudi Arabia due to ongoing tensions with Russia. These advances build towards a hesitant market atmosphere wherein policymakers and businesses are observing intently the likely changes in trade policies and diplomacy. EUR/USD Daily Price Chart TradingView Prepared by ELLYANA Economic sentiment has been exhibiting divergent signs in the European space, with the Eurozone ZEW Economic Sentiment Index not meeting forecasts. This has fueled debate over the European Central Bank’s next course of action regarding monetary policy, with market players speculating over potential interest rate changes. While economic growth continues to be the focus, disruptions in global trade and changes in economic policies create an added layer of uncertainty. As crucial reports and policy announcements are revealed, companies and investors are seeking insight into long-term economic strategies that may affect global trade, investments, and financial stability. TECHNICAL ANALYSIS EUR/USD is trading around the 1.0450 level, with major resistance and support levels that may determine its next direction. The pair is testing a pivotal price area where a breakout above resistance can indicate further upward momentum, while a fall below support can confirm a bearish trend. Traders are monitoring moving averages and RSI levels closely to determine market sentiment, with volume trends suggesting potential volatility in the future. As the FOMC Minutes and geopolitical events drive market direction, technical indicators will be instrumental in determining short-term price action and key entry or exit points for traders. FORECAST EUR/USD is uncertain as several factors drive its possible movement. On the positive side, if the market responds favorably to the FOMC Minutes, reflecting a dovish or cautious approach by the Federal Reserve, the US Dollar may weaken, enabling EUR/USD to pick up pace. Also, any indication of economic strength from the Eurozone or easing of trade tensions would help support the Euro. If the pair is able to break through crucial resistance levels, it could create the opportunity for further gains, drawing in bullish sentiment. To the downside, fears of growing trade tensions, especially Trump’s suggested tariffs on significant imports, could make the US Dollar a safe-haven currency, subjecting EUR/USD to downward pressure. In addition, the Euro is still exposed to speculation regarding several ECB rate reductions this year, which would negatively impact investor sentiment. Should economic indicators for the Eurozone continue to fall short of forecasts, the pair may have trouble sustaining stability, and a breach below major support levels would be a sign of further potential decline. Traders will be keenly watching upcoming economic reports and geopolitical events

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Currencies NZD/USD

NZD/USD Price Outlook: Bullish Trend Remains Above 0.5700 Despite RBNZ Policy Change

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  • February 19, 2025
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The NZD/USD currency pair bounced back above 0.5700 after RBNZ Governor Adrian Orr’s speech and has continued with its bullish trend despite the central bank reducing the Official Cash Rate (OCR) by 50 basis points. The currency pair is still within an uptrend channel, with the 14-day RSI remaining above the 50 mark, which supports the positive outlook. Immediate support lies at the nine- and 14-day EMAs of 0.5695 and 0.5685, respectively, while resistance is seen at the 0.5790 level, aligning with the upper boundary of the channel. A break below 0.5650 could weaken the bullish bias, potentially pushing the pair toward its lowest level since October 2022 at 0.5516. KEY LOOKOUTS • NZD/USD encounters resistance at the top of the ascending channel at 0.5790, with a breakout likely taking the price to the two-month high of 0.5794. • Nine- and 14-day EMAs are nearest supports, and a breakdown below 0.5650 deters the bullish trend and augments downward pressure. • RBNZ’s 50 bps rate reduction and forecasts of more easing can steer NZD/USD’s path, altering investor sentiment and expectations of monetary policy. • The 14-day RSI is still above the 50 level, indicating ongoing bullish momentum, but a fall below this level could signal a possible trend reversal. The NZD/USD currency pair is still trading with a bullish bias, remaining above the critical 0.5700 level despite pressure from the RBNZ’s surprise rate cut. Governor Adrian Orr’s comments indicated further easing in the next few months, which could affect market sentiment and future price action. The pair is still in an uptrend channel, with the 14-day RSI upholding the positive direction. But a firm break below 0.5650 may change the bias to negative, leaving the pair vulnerable to more downside risks. Traders will keenly observe future economic data and central bank statements for additional directional signals. NZD/USD is bullish above 0.5700 on the back of an uptrending channel and RSI above 50. Break below 0.5650 may undermine momentum, turning the sentiment bearish. Market players look to RBNZ policy outlook and pivotal resistance at 0.5790 for the next cue.  • The pair is bullish despite RBNZ’s 50 bps interest rate cut, underpinned by technical indicators. • A surge above this level may drive NZD/USD to its new two-month high at 0.5794. • The nine-day EMA of 0.5695 and the 14-day EMA of 0.5685 are key support levels. • A fall below the lower boundary of the ascending channel at 0.5650 could see additional downward pressure. • The 14-day Relative Strength Index indicates ongoing bullish momentum unless it falls below this important threshold. • Governor Orr’s perspective on future rate reductions affects market sentiment and the pair’s long-term direction. • Traders need to watch for upcoming economic releases and central bank commentary for additional directional signals. The New Zealand dollar is still in the spotlight as traders respond to the Reserve Bank of New Zealand’s recent policy move. Governor Adrian Orr’s address brought attention to the central bank’s strategy for economic stability, with a focus on the requirement for prudent rate changes. The RBNZ lowering of the Official Cash Rate is its move to bolster growth under uncertainty globally. As inflation dynamics and jobs data become central in guiding policy, investors watch closely as these elements drive the country’s economic trajectory. NZD/USD Daily Price Chart TradingView Prepared by ELLYANA External forces such as trade conditions and global market dynamics aside from monetary policy also determine the New Zealand dollar’s performance. As global commodity demand changes and geopolitics plays out, the currency is also sensitive to wider economic movements. The overall market forces are also brought about by changes in investor mood, especially reacting to U.S. Federal Reserve policy and general global financial health. With continued progress in local and global economies, investors stay alert to the next set of data releases and policy changes. TECHNICAL ANALYSIS NZD/USD is bullish as the currency pair continues trading in an rising channel, reflective of consistent short-term upward motion. The 14-day Relative Strength Index (RSI) continues to maintain a position higher than the 50 mark, confirming the bearish sentiment. Furthermore, the currency pair stands above the nine- and 14-day Exponential Moving Averages (EMAs), further supporting strong support at the current short-term. Resistance is seen around the 0.5790 level, which is along the channel’s top line, and the major support levels are at 0.5695 and 0.5685. A strong break above resistance would drive the pair further up, and a break below support would suggest a change in market direction. FORECAST NZD/USD can continue to rise if the bullish momentum continues, with the next major resistance at 0.5790. A break above this level might propel the pair towards the latest two-month high of 0.5794, further sustaining the upbeat sentiment. The pair’s rally may be aided by positive economic news, risk taking in international markets, or any indication of less hawkish monetary policy from the U.S. Federal Reserve. If the buyers continue to have control, more gains towards the 0.5850 zone can be envisioned in the short term. To the downside, unless NZD/USD can hold above significant levels of support, a breakdown below 0.5650 would set the pair up for more declines. Changes in sentiment prompted by softer economic data or greater risk aversion would put downward pressure on the pair. NZD/USD would then probe lower support near 0.5516, its lowest print since October 2022. Any hawkish comments from the U.S. Federal Reserve or firmer demand for the U.S. dollar would drive the bearish move forward, and additional losses can be expected in the next few weeks.

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AUD/USD Currencies

Australian Dollar Remains Unchanged After RBA Rate Cut: Market Response and Future Projections

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  • February 18, 2025
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The Australian Dollar has remained unchanged after the Reserve Bank of Australia’s (RBA) equally expected move of reducing the Official Cash Rate by 25 basis points to 4.10%, its first rate cut in four years. Although RBA Governor Michele Bullock acknowledged the effect of high interest rates, she warned against presuming additional rate cuts. The AUD/USD currency pair was supported by a softer US Dollar, with downtrodden US retail sales and Federal Reserve officials being cautious on rate cuts. At the same time, the rise in US Treasury yields supported the US Dollar, making it tough for the Australian Dollar. The market sentiment remains centered around significant support and resistance levels, with AUD/USD supporting an uptrend channel, indicating a positive bias.  KEY LOOKOUTS • Governor Michele Bullock indicated doubt regarding additional rate cuts, with future economic data being pivotal in deciding the next step by the central bank. • Fed officials emphasize caution on rate cuts with inflation worries, with US economic data being pivotal in informing future monetary policy. • Increasing US Treasury yields may make the US Dollar stronger, potentially capping AUD/USD gains despite the Australian Dollar’s strength following the RBA decision. • The duo is bullish in an uptrend channel, testing resistance at 0.6400 while important support is close to the 14-day EMA at 0.6300. Australian Dollar stability after the RBA’s rate cut confirms the market’s expectation of the move, and traders are now looking to see what future policy steps are ahead. While RBA Governor Michele Bullock hinted at indecision about further reductions, US Federal Reserve officials stuck to a wait-and-see approach, pointing to ongoing inflation threats. Increases in US Treasury yields have underpinned the US Dollar, which has made headwinds for AUD/USD even in its bullish path within an upward channel. The Australian Dollar held firm following the RBA rate cut, with investors looking to policy cues in the future. The increase in US Treasury yields, on the other hand, supported the US Dollar and proved difficult for AUD/USD. • The Reserve Bank of Australia lowered its Official Cash Rate by 25 basis points to 4.10%, the first rate cut in four years. • The Australian Dollar did not react much since the rate cut decision had already been priced in by traders before the announcement. • Governor Michele Bullock highlighted that additional rate cuts are in doubt, mentioning robust employment and persistent inflation issues. • Higher US Treasury yields supported the US Dollar, placing downward pressure on AUD/USD even after its post-RBA bounce. • Fed officials flashed warning signals for rate cuts, citing inflation threats and calling for greater economic clarity. • AUD/USD is still in an uptrend channel, with important resistance at 0.6400 and firm support at 0.6300. • US retail sales figures, Federal Reserve actions, and China’s economic policy are still driving Australian Dollar market sentiment. The Australian Dollar stabilized after the Reserve Bank of Australia (RBA) as anticipated cut the Official Cash Rate by 25 basis points to 4.10%. RBA Governor Michele Bullock insisted that although high interest rates have touched the economy, it is still premature to speculate about more cuts in interest rates. The Australian “Big Four” banks of CBA, NAB, ANZ, and Westpac also followed by cutting their lending rates promptly. The most recent inflation figures reported a deceleration in price pressures as Trimmed Mean CPI increased 0.5% last quarter, down from the anticipated 0.6%. Non with standing this, the robust labor market and conservative RBA approach mean that another round of rate cuts is not certain, keeping market participants on their toes for subsequent economic releases. AUD/USD Daily Price Chart TradingView Prepared by ELLYANA At the same time, US Dollar found strength in increasing Treasury yields, curbing AUD/USD’s up potential. The Federal Reserve still holds back on reducing interest rates, with policymakers citing ongoing inflation threats and desiring greater certainty before altering monetary policy. The USD was dented by dismal US retail sales figures temporarily before AUD/USD could recover partially. Still, with the US Dollar Index (DXY) rallying and Treasury yields on the rise, the Australian Dollar has resistance around 0.6400. The pair currently is trading inside an upward trend channel, important support being in place at about 0.6300, making economic statistics in the pipeline as well as remarks by the central banks crucial to its immediate next direction. TECHNICAL ANALYSIS AUD/USD pair trades in an uptrend channel, signifying the overall market bullish tendency in the near term. The pair also received support around the nine-day Exponential Moving Average (EMA) of 0.6316 and the 14-day EMA of 0.6300. The Relative Strength Index (RSI) is still above the 50 mark, indicating positive momentum. The pair meets resistance on the upside around the top edge of the channel at 0.6390, with an important psychological level at 0.6400. A breach above the level would herald more gains, while a decline below the support line of approximately 0.6280 may suggest a reversal. Investors will be looking out for these key levels for indication of a trend breakdown or a breakout. FORECAST The Australian Dollar remains in a bullish bias as long as it continues to trade in its rising channel, with the next resistance being at 0.6390 and the critical psychological level of 0.6400. If the pair is able to break above 0.6400, this may set further upside momentum into play, the next target being at 0.6450. Supportive reasons for the upward movement are a soft US Dollar, which could come under stress if economic indicators indicate that the Federal Reserve might ease monetary policy ahead of time. Also, any indication of strength in the Australian economy, especially in labor market data or inflation management, could support the AUD and bring further advances. AUD/USD has critical support at 0.6316 (nine-day EMA) and 0.6300 (14-day EMA). A breakdown below these levels may drive the pair to 0.6280, which is the lower end of the ascending channel. In case of a further increase in selling pressure, the next key support is at

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Currencies GBP/USD

GBP/USD Falls Before UK Labor Market Figures: Most Important Factors Contributing to the Market Decline

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  • February 18, 2025
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GBP/USD has fallen around 1.2600 before important UK labor market figures, ending its five-day streak of gains. Traders expect an increase in unemployment and claimant count, which may weigh on the British Pound. UK PM Keir Starmer’s demand for a “US backstop” in a Ukraine peace agreement also brings geopolitical uncertainty. On the American side, the Dollar rallies on increasing Treasury yields and dovish Fed comments, with policymakers reiterating that inflation threats remain. From a technical point of view, GBP/USD is approaching major support at 1.2600, with additional selling potential if numbers are disappointing. Investors are closely watching UK job data and Fed policy cues for the next move. KEY LOOKOUTS • UK labor figures are awaited by traders, as the unemployment rate is predicted to increase to 4.5%, influencing GBP/USD. • UK PM Keir Starmer demands any peace agreement for Ukraine should come with a “US backstop” to prevent future Russian incursions. • Higher US Treasury yields and hawkish tone of Fed policymakers maintain the US Dollar strong, exerting pressure on GBP/USD. • Fed Governor Michelle Bowman cautions against ongoing inflation risks, proposing additional data should be seen before cuts in interest rates. GBP/USD comes under selling pressure, falling around 1.2600 as market participants look forward to pivotal UK labor market information. The anticipated increase in unemployment and claimant count might act as a drag on the British Pound. In the meantime, UK Prime Minister Keir Starmer stressed the importance of a “US backstop” in any peace deal for Ukraine to discourage further Russian aggression. Conversely, the US Dollar strengthens as Treasury yields rise, buoyed by dovish comments from Fed officials. Fed Governor Michelle Bowman cautioned that inflation risks remain, indicating that more clarity is required before rate cuts can be considered. These together form the near-term direction for GBP/USD. GBP/USD falls close to 1.2600 as markets await UK labor figures, where unemployment is anticipated to increase. Meanwhile, the US Dollar firm up due to higher Treasury yields and dovish stance of Fed officials regarding inflation. UK PM Keir Starmer’s demand for a “US backstop” in peace negotiations for Ukraine brings in geopolitical risk. • The duo falls to around 1.2600 prior to the highly important UK labor market numbers, snapping its five-day success run. • The jobless rate is expected to climb to 4.5%, while the claimant count should increase by 10K, which will influence GBP sentiment. • UK PM Keir Starmer emphasizes that any peace agreement for Ukraine must be accompanied by a “US backstop” to prevent Russian aggression in the future. • The US Dollar Index (DXY) bounces back on the back of surging Treasury yields and hawkish Fed comments, putting pressure on GBP/USD. • Fed Governor Michelle Bowman reiterates ongoing inflation threats, emphasizing added clarity is necessary before rate cuts are on the cards. • Investors hold back following Fed Governor Waller’s concession of slower inflation gains, adding to doubt on monetary policy action. • Geopolitical tensions and economic uncertainty propel GBP/USD volatility, and investors are focusing intently on forthcoming data announcements. GBP/USD has declined close to 1.2600 prior to the release of UK labor market data, bringing an end to its five consecutive days of advances. Investors closely observe the job numbers, which are anticipated to increase the unemployment rate to 4.5% and to grow the claimant count by 10K. A weaker-than-expected labor market could weigh further on the British Pound, adding to its recent decline. Meanwhile, UK Prime Minister Keir Starmer emphasized the need for a “US backstop” in any Ukraine peace deal to prevent future Russian aggression, adding a geopolitical dimension to market sentiment.  GBP/USD Daily Price Chart TradingView Prepared by ELLYANA On the American side, the Dollar is strengthening on the back of rising Treasury yields and cautious comments from Federal Reserve officials. The US Dollar Index (DXY) has risen after three consecutive days of decline as 2-year and 10-year Treasury yields are at 4.27% and 4.51%, respectively. Fed Governor Michelle Bowman has cautioned that inflation risks are still high and cautioned against moves to cut rates before more clarity is evident. In the same vein, Fed Governor Christopher Waller recognized sluggish progress in curbing inflation, cementing doubt about future policy action. All these factors combined point to GBP/USD’s bearish risk as investors wait for crucial economic indicators. TECHNICAL ANALYSIS GBP/USD is confronted with short-term support around the 1.2600 psychological mark, with a further drop possibly challenging the 1.2570 and 1.2530 support levels. A fall below these levels may create room for a more significant pullback to 1.2500. On the positive side, resistance is observed at 1.2650, followed by the recent high at 1.2700. The Relative Strength Index (RSI) is also turning down, reflecting bearish momentum, while the 50-day moving average at 1.2620 may serve as a dynamic resistance. Traders will be observing if GBP/USD can maintain above crucial support levels or continue its downside move in the face of fundamental pressures.  FORECAST If the UK labor market data surprises positively, showing resilience in employment figures, GBP/USD could regain strength. A better-than-expected jobs report might boost investor confidence in the British economy, pushing the pair towards the 1.2650 resistance level. If buying momentum continues, the next upside target would be 1.2700, followed by 1.2750, where significant resistance lies. Also, any dovish indications from the Federal Reserve for upcoming rate cuts may bring down the US Dollar, which will help propel a GBP/USD recovery. Conversely, if UK jobs data fail to impress with rising unemployment and an increased claimant count, GBP/USD may witness selling pressure. A fall below the important 1.2600 support could see further declines towards 1.2570 and 1.2530. Further, a more hawkish US Dollar, fueled by Fed hawkish commentary and an increase in Treasury yields, may hasten the losses. Should bearish pressure continue, GBP/USD might fall to the 1.2500 psychological support, testing 1.2450 in a protracted downtrend.

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