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Currencies USD/JPY

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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Currencies USD/JPY

USD/JPY Falls Below 142.50 as Japanese Inflation Remains Strong and US Data Provides Mixed Signals

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  • April 18, 2025
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The USD/JPY currency pair fell below the 142.50 level in Friday’s early Asian session, as the Yen was strengthened by higher-than-anticipated Japanese inflation data. Japan’s Consumer Price Index (CPI) increased 3.6% from year earlier in March, with core CPI rising to 3.2%, meeting market forecasts but supporting the Bank of Japan’s conservative view on policy tightening in the context of external uncertainties, including U.S. tariffs. In contrast, the U.S. dollar fared poorly even as Initial Jobless Claims decreased to a two-month low, as weaker manufacturing data from the Philadelphia Fed Index triggered worries over economic momentum. The blend of resilient Japanese inflation and conflicting U.S. data held the Yen strong, though possible upside is still constrained by cautious central bank cues. KEY LOOKOUTS • Japan’s March CPI data revealed ongoing price pressures, supporting the Yen and questioning the Bank of Japan’s next policy steps. • Even with robust inflation numbers, BoJ authorities, including Governor Ueda, are hesitant to increase rates further, highlighting that uncertainties must be watched, particularly those related to U.S. tariff movements. • Although U.S. Initial Jobless Claims fell to a two-month low, indicating the labor market’s stability, the Philadelphia Fed Index fell short of expectations, which suggested manufacturing weakness. • Markets are keeping close eyes on ongoing trade talks between Japan and the U.S., which may continue to impact currency trends as tensions escalate in global trade. The USD/JPY pair comes under renewed stress with Japan’s March inflation readings highlighting ongoing price growth, lending strength to projections of a dovish but firm economic scenario. Though the stronger CPI readings had earlier boosted the Yen, cues from the Bank of Japan indicating patience regarding coming rate hikes have subdued bullish exuberance. Meanwhile, confusing U.S. economic signals — with unemployment claims falling to a two-month low and manufacturing figures coming in weaker than expected — have kept the U.S. dollar on the defensive. The continuing trade talks between Japan and the U.S. will most probably continue to be a priority for investors, as policy and global trade risks continue to influence market mood in the next few sessions. USD/JPY pair fell under 142.50 following strong Japan’s March inflation that drove up the Yen. Still, BoJ’s dovish position regarding interest hikes and on-going U.S.-Japan trade discussions will act as a deterrent against further gains of JPY. Hesitant U.S. data further exacerbated the weakness in the Dollar earlier in the day in Asian time. • USD/JPY fell under 142.50 in early Asia trading Friday due to better-than-expected Japanese inflation numbers. •  Japan’s March CPI increased 3.6% YoY, down modestly from 3.7% earlier but still showing sustained price firmness. • Core CPI (excluding fresh food) rose to 3.2%, in line with expectations and showing stable underlying inflation. •  BoJ officials indicated restraint on rate hikes, pointing to overseas uncertainties, particularly over U.S. tariff policies. •  The U.S. Initial Jobless Claims declined to a two-month low, showing sustained labor market robustness. •  Philadelphia Fed Index decreased, falling below expectations and prompting worries about the health of U.S. manufacturing. •  Market attention centers on Japan-U.S. trade negotiations, which may determine direction of currencies and markets in the future amidst tariff tensions. Japan’s recent inflation figures showed that consumer prices were still high in March, as the National Consumer Price Index (CPI) increased 3.6% from one year ago. Core inflation, which excludes fresh food, came in at 3.2%, matching market expectations and suggesting steady price growth despite a slight cooling from previous months. The data reflects the ongoing impact of cost pressures on the Japanese economy, while policymakers at the Bank of Japan continue to approach future rate decisions with caution, citing global uncertainties, including the effects of U.S. tariff policies. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView At the same time, American economic indicators offered a mixed view. Initial Jobless Claims decreased to their two-month lowest level, reflecting a robust labor market. Yet the Philadelphia Fed Index of regional manufacturing activity lagged expectations and caused worries for the health of the manufacturing sector. Investors also monitor the developments of Japan-U.S. trade talks, as negotiations on tariffs and economic cooperation are ongoing between the highest authorities from both nations. TECHNICAL ANALYSIS USD/JPY pair is demonstrating bearish strength after breaking down below the 142.50 support level, which points to further declines if the sellers hold on to power. The pair is oscillating around the 142.20–142.25 zone, which has become an immediate support, and any attempts to bounce back might get resistance at around the 142.80–143.00 zone. The Relative Strength Index (RSI) on the lower timeframes indicates a weak oversold condition, pointing toward the likelihood of a short-term corrective bounce or consolidation preceding the next direction. Market participants will carefully observe price action around these crucial levels for additional indications. FORECAST USD/JPY pair is able to remain above the 142.20 support level and attracts some demand, it may try to stage a recovery towards the 142.80–143.00 resistance area. A continued breakout above here could pave the way for more upside, particularly if U.S. economic statistics surprise on the upside or if risk appetite picks up in international markets. Second, any hint of policy divergence among the Federal Reserve and the Bank of Japan — while the Fed remains resolute on interest rates — could also give a boost to a stronger Dollar in the short term. On the downside, if USD/JPY breaks and settles below the 142.20 support level, it could trigger fresh selling pressure, leading the pair toward the next support around the 141.50 region. Continued strength in Japanese inflation, combined with global trade tensions and weaker U.S. manufacturing indicators, could weigh further on the pair. In this scenario, sellers might target lower levels as investor sentiment leans toward safe-haven assets like the Japanese Yen.

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AUD/USD Currencies

Australian Dollar Remains Steady Despite Budget Release and Global Economic Unrest

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  • March 25, 2025
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The Australian Dollar stabilised after Treasurer Jim Chalmers’ release of the 2025/26 budget, which outlined anticipated deficits of A$27.6 billion in 2024-25 and A$42.1 billion in 2025-26, in addition to tax cuts to spur economic stimulus. The Reserve Bank of Australia’s restraint regarding interest rates and anticipation of Chinese stimulus both lent further support to the AUD. Nonetheless, cross-border uncertainties, such as President Trump’s US trade policies and inconsistent US economic statistics, remain possible threats. In the meantime, technical markers indicate the AUD/USD exchange rate is under stress, trending below significant levels of resistance within continuing market turmoil. KEY LOOKOUTS • The tax cuts and economic projections of the Australian government can shape investor optimism and market stability. • The Reserve Bank of Australia’s conservative approach to rate cutting and its reaction to inflation and international economic trends will be pivotal for the movement of the AUD. • Any possible tariff announcements by President Trump and how these will affect global trade, specifically Australia’s trading relationship with China and the US, may cause volatility. •The currency pair is still below major resistance at 0.6300, with support at 0.6220; a break above or below these levels may indicate the direction of the next market move. The Australian Dollar’s stability after the 2025/26 budget announcement is indicative of cautious optimism, but major factors may determine its path in the weeks ahead. The Reserve Bank of Australia’s interest rate stance continues to be a major focus, as investors weigh the chances of further policy changes. At the same time, worldwide trade tensions, especially possible US tariff announcements, may also weigh on market sentiment and the economic prospects of Australia. Of course, technical levels of resistance around 0.6300 and support at 0.6220 will also be observed closely, as a break through in either direction may indicate the next significant move for the AUD/USD pair. The Australian Dollar is stable following the budget announcement for 2025/26, with investors waiting for tax reductions and economic projections. RBA’s interest rate policy and possible US tariff implications may influence market sentiment. Technical resistance of 0.6300 and support of 0.6220 will be points of interest for AUD/USD action. • The budget for 2025/26 involves tax reductions and economic projections, with a budget deficit of A$42.1 billion for 2025-26. • The Aussie remains firm, helped by RBA holding rates and possible Chinese stimulus. • The Reserve Bank of Australia’s cautiousness towards rate cuts continues to be a leading driver of the AUD. • Looming uncertainty regarding possible tariff announcements from President Trump may generate volatility across markets worldwide. • US Services PMI jumped to 54.3, bolstering the US Dollar, while Manufacturing PMI was lower than forecasted. • Resistance at 0.6300 and support at 0.6220 will be key to deciding the pair’s next direction. • Beijing’s proposals to enhance consumption and wages would indirectly assist the Australian economy because of robust trade links. The Australian Dollar held firm after Treasurer Jim Chalmers delivered the 2025/26 budget that provided significant economic predictions, such as tax relief intended to ease money woes for households. The budget estimates a 2024-25 deficit of A$27.6 billion and A$42.1 billion for 2025-26, as the government aims to balance economic growth with fiscal prudence. Moreover, the GDP of Australia is predicted to expand by 2.25% in 2026 and 2.5% in 2027, indicating modest economic growth. The Reserve Bank of Australia (RBA) remains cautious in its interest rate moves, keeping inflation under control while fostering economic stability. AUS/USD DAILY PRICE CHART CHART SOURCE: TradingView The Australian Dollar maintained its calmness after Treasurer Jim Chalmers presented the 2025/26 budget that made important economic projections, such as the reduction of tax that would help alleviate financial burdens on households. The budget forecasts a deficit of A$27.6 billion for 2024-25 and A$42.1 billion for 2025-26, which shows that the government is striking a balance between economic growth and fiscal prudence. Moreover, Australia’s GDP is projected to increase by 2.25% in 2026 and 2.5% in 2027, indicating moderate economic growth. The Reserve Bank of Australia (RBA) remains cautious in its interest rate policy, keeping inflation under control while maintaining economic stability. TECHNICAL ANALYSIS The AUD/USD currency pair is trading around 0.6290, with technical indicators indicating a cautious market mood. The currency pair continues to be in a bearish trend and trades in a falling channel. The 14-day Relative Strength Index (RSI) is at a level slightly below 50, which means the currency has weak momentum. The important support remains at 0.6220 and breaking below this may drag the pair towards its seven-week low of 0.6187. Resistance on the upside comes at 0.6308 (nine-day Exponential Moving Average) and 0.6310 (50-day EMA). A breakout above these levels may signal short-term bullish momentum, while continued rejection at resistance may reinforce the prevailing downtrend. FORECAST The outlook for the Australian Dollar is mixed and dependent on both local and international considerations. To the upside, solid economic fundamentals from Australia, such as better Manufacturing and Services PMI reports, can underpin the AUD. Also, hopes of further stimulus from China, Australia’s biggest trading partner, could increase demand for Australian exports, supporting the currency. If the Reserve Bank of Australia continues to be cautious on interest rates without hinting at aggressive cuts, investor sentiment in the AUD might stay firm. A move above key technical resistance levels at 0.6310 could pave the way for more gains in the near term. But downside risks remain as uncertainty regarding US trade policies hangs in the air. Possible tariff announcements by President Trump have the potential to upset global trade and hurt risk-sensitive currencies such as the AUD. The US Dollar is also supported by robust Services PMI data and dovish comments from Federal Reserve officials, which could cap the AUD’s upside. If the AUD/USD currency pair is unable to sustain support at 0.6220, then further losses towards 0.6187 may be anticipated, supporting a bearish trend in the short term.

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Currencies NZD/USD

NZD/USD Suffers as Fed is Cautious and Geopolitical Tensions Rise: Can China’s Stimulus Rescue the Kiwi?

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  • March 21, 2025
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The NZD/USD currency pair continues to suffer from downward pressure for a third consecutive session as slight US Dollar strength takes its toll on the Kiwi. The Federal Reserve’s position of offering no more than two rate cuts this year, together with continuing geopolitical tensions in the Middle East and Eastern Europe, has contributed to safe-haven flows towards the Greenback. Though these forces temper the NZD’s outlook, positives surrounding China’s latest stimulus efforts provide some respite to the antipodean currency. Still, without high-profile US economic data releases, traders might still be cautious, waiting for more definitive signals before establishing a reversal in the NZD/USD trend. KEY LOOKOUTS • The US Dollar continues to be supported as markets absorb the Fed’s expectation of just two rate reductions by year-end. • Safe-haven demand for the Greenback continues to be fueled by ongoing Middle East conflicts and Russia-Ukraine war, putting pressure on NZD. • Hopes for China’s recent stimulus efforts may provide near-term support to the Kiwi and other antipodean currencies. • Weak US economic data may result in defensive trading, with investors waiting for a clear trend reversal in NZD/USD. The NZD/USD currency pair is under pressure against a mildly firm US Dollar, fueled by the Federal Reserve’s conservative approach towards interest rate reductions and persistent geopolitical tensions. The safe-haven demand for the Greenback is supported by ambiguity over global wars, especially in the Middle East and Eastern Europe. Nevertheless, hope over China’s newly proposed stimulus packages provides a possible safety net for the New Zealand Dollar, capping further losses. Without major US economic data, market players will resort to a wait-and-see strategy, awaiting clearer signs before affirming a directional change in the NZD/USD trend. NZD/USD continues to struggle for the third consecutive day against the backdrop of modest USD appreciation and increasing geopolitical tensions. Nevertheless, China’s stimulus optimism might serve to confine losses for the Kiwi to a smaller extent. Traders now look for clearer signs before affirming any significant trend change. • NZD/USD is down for the third day in a row, showing ongoing Kiwi weakness in the face of moderate US Dollar firmness. • The Greenback takes support from the Fed estimating only two 25 bps interest rate reductions by the end of the year, enhancing safe-haven demand. • Fed Chairman Powell’s remarks regarding slowed inflation gains and retaliation tariff fears further buoy the Greenback. • Middle East geopolitical tensions and the Russia-Ukraine conflict remain key drivers of demand for the safe-haven USD. • Recent stimulus in China provides some resilience to the New Zealand Dollar, preventing deep declines. • Traders’ restraint due to absence of key US economic data releases keeps them in wait-and-watch mode for more robust cues to take aggressive positions. • Sentiment in markets remains contradictory, with USD strength potential limited by fears of tariff-induced US economic slowdown. The NZD/USD currency pair remains under pressure as general economic and geopolitical considerations shape market sentiment. The US Dollar is supported by the Federal Reserve’s conservative stance towards interest rate reductions, with policymakers only forecasting two cuts this year. Further, comments by Fed Chair Jerome Powell on potential delays in meeting inflation targets due to global tariff retaliation have contributed to the Greenback’s strength. Meanwhile, continued geopolitical tensions, including Middle East tensions and the ongoing Russia-Ukraine war, have increased the need for secure assets such as the US Dollar. NZD/USD Daily Price Chart Chart Source: TradingView Conversely, some of the New Zealand Dollar’s positive momentum is coming from China’s newly announced economic stimulus policies. As a key trading partner for New Zealand, China’s economic outlook plays a crucial role in shaping the Kiwi’s performance. The stimulus efforts are expected to boost economic activity, indirectly benefiting export-driven economies like New Zealand. While these global dynamics continue to unfold, traders are closely monitoring market developments, waiting for stronger signals to determine the long-term direction of the currency pair. TECHNICAL ANALYSIS NZD/USD is appearing to suffer from chronic weakness as it is not able to maintain above crucial levels of support, and new selling pressure is seen near the mid-0.5700s. The pair’s failure to hold a bounce back from the 0.5720–0.5725 area indicates that downward momentum is still intact. The markets are eagerly observing for a firm break below this area of support, which might pave the way for more downside. However, any attempt to recover is threatened by the prospects of sellers cropping up in the 0.5780–0.5800 area, unless there’s a very good bullish stimulus shifting sentiment. FORECAST Any shift in the sentiment towards the riskier assets or a decline in the strength of the US Dollar as a result of the dovish inputs from the Fed or disappointing economic reports might result in NZD/USD recovering. A continued advance past the 0.5780–0.5800 resistance level might indicate fresh buying interest and carry the pair toward the next resistance around 0.5840. Improved Chinese economic news or better-than-anticipated New Zealand data might serve as a further catalyst for further pair upside action. On the negative side, sustained US Dollar strength, ongoing geopolitical tensions, or poor market confidence may continue to keep the NZD under strain. A fall below the 0.5720 support level may initiate further losses, setting the stage for a drop towards the 0.5670–0.5650 area. If bearish momentum gathers pace, the pair may even test lower levels not witnessed in recent months, supporting the bearish outlook unless backed by new fundamental triggers.

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Currencies

USD/CHF Remains Stable Around 0.8800 as Traders Look Towards Fed and SNB Rate Moves Under Geopolitical Uncertainty

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  • March 18, 2025
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The USD/CHF currency pair holds stable at around the 0.8810 mark in early European trading on Tuesday amid geopolitical uncertainty, as traders keep an eye out for pivotal monetary policy actions by the US Federal Reserve and Swiss National Bank (SNB) later this week. While the US Dollar draws modest support from better-than-anticipated retail sales and a marginal increase in the Dollar Index (DXY), increasing Middle Eastern geopolitical tensions are driving safe-haven flows into the Swiss Franc, possibly capping the pair’s upside potential. Market players overwhelmingly anticipate the Fed to leave rates stationary, while the SNB is expected to reduce its policy rate by 25 basis points, adding more interest in USD/CHF’s near-term direction. KEY LOOKOUTS • The Federal Reserve is expected to keep interest rates unchanged on Wednesday, with an eye on revised economic projections that could offer clues on the timing of future rate cuts. • The Swiss National Bank is expected to lower its key policy rate by 25 basis points on Thursday, with expectations of leaving it unchanged until at least 2026. • Escalating tensions in the Middle East, specifically Israel’s military buildup, could increase safe-haven demand for the Swiss Franc, exerting downside pressure on USD/CHF. • The US Dollar Index (DXY) is backed by a recovery in US retail sales, but any further move will wait for Fed cues and subsequent macroeconomic data. The USD/CHF cross is trading steadily around the 0.8810 level as traders await key central bank announcements from the US Federal Reserve and the Swiss National Bank (SNB) later this week. Although the US Dollar is mildly supported by a recovery in retail sales and a firmer Dollar Index (DXY), the upside for USD/CHF is capped by rising geopolitical tensions in the Middle East, which are increasing safe-haven demand for the Swiss Franc. Markets anticipate the Fed to leave interest rates on hold while releasing new economic forecasts that may influence future rate expectations. In the meantime, the SNB is expected to lower its policy rate by 25 basis points, a move that could impact the pair’s short-term movement. USD/CHF remains flat around 0.8810 as traders wait for critical interest rate announcements from the Fed and SNB this week. Although the US Dollar finds some support in retail sales figures, increasing geopolitical tensions in the Middle East enhance safe-haven demand for the Swiss Franc. • USD/CHF is flat around 0.8810 in early European trading on Tuesday. • Investors expect important interest rate decisions from the US Federal Reserve (Wednesday) and the Swiss National Bank (Thursday). • The US Dollar Index (DXY) advances to 103.55 on the back of a recovery in US retail sales figures. • Markets are expecting the Fed to remain unchanged, with possible rate reductions likely from June. • The SNB is expected to lower its policy rate by 25 basis points to 0.25%, according to economist expectations. • Geopolitical tensions in the Middle East, particularly Israel’s heightened military activity, are driving demand for safe-haven currencies such as the Swiss Franc. • Safe-haven flows and uncertainty in global markets can limit the near-term upside potential for the USD/CHF pair. The USD/CHF exchange rate is holding firm as global investors turn their attention to two key central bank announcements this week — the US Federal Reserve and the Swiss National Bank (SNB). Investors are keenly monitoring the results of the Fed meeting, which is expected to leave interest rates untouched. The economic forecasts of the central bank will also be significant, as they might provide some clues towards the US economy outlook and possible rate cuts in the later part of this year. Meanwhile, recent US retail sales data registered a modest rebound, providing some support to the overall sentiment of the market. USD/CHF Daily Price Chart Chart Source: TradingView Meanwhile, the spotlight is also on the SNB, which is expected to reduce its key policy rate. The policy action may herald a change in the Swiss economic sentiment and will have an important influence on forming market expectations in the future. Further, growing geopolitical tensions in the Middle East have seen a rise in demand for safe-haven currencies such as the Swiss Franc. Words from world leaders and rising tensions are still holding markets in reserve, creating yet another level of sophistication for this week’s central bank-driven news. TECHNICAL ANALYSIS USD/CHF is ranging narrowly around the 0.8810 mark, reflecting indecision on the part of traders prior to important central bank announcements. The pair is close to its short-term moving averages, which reflects a lack of strong momentum in either direction. A continued break above the near resistance at 0.8840 would set the stage for more upside towards the 0.8880–0.8900 area. On the other hand, support on the first hit is at 0.8780, and it has more robust support at the 0.8740 level. The technical indicators RSI and MACD are also neutral, supporting the period of consolidation until a positive directional break. FORECAST If the US Federal Reserve leans more towards hawkishness during its next policy meeting or communicates a postponement of interest rate reductions, the US Dollar could further appreciate. A strong economy underpinned by recent indications, including the recovery in retail sales, may also help bolster positive sentiment toward the Greenback. Under such circumstances, USD/CHF may experience upwards direction, provided that the Swiss National Bank follows through with a rate cut and further increases the interest rate spread between the US and Switzerland. Alternatively, escalating Middle Eastern tensions may continue to fuel safe-haven demand for the Swiss Franc, exerting pressure on the USD/CHF pair. In addition, if the SNB adopts less dovish positioning than anticipated or suggests maintaining rates unchanged for a longer duration than expected, this may make the Swiss Franc stronger. Any news of slowing economies or dovish forecasts by the Fed will also bear on the US Dollar and add to the potential short-term downside risk of USD/CHF.

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AUD/USD Currencies

Australian Dollar Falters as US Dollar Strength and Rising Global Tensions Intensify

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  • March 18, 2025
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The Australian Dollar (AUD) continues to struggle as the US Dollar (USD) strengthens on the back of rising geopolitical tensions and poor US economic data. Heightened fears of Middle East conflicts, possible trade disruptions, and aggressive US tariff policies by President Donald Trump have shaken global markets, lifting safe-haven demand for the USD. While the Reserve Bank of Australia (RBA) remains optimistic about cuts in interest rates in the future, providing some boost to the AUD, stimulus measures by China provide some cushioning for the Aussie Dollar. Although trade anxieties on the horizon and softer US retail data remain dampeners for investor moods. KEY LOOKOUTS • Increasing Middle East tensions and assertive US policy measures continue to drive safe-haven demand for the US Dollar, exerting downward pressure on the Australian Dollar. • The Reserve Bank of Australia’s reluctance to cut interest rates could give the AUD temporary support, depending on inflation patterns and world economic conditions. • Optimism from China’s consumption-stimulating measures could be a boon to the AUD, considering Australia’s robust trade relations with China. • The AUD/USD currency pair can test the crucial resistance level of 0.6408. A break can reach 0.6480, and strong support is found at 0.6330 and 0.6311. The Australian Dollar (AUD) is under a challenging trading scenario with increasing geopolitical tensions and the US Dollar (USD) strengthening, bolstered by safe-haven demand and threats of tariffs from the Trump administration. Though soft US economic data, including disappointing retail sales and weakening consumer sentiment, put a cloud of uncertainty over the outlook for the USD, the AUD is under pressure from worries of global trade dislocation and Australia’s exposure to commodity markets. Nevertheless, the Reserve Bank of Australia’s prudent stance on cutting interest rates and China’s recent stimulus package targeting consumption provide some glimmer of support for the Aussie. Technical levels indicate a possible bullish shift in the AUD/USD, but future upside will rely on global risk appetite and core economic events ahead. The Australian Dollar is still pressured as the US Dollar consolidates its gains on renewed geopolitical tension and uncertainty about trade. Yet, prudent RBA policy and China’s economic stimulus offer support. Market attention now turns to significant technical levels and prospective economic indicators. • The Australian Dollar weakens as geopolitical tensions drive demand for the safe-haven US Dollar. • RBA Assistant Governor Sarah Hunter gives a nod towards cautiousness with future rate cuts. • Dismal US Retail Sales and weaker consumer sentiment place pressure on the USD outlook. • US President Trump’s proposed reciprocal tariffs and no exemption for steel and aluminum affect Australia’s trade outlook. • China’s specific action plan to stimulate consumption provides regional market assistance, supporting the Aussie Dollar. • AUD/USD is traded around 0.6380, with possibilities to test the resistance at 0.6408 and trend towards 0.6480. • The investors are careful as the ongoing global economic and political events are still driving currencies. The Australian Dollar is under pressure as geopolitical tensions rise, especially in the Middle East, where the US has reasserted its military presence. The increased global uncertainty has fueled demand for the US Dollar, which is commonly regarded as a safe-haven asset during periods of crisis. Concurrently, economic issues in the US, including soft retail sales and a precipitous decline in consumer sentiment, have created an additional layer of sophistication in overall market sentiment. Though these contribute to market volatility, the general global backdrop still plays a role in currency movements, including the AUD. AUD/USD Daily Price Chart Chart Source: TradingView Domestically, the Reserve Bank of Australia (RBA) has adopted a conservative view regarding future interest rate reductions, hinting at a more prudent strategy than what the markets had predicted. This occurs as Australia’s trade environment is also under threat from the US administration’s refusal to remove tariffs on Australian steel and aluminum exports. But recent Chinese efforts to trigger its economy—like increasing household consumption and stabilizing markets—provide a glimmer of hope for Australia’s economy, considering China’s vital position as an important trading partner. TECHNICAL ANALYSIS AUD/USD pair still has a bullish tilt as it still moves in an upward channel in the daily chart. The currency pair is presently trading close to 0.6380, and the impetus is buoyed by the 14-day Relative Strength Index (RSI) being sustained above the 50 level, which shows strength on the buy side. In case the pair continues to go higher, it could try and test the new high close to 0.6408. However, levels of support close to 0.6330 and 0.6311 are pivotal; a break below these might spell a change in trend and usher in more downward pressure. FORECAST If sentiment in the market is bullish and geopolitical tensions between nations become less, the Australian Dollar may recover strength, provided that China’s economic stimulus initiatives begin to yield more positive results. Increased stability globally, along with a prudent but consistent monetary policy by the Reserve Bank of Australia, could be a basis for AUD recovery. Moreover, if future US economic data continues to underperform, it may devalue the US Dollar and lend support to a bullish trend in the AUD/USD currency pair. Strong commodity demand and positive risk appetite can further drive the Aussie higher in the short term. On the bearish side, the Australian Dollar is exposed to sustained geopolitical tensions and escalating global uncertainties, especially with regards to US trade policies and military aggressions. Continued resilience of the US Dollar, fueled by safe-haven flows and possible policy changes by the Federal Reserve, may put further pressure on the AUD. Additionally, if the recovery in China slows down or Australia continues to encounter more trade-related issues, the AUD might not be able to gain strength, making a decline in the AUD/USD pair more likely. 

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Currencies

USD/CAD Grapples With Lows Under Weight of Bearish USD Sentiment and Higher Oil Prices

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  • March 17, 2025
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The USD/CAD currency pair continues to see downward pressure, trading at the lower end of its near-term trading range as bearish US Dollar sentiment and higher crude oil prices keep the pair on the back foot. A bull spike in oil due to Red Sea geopolitical tensions and tighter Canadian fundamentals is providing some support to the commodity-linked Loonie. Meanwhile, growing expectations of multiple Fed rate cuts in 2025, coupled with soft US inflation data and a cooling labor market, keep the US Dollar subdued. Traders now await key US economic data and the outcome of the upcoming FOMC policy meeting for clearer directional cues. KEY LOOKOUTS • Markets await the outcome of the FOMC meeting, which could offer fresh clues on future interest rate path and USD direction. • Future US economic statistics such as Retail Sales and Empire State Manufacturing Index can shape short-term USD/CAD direction and sentiment. • Further escalation of Middle East tensions would further push oil prices up, supporting the Canadian Dollar and putting downward pressure on USD/CAD. • Bullish news from recent US-Canada trade negotiations can continue to support the Loonie, keeping upside in the USD/CAD pair in check. Traders are keenly interested in important economic and geopolitical events that may dictate the USD/CAD pair in the near future. The impending FOMC policy meeting is crucial in its importance, with a potential to provide new information on the Federal Reserve’s rate-cut path as US inflation and labor indicators weaken. US Retail Sales and Empire State Manufacturing Index would also be awaited for short-term trading signals. Conversely, increasing crude oil prices, driven by growing tensions at the Red Sea, remain to underpin the commodity-related Canadian Dollar. Additionally, sentiment from recent US-Canada trade talks that was optimistic in nature may keep the Loonie strong and limit any significant appreciation of the USD/CAD pair. USD/CAD is under pressure at the lower end of its range due to a weak US Dollar and higher crude oil prices. Traders are waiting for important US data and the FOMC policy decision for new direction. Favorable US-Canada trade sentiment also favors the Loonie. • USD/CAD stays firm around mid-1.4300s, unable to bounce back due to overall bearish sentiment against the US Dollar. • Crude oil prices jump to a two-week high, propping up the Canadian Dollar on account of its commodity-linked nature. • Geopolitical tensions in the Red Sea drive oil price spikes, bolstering the Loonie and capping USD/CAD upside. • Market expectations of several Fed rate cuts in 2025 weigh heavily on the US Dollar’s strength. • Soft US inflation and moderating labor market numbers reaffirm hopes for dovish Federal Reserve policy. • Positive news recently in US-Canada trade negotiations further encourages investor sentiment in the Canadian Dollar. • Sellers look to later US Retail Sales, Empire State Index, and FOMC meeting for new directional signals in the USD/CAD. The USD/CAD currency pair is currently driven by the larger economic and geopolitical forces dictating the world financial environment. One of the major drivers is the increasing prices of crude oil, which have a direct positive impact on the Canadian economy given its position as a significant oil exporter. The recent increase in oil prices, driven by increased tensions in the Red Sea, has made the Canadian Dollar stronger. Moreover, the positive news from the last US-Canada trade talks has provided a good support for the Loonie, and market sentiment has been enhanced with renewed faith in Canada’s economic prospects. USD/CAD Daily Price Chart Chart Source: TradingView Conversely, the US Dollar is being pressed as expectations grow for the Federal Reserve to take a dovish approach in the following months. Weaker inflation data, slowing signs in the labor market, and expectations for two interest cuts by 2025 have all fed into the weakening USD prognosis. Additionally, renewed fears that the US trade policy will somehow impact the American economy have put even more hesitation. As the traders look forward, the future US economic releases and the policy decisions of the Federal Reserve will have a significant role to play in determining the bigger picture for both currencies. TECHNICAL ANALYSIS USD/CAD currency pair is consolidating in the vicinity of the lower side of its short-term trading band, reflecting a risk-averse market mood. The 1.4350 level is being used as an important support zone, and an unambiguous breach below here can lead the way for more selling. To the upside, recovery efforts will confront resistance at about the mid-1.4400s where selling can get re-instated. The duo’s failure to hold on to a firm upward push is a reflection of the underlying bearish sentiment, with traders still watching price action closely for possible breakout or breakdown cues in the sessions ahead. FORECAST If the USD is able to recover its strength, fueled by better-than-anticipated economic reports or a less dovish Federal Reserve in the next FOMC meeting, USD/CAD may try to recover. A move above the near-term resistance around the mid-1.4400s may fuel further upside action, possibly drawing in new buying interest. If that happens, the pair may target higher levels in the near term, particularly if oil prices stabilize or decline modestly. Conversely, if bearish pressure against the US Dollar persists as more rate cuts and dismal economic indicators are anticipated, USD/CAD could fall further. If the price goes below the 1.4350 support level for an extended period, selling momentum could be triggered once more, directing the pair lower towards further support levels. Moreover, if oil prices keep rising due to geopolitical tensions, the Canadian Dollar might gain further, which could hasten the downside risk for USD/CAD.

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Currencies GBP/USD

GBP/USD Extends Above 1.2400 on Tariff Uncertainty and BoE Rate Cut Expectations

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  • February 4, 2025
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GBP/USD stayed above 1.2400, trading at around 1.2430 as market sentiment improved in the wake of US President Donald Trump’s decision to hold back tariffs on Mexico and Canada. However, uncertainty remains since China will have to endure a 10% all-around tariff with definitive trade talks set for within the next 24 hours. The US Dollar Index (DXY) has stabilized at 108.70, buoyed by the release of positive ISM Manufacturing PMI data. The Pound was under pressure due to expectations of a 25 basis point reduction in interest rates by the BoE to 4.5% on Thursday as inflation indicators slow down. Market volatility still keeps traders wary. KEY LOOKOUTS • GBP/USD traders look for the 10% tariff on China, with the potential for volatility depending on the outcome of US-China trade negotiations. • The Bank of England is likely to cut the rates by 25 bps to 4.5%, which will weigh on the Pound’s strength. • The US Dollar Index stabilizes around 108.70, supported by stronger-than-expected ISM Manufacturing PMI data, which influences the movement of GBP/USD. • Investor sentiment remains fragile as traders monitor geopolitical developments, including Trump’s tariff policies and global risk-on sentiment shifts affecting currency markets. GBP/USD remains steady above 1.2400 as traders closely monitor key developments, including the impact of US tariffs on China and upcoming trade negotiations. The Pound is under pressure as the market expects the Bank of England to cut interest rates by 25 basis points to 4.5% on Thursday, which will be dovish in nature as inflation slows down. The US Dollar Index stabilizes around 108.70, supported by stronger-than-expected ISM Manufacturing PMI data. Market volatility persists as investors assess geopolitical risks, particularly Trump’s shifting tariff policies and global risk sentiment, which could influence the currency pair’s movement in the coming sessions. GBP/USD stays above 1.2400 as traders monitor US-China tariff developments and the Bank of England’s expected rate cut. The US Dollar stabilizes around 108.70, supported by strong economic data, while market volatility remains high amid shifting global risk sentiment. •The pair trades at 1.2430 while supported by improvement in risk sentiments and tariff negotiation. • The 10 percent tariff on China comes into place, and crucial trade talks will be seen over the next 24 hours • The Pound is likely to be weighed as the Bank of England is poised to cut 25 basis points interest rate at 4.5 percent by Thursday • The US dollar index is now trading around 108.70, supported by stronger-than-expected ISM Manufacturing PMI data. • Trump delayed tariffs for a minimum of 30 days due to border security commitments from both countries. • Uncertainty over trade policies, economic data, and political events keeps investors nervous. • Rising wage growth in the UK might become another factor by moving forward future BoE policy decisions as inflation is slowing. GBP/USD hovers at 1.2430 just above 1.2400, though traders continue to be vigilant about the fast-moving global trade changes and shifts in monetary policies in the world. The market is cautious as the US-China tariff tension is still a concern, although the 10% across-the-board tariff would be implemented, and trade talk between the two nations may play a role in currency movement. Meanwhile, interest rate cuts from the Bank of England are seen to be trimmed by 25 basis points on Thursday to 4.5%, which reflects a dovish tone due to slowing inflation. This may pull down the Pound. GBP/USD Daily Chart TradingView Prepared by ELLYANA US Dollar Index stabilizes at around 108.70 with ISM Manufacturing PMI higher than anticipated, coming at 50.9 for January, while attention to Trump postponing tariffs against Mexico and Canada for 30 days also lowered the immediate impact of trade war. These happenings do not make market sentiment stabilize; geopolitical risks, economic data, and central bank policies keep on bringing in a fluctuation in the value of GBP/USD over the coming sessions. TECHNICAL ANALYSIS GBP/USD is still above 1.2400 and has shown strength against global uncertainty, with mixed signals from technical indicators. The pair is currently trading near 1.2430, where it is testing the 50-day moving average as a major support level. A sustained move above 1.2450 could push the pair towards the psychological resistance of 1.2500, while a break below 1.2400 may expose the support at 1.2350. The Relative Strength Index is seen hovering near the neutral 50 level, thus showing a lack of strong momentum in either direction. The Moving Average Convergence Divergence remains flat and reflects indecision in market sentiment. Price action around these levels will be carefully watched, as further volatility can be expected before the BoE rate decision and US-China trade developments. FORECAST If GBP/USD can overcome the 1.2450 resistance level, which is backed by positive risk appetite and a soft US Dollar, its rallies are likely to continue. In case of the pair’s successful clearance of this point, the next one to be watched at the level of 1.2500 will be a psychological one that will attract higher buying. A bullish breakout above this point may send the currency higher through 1.2550 and 1.2600 within the short term. Positive news from the US-China trade talks or more hawkish-than-expected rate decision by the Bank of England can be helpful for the Pound to go upward. Also, if US data is disappointing and the Federal Reserve hints at its dovish sentiment, then further weakness in US Dollar will aid GBP/USD. Downward, the former remains susceptible at the support region of 1.2400, which now becomes the very next important zone of support lies at 1.2350. A break below this level can push the prices further down, toward 1.2300 and 1.2250, as pressure mounts in the market due to concerns over the UK economy, and the Bank of England considering a rate cut. If it becomes more dovish or talks about more rate cuts in future, the pound may face some more selling pressures. Escalating US-China trade tensions or continued strong US economic data may also see USD regain some strength

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