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USD/CAD Declines Below 1.3850 as Dollar Retreats Ahead of Highly Anticipated U.S. Jobs Report

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  • May 2, 2025
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USD/CAD pair fell below the 1.3850 level in Friday’s Asian session, trading around 1.3830, as the U.S. Dollar receded ahead of the highly anticipated Nonfarm Payrolls (NFP) report. Although the greenback had gained some strength recently, investor caution re-emerged with doubts about how current tariff measures are affecting job growth. Greater positive sentiment in the market, fueled by U.S. President Donald Trump’s positive comments on trade agreements with major Asian allies provided some relief to the USD. In contrast, softer-than-anticipated economic reports from both the U.S. and Canada—such as increasing U.S. unemployment claims and a third consecutive drop in Canada’s Manufacturing PMI—added to the conservative tone. The Bank of Canada’s recent meeting minutes also indicated a contained policy stance, dampening hopes of near-term rate reductions in spite of continued economic weakness. KEY LOOKOUTS • Market players are all eyes on Friday’s NFP reports for indications of how tariffs and trade tensions are impacting the U.S. labor market, and possibly impacting the direction of the USD. • Any breakthrough or delays in U.S. trade talks with China, India, Japan, and South Korea may determine market mood and USD strength. • While the BoC has kept rates steady in the face of sticky inflation and a robust labor market, future economic releases will be pivotal in determining future rate expectations. • Further softness in Canada’s manufacturing sector and other macro datapoints could bear down on the CAD, particularly if economic slowdown accelerates. USD/CAD pair are the following U.S. Nonfarm Payrolls report, which might offer vital information on the effects of tariffs on employment and shape Federal Reserve policy expectations. Market participants are also watching events on the trade front, as any improvement in U.S. negotiations with China, India, Japan, and South Korea might enhance risk appetite and underpin the U.S. Dollar. On the Canadian side, ongoing weakness in manufacturing—dramatized by April’s steep decline in the S&P Global Manufacturing PMI—may continue to stress the Canadian Dollar. Further, the Bank of Canada’s conservative policy tone, as embodied in its most recent meeting minutes, indicates that rate decisions will continue to be highly data-sensitive, so coming economic releases will be important for the CAD outlook. Traders are keeping a close eye on the U.S. Nonfarm Payrolls report for indications of the impact of tariffs on the labor market, which may alter USD sentiment. Poor Canadian manufacturing figures and the Bank of Canada’s conservative approach contribute to downside pressure on the CAD. Trade updates also continue to be a primary market driver. •  USD/CAD dipped below 1.3850, trading at around 1.3830 during Friday’s Asian session with a lull in the recent rally of the U.S. Dollar. • Investor attention is on the forthcoming U.S. Nonfarm Payrolls (NFP) release, which can provide insights on whether tariffs are impacting employment trends. • U.S. Initial Jobless Claims increased to 241,000, exceeding estimates and introducing caution to the economic outlook. • The U.S. ISM Manufacturing PMI fell to 48.7, still in contraction but better than predicted, providing mixed signals. •  Canada’s Manufacturing PMI dipped to 45.3 in April, lowest since May 2020, indicating ongoing sectoral weakness. • Bank of Canada left rates unchanged at 2.75%, due to sticky core inflation and a firming labor market, but left the door open for future rate cuts. • Optimistic market sentiment trailed following U.S. President Trump’s comments on the possibility of trade agreements with significant Asian economies, providing partial support to the USD. Investor sentiment in the USD/CAD cross is being influenced by a combination of economic data and geopolitical events. With the focus now shifting to the impending U.S. Nonfarm Payrolls report, markets are looking forward to gaining some insight into how existing trade policies, most notably tariffs, are potentially impacting employment and general economic activity. The latest comments from U.S. President Donald Trump hinting at possible trade deals with nations such as India, Japan, and South Korea have also alleviated some of the concerns related to trade. Moreover, news of China being willing to resume talks with the U.S. has also added to a slightly positive market sentiment. USD/CAD DAILY CHART PRICE CHART SOURCE: TradingView In Canada, economic data continues to reflect strain, especially in the manufacturing segment. S&P Global Manufacturing PMI declined for the third consecutive month in April to its weakest since the beginning of the pandemic. In spite of these conditions, the policy rate was left unchanged by the Bank of Canada due to entrenched core inflation as well as an unemployment market which proved surprisingly resistent. With both economies charting mixed data and shifting trade dynamics, market players are prudent, awaiting future economic releases and policy announcements for firmer guidance. TECHNICAL ANALYSIS USD/CAD has retreated after it failed to hold above the resistance 1.3850 level, hinting at a possible short-term consolidation. The duo is now trading around the 1.3830 level, with short-term support at 1.3800, a level that has served as a psychological floor in recent sessions. A breach below this support would pave the way towards 1.3750. On the higher side, a move above 1.3850 would be required to be sustained to restore bullish momentum, with the next resistance likely at 1.3900. Momentum tools like the RSI are turning lower, hinting at a possible continuation of range-bound behavior unless there is a robust catalyst. FORECAST Unless strong catalysts occur, like better-than-expected U.S. economic statistics on the next major releases, notably the Nonfarm Payrolls, this optimism in USD will fade and can potentially favor further downward moves to CAD. Strengthening trade sentiment, most likely should breakthroughs emerge on trade deals with China or other significant trading partners, might support positive momentum as well. Technically, a breakout above the 1.3850 resistance level could set the stage for the 1.3900–1.3950 range, particularly if risk appetite sours and investors flock to the safety of the USD. Conversely, however, if U.S. jobs data sends the wrong message or hints at slowing economic growth owing to tariff pressures, the USD could face fresh selling pressure. Dollar weakness would drag USD/CAD down,

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Currencies EUR/USD

EUR/USD Falls as ECB Reduces Rates in Face of Global Trade News and Market Volatility

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  • April 17, 2025
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The EUR/USD currency pair experienced fresh selling pressure, declining back to 1.1340 following the European Central Bank (ECB) decision to make a widely expected 25 basis point cut in rates — its sixth successive reduction — as part of its ongoing campaign to nudge inflation back towards the 2% goal in the face of a weakening Eurozone economy. The ECB’s move, along with its deletion of previous language indicating interest rates are still restrictive, hints at a possible end to the easing cycle. In the meantime, optimism about U.S.-Japan trade talks gave the U.S. Dollar a boost, while doubts over U.S.-China trade ties and Federal Reserve Chairman Jerome Powell’s dovish economic outlook kept global markets on edge. In spite of the near-term retreat, EUR/USD still has a bullish technical setup, with the next significant resistance seen at 1.1500. KEY LOOKOUTS • The European Central Bank cut its key lending rates by 25 basis points but importantly avoided saying that rates will continue to be “restrictive” — suggesting that it might be ready to end its easing cycle as inflation trends improve. • Encouraging developments in trade talks between Japan and the U.S., which were highlighted by President Trump, relieved the U.S. Dollar and dampened EUR/USD recovery efforts. • Investors are looking forward to ECB President Christine Lagarde’s comments for greater insights into the central bank’s future policy direction, particularly how the continued global trade tensions affect it. •  As EUR/USD dipped below 1.1340, technical metrics such as the 14-day RSI holding above 70 and more sloping EMAs indicate the pair’s wider bullish trend is intact. The EUR/USD pair fell under renewed selling pressure, moving towards 1.1340 after the European Central Bank (ECB) declared a widely anticipated 25 basis point rate cut, its sixth in a row since the beginning of its easing cycle. The ECB’s decision reflects its ongoing efforts to tame inflation and support a slowing Eurozone economy, though the omission of any reference to rates remaining “restrictive” suggests policymakers may be eyeing a temporary pause. Meanwhile, the U.S. Dollar regained strength on the back of positive progress in U.S.-Japan trade negotiations, offering some relief to global markets amid persistent uncertainty over U.S.-China trade relations. Even with the ongoing correction, the EUR/USD pair still has a generally bullish outlook, with investors waiting anxiously for further guidance from ECB President Christine Lagarde’s next comments. EUR/USD continued to decline towards 1.1340 after the ECB trimmed interest rates by 25 basis points, as anticipated, indicating a possible end to its easing cycle. The U.S. Dollar strengthened amid positive U.S.-Japan trade news, further putting pressure on the pair. Investors now look to ECB President Lagarde’s remarks for new policy guidance. •  The European Central Bank cut its main borrowing costs as expected, its sixth consecutive reduction in response to softening Eurozone growth and cooling inflation. •  The EUR/USD currency pair fell towards 1.1340 following the rate decision, with strong selling pressure during early North American trading hours. •  For the first time in months, the ECB left out the word indicating interest rates are “restrictive,” which may indicate a possible halt to its rate-cutting cycle. •  Encouraging news from U.S.-Japan trade negotiations, led by President Trump’s announcement of “big progress,” brought relief to the U.S. Dollar. •   Markets are looking to ECB President Christine Lagarde’s comments for insight into future policy direction, particularly in the context of global trade uncertainty. •  In spite of the recent decline, the EUR/USD currency pair maintains a bullish setup with the support of higher sloping EMAs and the RSI remaining above the 70 level. •  Continued uncertainty regarding U.S.-China trade tensions continues to overshadow market sentiment, keeping traders defensive in the short term. The European Central Bank (ECB) announced yet another 25 basis point cut in interest rates, its sixth consecutive rate reduction since initiating its monetary easing cycle in June. The move is an extension of the ECB’s continued bid to stabilize the Eurozone economy as inflation makes slow progress towards its 2% target. Notably, the central bank did not reproduce its standard line that interest rates would continue to be “restrictive,” implying policymakers may be weighing a pause in additional reductions. The ECB reiterated that future policy will be “data-dependent” and influenced by the current global economic situation, specifically the uncertainty of international trade patterns. EUR/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, international market focus has turned to developments in negotiations of trade talks between the United States and Japan. Favorable comments from both parties indicate better ties, providing a breath of relief for international markets that have been under pressure from tariff tensions. As the U.S.-Japan talks are progressing, however, general anxiety over the U.S.-China trade war remains, causing businesses and investors to remain guarded. As policymakers around the world adjust to these rapidly changing circumstances, market players are monitoring closely for any indication of how governments and central banks will act to protect economic stability. TECHNICAL ANALYSIS EUR/USD currency pair is undergoing a good correction after unable to maintain its momentum above the 1.1400 mark. Even after the correction, the overall trend is bullish since the price continues to trade above the major short-to-long-term Exponential Moving Averages (EMAs), indicating underlying strength. Furthermore, the 14-day Relative Strength Index (RSI) continues to remain above the 70 level, indicating that bullish momentum remains in place, though marginally overheated in the near term. Traders are currently monitoring the psychological resistance level of 1.1500, which is still a critical upside target, while the April 11 low around 1.1190 acts as a robust support level, likely to be bought if the correction worsens. FORECAST EUR/USD continues to be bullish provided the pair remains above critical technical support levels. The steepening slope of the Exponential Moving Averages (EMAs) and the Relative Strength Index (RSI) remaining above the 70 level indicate solid underlying buying demand. If the pair picks up momentum, the first target would be the psychological resistance at 1.1400, and a clear break above this level could

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Currencies EUR/USD

EUR/USD Stays Put Around 1.1350 as Market Prepares for ECB Interest Rate Decision and Fed Inflation War

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  • April 15, 2025
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The EUR/USD currency pair stays put around the 1.1350 level as the US Dollar tries to regain stability as stagflation fears increase and as market sentiment turns defensive. Market participants are watching remarks from Federal Reserve officials, such as Atlanta Fed President Raphael Bostic, who noted the long way that will have to go to achieve the central bank’s 2% inflation target — a sign that rate decreases will not come as early as some had anticipated. In the meantime, everyone is focused on the next policy meeting of the European Central Bank, when a widely anticipated 25 basis point reduction in interest rates might determine the Euro’s short-term direction. Uncertainty over global trade tensions and changing projections by major financial institutions such as Deutsche Bank also contribute to the confusion, leaving market participants vigilant for any hints about the future course of monetary policy on both the Atlantic and other sides. KEY LOOKOUTS • Markets are expecting a 25 basis point rate cut in Thursday’s European Central Bank meeting, and they are looking for forward guidance on the future of monetary easing. • Federal Reserve officials, particularly Raphael Bostic, indicate that rate cuts might take a bit longer as the US central bank stays loyal to its 2% inflation target. • Market participants look for the ECB’s Bank Lending Survey for information on credit conditions, which may have implications for both the rate decision and the ECB’s economic outlook. • Increased trade uncertainty and possible US tariff changes remain weighing on market sentiment, providing near-term support for the Euro with recession fears in the US. With the EUR/USD pair trading around the 1.1350 mark, market attention turns to a number of key drivers that may decide its next direction. The European Central Bank is to make its highly anticipated policy rate decision on Thursday, with traders broadly factoring in a 25 basis point interest rate cut, while also looking for any guidance on future easing cycles. Across the Atlantic, the Federal Reserve’s measured approach to inflation — in the wake of Atlanta Fed President Raphael Bostic’s comments — indicates that the journey towards U.S. rate cuts could be slower than anticipated. The publication of the ECB’s Bank Lending Survey will also provide new clues on the state of credit in the Eurozone. At the same time, persistent global trade tensions and doubts over possible U.S. tariff shifts remain to influence investor mood, offering risk and support to the Euro in the short term. The EUR/USD pair remains anchored around 1.1350 as markets look for the ECB’s anticipated 25 basis point rate cut and more hints on monetary policy. The US Dollar, meanwhile, looks to stabilize as Fed officials remain cautious about inflation and ongoing global trade tensions. Investors look for major data and central bank comments to determine the next move. •  EUR/USD hovers around 1.1350 as the pair remains range-bound with risky market sentiment. •  The US Dollar tries to firm up as stagflation fears reemerge and dampen global risk appetite. •  Federal Reserve’s Bostic indicates a long way to go before reaching the 2% inflation goal, dashing hopes for imminent rate cuts. •  ECB to cut the rate by 25 basis points at its policy meet on Thursday, keeping the Euro in limelight. •  Deutsche Bank revises rate cut prediction for Fed, anticipating first cut in Dec 2025, two additional cuts in early 2026. •  The ECB’s Bank Lending Survey (BLS) is under the spotlight for information regarding credit conditions and the health of the Eurozone economy. • Global trade tensions and recessionary concerns continue to underpin the Euro and place pressure on the US Dollar’s rebound. The EUR/USD currency pair remains firm as market participants look towards this week’s key central bank news and economic releases. The European Central Bank is widely anticipated to cut interest rates by 25 basis points at its next policy meeting, a move designed to underpin growth throughout the Eurozone. Meanwhile, market players are monitoring the ECB’s Bank Lending Survey, which will offer useful insight into how credit conditions are influencing the region’s overall financial well-being. EUR/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, the US Dollar is holding its ground as traders digest recent comments from Federal Reserve officials. Atlanta Fed President Raphael Bostic’s statement underlined that the path to bringing inflation back to the 2% target remains challenging, hinting that US rate cuts may not arrive as soon as previously expected. In addition to central bank indications, persistent global trade tensions and policy uncertainty are also exercising considerable influence over investor sentiment, with markets pricing in possible risks to the global economy in the coming months. TECHNICAL ANALYSIS EUR/USD is trading around the 1.1350 level, hinting at consolidation as the pair awaits strong directional signals. The latest price action suggests indecision surrounding major levels of resistance and support, pointing to the fact that traders wait for new sparks from central bank policies or fresh economic data to push through resolute moves. A continued penetration of near-term resistance may be enough to establish further room on the upside, but a inability to maintain present support levels would risk exposing the pair to greater bear pressure short-term. FORECAST If the European Central Bank’s forthcoming policy announcement and economic commentary succeed in finding an even keel — loosening but remaining upbeat on the recovery of the Eurozone — then the EUR/USD pair might strengthen in the near term. Surprise improvements in Eurozone economic statistics or hints at weakening US inflation might similarly prop up the Euro, sending the pair higher to resistance levels as risk appetite is regained by investors. On the flip side, if the rate cut by the ECB is coupled with a more dovish tone or the US Dollar gains new strength on the back of improved economic indicators or diminishing recession fears, EUR/USD could see fresh selling pressures. Also, ongoing global trade tensions and any rise in geopolitical tensions would tempt investors to take refuge in the

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Currencies NZD/USD

NZD/USD Outlook: New Zealand Dollar Stabilises, To Consolidate Between 0.5540 and 0.5760 – UOB Group

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  • April 10, 2025
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The New Zealand Dollar (NZD) has stabilised against the US Dollar (USD), FX analysts Quek Ser Leang and Peter Chia of UOB Group report. After a brief fall to 0.5485, the NZD rallied sharply, ending stronger at 0.5650—a strong intraday gain. This move, particularly the break above the strong resistance level of 0.5650, suggests that the recent downtrend in NZD might have ended. Short term, the NZD/USD pair will test 0.5695, with consolidation expected in the wider range of 0.5540 to 0.5760. KEY LOOKOUTS •  NZD/USD may probe the 0.5695 level in the near term, as long as it remains above minor support at 0.5620 and key support at 0.5580. •  Although upside momentum is increasing, the major resistance level at 0.5760 is unlikely to be tested in the near term. •  The steep reversal and break above 0.5650 signal that recent NZD weakness has most probably stabilised and the outlook has turned from bearish to neutral. •  In the next 1–3 weeks, NZD/USD should consolidate between the 0.5540–0.5760 levels as market sentiment comes back into equilibrium. NZD/USD has turned as recent price action indicates that New Zealand Dollar weakness has stabilized. After dipping to 0.5485, the pair snapped back strongly and cleared the major resistance level at 0.5650, marking the end of the bear trend. The NZD is now expected by UOB Group analysts to range in a clear area of 0.5540 to 0.5760 in the short term. A 0.5695 test is on the cards if the currency remains above 0.5580, though a break through key resistance at 0.5760 is not expected in the short term. The New Zealand Dollar has probably settled versus the US Dollar, with NZD/USD likely to trade in the 0.5540-0.5760 range. A near-term 0.5695 test is on the cards if support at 0.5580 is maintained, though a break above 0.5760 is still not expected just yet. • The recent NZD/USD rebound indicates the earlier weakness is most likely stabilised. • NZD rose from the low point of 0.5485 to close strongly higher at 0.5650, rising 2.07% in a day. • The pair broke above strong resistance point of 0.5650, which is indicative of a change in short-term momentum. • NZD/USD can test 0.5695 if it holds above 0.5580. • Important support points to observe are at 0.5580 and 0.5620. • NZD/USD is likely to consolidate between 0.5540 and 0.5760 over the next few days and weeks. • In spite of recent strength, the key resistance at 0.5760 is unlikely to be broken in the near future. The New Zealand Dollar seems to have returned to stability following a volatile period, indicating a more stable phase in its performance. This is a welcome relief for traders and market observers who have tracked the currency’s recent fluctuations. Analysts at UOB Group believe that the current market sentiment regarding NZD has moved from bearish to neutral, with indications favoring a consolidation phase instead of sustained volatility. NZD/USD DAILY PRICE CHART CHART SOURCE: TradingView This change in tone implies that the wider market will now turn attention to other drivers such as economic data releases, global risk appetite, and central bank commentary. The removal of pressure on the NZD creates room for investors to reconsider their strategy and projections without the initial pressure of wild volatility. On balance, the environment is more neutral, and the currency is likely to fluctuate within a narrow range over the coming weeks. TECHNICAL ANALYSIS NZD/USD has made a strong recovery after it temporarily touched 0.5485, crossing above the significant resistance level at 0.5650. Such a breakout points to a possible change in momentum, meaning that the recent downtrend is likely over. The pair would now consolidate between 0.5540 and 0.5760, with weak support at 0.5580 and 0.5620. A short-term test of 0.5695 is conceivable if the levels of support are maintained, but the key resistance of 0.5760 will not be tested unless greater bullish momentum arises. FORECAST NZD/USD may continue to push higher moderately, particularly if it can find support just above 0.5580. The pair would move towards the next target of 0.5695 with the help of better market sentiment and technical support. With sustained buying interest, the higher end of the prevailing consolidation range at 0.5760 could be in view, although it should serve as a robust resistance in the short term. On the flip side, if NZD/USD fails to hold above 0.5580, it might unleash fresh selling pressure. Breaking below this level can drive the pair towards 0.5540, the lower boundary of the anticipated consolidation zone. Although the prior low of 0.5485 holds firm for the time being, any persistent weakness can re-open the way towards the crucial support level at 0.5450, which was recently a key level to monitor.

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Currencies

USD/CHF Remains Steady Around 0.8850 as Dollar Recovers and Swiss Franc Drops on Better Risk Mood

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  • March 24, 2025
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The USD/CHF currency pair remains steady around the 0.8850 level, underpinned by a recovery in the US Dollar on the back of increasing Treasury yields and a dovish Federal Reserve policy. In spite of ongoing fears of a slowdown in the US economy, the greenback is showing resilience in anticipation of the important S&P Global PMI release. At the same time, the Swiss Franc is under pressure downwards with improving global risk appetite and recent policy relaxation by the Swiss National Bank, which cut its key interest rate to 0.25%. Geopolitical events and changing trade policies also affect market forces, keeping investors’ eyes on the horizon for forthcoming economic indicators. KEY LOOKOUTS • Traders closely observe the initial US PMI figures for March, which would provide new information on the health of the US economy and have an impact on the direction of the USD. • Increasing yields on the 2-year and 10-year US bonds are driving the Dollar’s rebound — increased movements in yields will dictate short-term USD/CHF momentum. • Since the SNB rate cut to 0.25%, markets are closely looking at signs or signals regarding future direction of monetary policy and inflation in Switzerland. • Relief on easing geopolitical tensions and changes to US trade policy are lowering demand for safe-haven currencies such as the Swiss Franc — ongoing change in risk appetite could lead to further CHF weakness. The release of the US S&P Global PMI data for March later today will be key in determining the health of the US economy and influencing market sentiment regarding the Federal Reserve’s next steps. On top of this, increasing US Treasury yields remain supportive of the US Dollar, with any further movement set to affect the pair. Conversely, the recent 0.25% rate cut by the Swiss National Bank has put pressure on the Swiss Franc, with markets anticipating any policy guidance. In the meanwhile, a better global risk environment and deviously softening geopolitical tensions are suppressing demand for defensive currencies such as the CHF, possibly setting the stage for further USD/CHF gains. Traders look to the US S&P Global PMI, which may give new direction to USD/CHF. Higher US Treasury yields continue to underpin the Dollar, while the Swiss Franc is pressured after the SNB rate cut and better global risk appetite. • USD/CHF is trading around 0.8850, underpinned by a recovery in the US Dollar and higher Treasury yields. • US Dollar strengthens as market mood improves in spite of fears of an impending economic slowdown. • US S&P Global PMI for March is eagerly awaited and could shape further USD action. • Fed continues to have a hawkish stance, with Chair Powell reiterating strong labor markets and ongoing inflation threats. • Swiss Franc loses ground as risk appetite increases, diminishing demand for traditional safe-haven currencies. • Swiss National Bank lowered rates to 0.25%, a new low since September 2022, citing low inflation. • Geopolitical tensions reduce, and changing US trade policies further dampen CHF strength. The USD/CHF currency pair remains influenced by overall economic and geopolitical trends. The US Dollar remains robust as market optimism increases based on encouraging Federal Reserve signals and growing optimism over the US economy. Recent remarks by Fed Chair Jerome Powell emphasized a solid labor market and consistent movement toward inflation goals, which has bolstered investor confidence. Meanwhile, the next US economic data, especially the S&P Global PMI, will provide additional information on economic conditions and influence market expectations. USD/CHF Daily Price Chart Chart Source: TradingView Conversely, the Swiss Franc is under pressure as a result of better global risk appetite and recent policy moves by the Swiss National Bank (SNB). The SNB interest rate cut indicates its attempt to boost domestic economic activity in the face of low inflation. Also, softening geopolitical tensions and changing trade strategies are decreasing the demand for safe-haven currencies such as the Franc. As the world economic outlook improves, the demand for currencies such as the USD can be expected to increase further, influencing the trend of USD/CHF in the near future. TECHNICAL ANALYSIS USD/CHF remains bullish-biased as the pair consolidates above important support levels, reflecting consistent buying interest. The current upward momentum indicates that buyers are still in charge, with the pair holding firm around the 0.8850 region. If the price is able to hold above this support, then it could potentially set the stage for further bullish movement in the near future. Traders would need to look out for levels of resistance coming up ahead as well as observe any indication of reversal or consolidation that would change short-term sentiment in the markets. FORECAST  USD/CHF may witness additional gains, particularly if future US economic releases like the PMI reports are stronger than anticipated. Higher US Treasury yields and persistent Federal Reserve hawkishness might also continue to buoy the US Dollar in the near future. Increased investor optimism and lower Swiss Franc safe-haven demand might also contribute to the upward pressure, moving the pair towards higher resistance levels in the near future. On the other hand, if any disappointing economic data from the US or rising fears of any slowdown are indicated, the Dollar can be pushed down and force a pullback in USD/CHF. Moreover, in case the overall risk sentiment falters in the face of some unforeseen geopolitical events, the demand for safe-haven currencies such as the Swiss Franc can increase. A more robust CHF, in conjunction with uncertainty in the markets or a dovish change in Fed expectations, might result in a short-term correction or downward pressure on the pair.

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Currencies EUR/USD

EUR/USD Price Prediction: Bullish Trend Gains Momentum Above 1.0800 As Dollar Weakens

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  • March 24, 2025
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The EUR/USD currency pair is gaining strength once again above the 1.0800 level, driven by bullish technicals and a weakening US dollar. The pair has rallied in the early Asian trading session, spurred by fears of an economic slowdown in the US under President Donald Trump’s trade policies. Technically, the bullish bias is still in place as the price stays above the 100-day EMA, with the RSI continuing to indicate upward momentum. Important resistance is at 1.0955, with a possible move towards psychological level 1.1000, while short-term support is at 1.0775. Investors now look out for important PMI releases from the Eurozone, Germany, and the US for further direction. KEY LOOKOUTS • EUR/USD continues to be bullish as long as it holds above the 100-day Exponential Moving Average at the current vicinity of the 1.0600–1.0605 region. • 14-day RSI sitting above 59 reiterates high bullish pressure, with possible scope for higher prices. • Initial resistance comes at 1.0955 (March 18 high), then possibly challenging the 1.1000 psychological mark and 1.1111 Bollinger Band top level. • Traders will need to look out for Eurozone, German, and US PMI reports for March, which will likely be instrumental catalysts for the next move. Traders need to keep a close eye on significant technical and fundamental pointers while EUR/USD continues to trade in a bullish manner above the 100-day EMA. The 14-day RSI continues to hold strong near 59, reflecting continuous upward momentum in the near term. On the positive side, the initial resistance is present at 1.0955, followed by the psychological 1.1000 level and the top of the Bollinger Band at 1.1111. On the negative side, the first support comes at 1.0775, with the key support level at 1.0600–1.0605. Apart from this, future releases of PMI data for the Eurozone, Germany, and the US have the potential to be key market drivers, dictating the pair’s next trend direction. EUR/USD remains in a bullish tone above the 100-day EMA, with good RSI momentum. Major resistance is at 1.0955 and 1.1000, while support is at 1.0775. Traders look to the next Eurozone and US PMI releases for new directional signals. • EUR/USD bounces back above 1.0800, demonstrating strength in the early Asian session and ending a three-day losing streak. • The 100-day Exponential Moving Average (EMA) supports bullish momentum and maintains the overall technical scenario upbeat. • The 14-day Relative Strength Index (RSI) remains north of the midline at approximately 59.35, which reflects ongoing bullish inclination. • The immediate resistance markers to focus on are 1.0955 (March 18 high) and the psychological level of 1.1000, with deeper targets towards 1.1111. • The initial support is at 1.0775, and the critical support area is at 1.0600–1.0605 (100-day EMA and round figure area). • Underlying pressure on the US dollar continues as investors worry about economic slowdown due to President Donald Trump’s trade policies. • Major economic event risk in the near term includes PMI readings from the Eurozone, Germany, and the US, which may trigger the next significant move in the pair. The EUR/USD currency pair has continued to exhibit new strength as it rises higher in Monday’s Asian session, attributing to positive sentiment across the Eurozone. The recovery follows increasing fears of a possible US economic slowdown, sparked by factors that have begun to put pressure on the US dollar. Market participants are monitoring closely the international macroeconomic climate, especially the effect of US President Donald Trump’s trade policies that have created uncertainty among investors. This change in sentiment has made way for a favorable backdrop for the euro to pick up speed at the beginning of the week. EUR/USD Daily Price Chart Chart Source: TradingView Looking forward, traders are focusing their attention on key economic data releases, most notably preliminary Purchasing Managers Index (PMI) numbers for the Eurozone, Germany, and the US. These readings will provide new clues as to the vitality of business activity in these pivotal regions and could have an influence on investors’ expectations. With world markets still sensitive to economic data and policy cues, forthcoming data will be key in determining the general outlook for the EUR/USD pair. TECHNICAL ANALYSIS EUR/USD is bullish as it resists below key moving averages, indicating underlying strength in the trend. The duo’s position above the 100-day Exponential Moving Average (EMA) reflects persistent bullish sentiment, and the 14-day Relative Strength Index (RSI) is still above the midline, reflecting ongoing upward momentum. If the buying interest continues, the pair can slowly move towards higher resistance levels, and any downward movement will likely find support around recent lows. Overall, the technical setup favors a bullish bias in the near term. FORECAST EUR/USD will probable challenge the crucial resistance levels in the upcoming sessions. The initial level of resistance seems to be around the 1.0955 level, a recent high. A successful advance above this zone can set the stage for a move towards the psychological level of 1.1000. Additional gains here can push the pair towards 1.1111, the Bollinger Band upper boundary, indicating prolonged bullish outlook. Encouraging economic news from the Eurozone or additional US dollar weakness may serve as triggers for this move higher. Conversely, if selling mount, the initial level to look for is 1.0775, which was a recent low and is serving as immediate support. A decline below this level could prompt additional downturns towards the key support area of 1.0605–1.0600, which also coincides with the 100-day EMA. A prolonged dip below this zone may change the market mood and leave the pair vulnerable to further losses, the next target being about 1.0418. More robust than anticipated US economic numbers or dovish policy announcements might boost the bearish pressure.

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Currencies

USD/CAD Remains Flat Below 1.4350 On Fed Speculation and Canadian Politics

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  • March 24, 2025
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The USD/CAD currency pair begins the week cautiously trading just below the mid-1.4300s as conflicting market signals keep traders and investors nervous. While hopes of an eventual Fed rate cut dampen the US Dollar, lower Crude Oil prices and political instability in Canada—after Prime Minister Mark Carney demanded a snap election—cap the Canadian Dollar’s appreciation. In spite of intraday declines, the pair is still within last week’s range, indicating a lack of direction. With US PMI data and FOMC member speeches coming up, along with volatile oil prices, traders are waiting for new signals to decide the next direction in USD/CAD. KEY LOOKOUTS • Flash PMI prints and comments from prominent Federal Reserve members may steer short-term market sentiment and USD direction. • Short bets on an impending Fed rate-cut cycle are still a dominant force for USD movements and will keep influencing the trend in USD/CAD. • The surprise call for a snap election by Canadian Prime Minister Mark Carney injects uncertainty and could cap any sharp rise in the Canadian Dollar. • As a commodity-based currency, the CAD is still vulnerable to price movements in crude oil, so oil market fundamentals are an essential factor to monitor. Several factors affecting the USD/CAD in the short term need to be monitored closely by traders. Market interest will continue to be on US economic releases, specifically the flash PMI prints and Fed official speeches, which might provide new insights into the central bank’s monetary policy direction. Speculation over a possible Fed rate cut continues to pressure the US Dollar, while political tension in Canada after Prime Minister Mark Carney’s surprise election call might cap Canadian Dollar gains. Also, crude oil price volatility—considering CAD’s high correlation with oil—will be instrumental in determining the pair’s direction. Major areas of focus are future US PMI releases and FOMC speeches, which may influence USD sentiment. Speculation in the market regarding Fed rate cuts and Canada’s surprise election announcement may also impact USD/CAD movement. Also, oil price volatility is still important for the Loonie’s direction. • USD/CAD trades flat below the mid-1.4300s on mixed market signals. • Expectations of a Fed rate cut continue to bear down on the US Dollar. • Dovish Crude Oil prices constrain the Canadian Dollar’s rise. • Political risk increases with Canada’s PM announcing a snap election on April 28. • The market mood remains risk-averse with no definite directional bias. • The market waits for US flash PMI numbers and FOMC member speeches for new indications. • Price volatility in oil will continue to be a primary driver of USD/CAD direction. The USD/CAD pair is stable to start the new week, guided by a combination of economic and political events. Market participants closely monitor the situation unfolding in the US and Canada. On one side, the US Dollar is under pressure as there are growing hopes that the Federal Reserve might have rate cuts in the near term in view of economic slowdown concerns. On the other side, Canada’s political scenario has been given a fresh twist with Prime Minister Mark Carney declaring an unexpected election, raising doubts over future policy and investor sentiment towards the Canadian Dollar. USD/CAD Daily Price Chart Chart Source: TradingView Simultaneously, sentiment across broader markets is subdued as traders consider global economic indicators and geopolitical tensions. The Canadian Dollar, commonly sensitive to commodity prices, is also responding to oil price movements, which significantly determine its relative strength. In the near term, traders are likely to monitor closely the release of US economic data and speeches by Federal Reserve officials, which may provide more insight into the policy direction and its implications for currency movements. TECHNICAL ANALYSIS USD/CAD pair is range-bound, with prices staying just below the mid-1.4300s, indicating a lack of strong directional momentum. The pair has been able to bounce back from initial Asian session lows around 1.4325 but still trades in the wider range set last Friday. In spite of multiple attempts, the pair has failed to break convincingly above the 1.4400 resistance level, which suggests that buyers are reluctant without a definite bullish catalyst. On the negative side, support at the moment is around the 1.4300 level, and a persistent dip below this may draw in new selling interest. Until a break on either side happens, the pair will remain in this tight range, waiting for new impetus from economic news or political events. FORECAST Should market sentiment turn bullish for the US Dollar, perhaps in response to better-than-anticipated US economic news or more aggressive Federal Reserve rhetoric, USD/CAD may try to challenge the 1.4400 resistance level once again. A clear breakout above it may allow for additional upside, particularly if political uncertainty continues to pressure the Canadian Dollar. Also, if the price of oil continues to slide, it will add pressure to the Loonie, thereby supporting the trend in the USD/CAD to the upside. Conversely, in the event of Fed rate cut hopes gaining traction or if disappointing US data come out in the future, the US Dollar is likely to face fresh selling interest, causing USD/CAD to move lower. A drop below the 1.4300 support area may initiate additional weakness towards the 1.4260 or even 1.4200 levels. In addition, any improvement in Canada’s political scenario or a good bounce in crude oil prices might provide support to the Canadian Dollar, raising the risk of decline for the USD/CAD currency pair.

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Currencies GBP/USD

GBP/USD Remains Firm Near Multi-Month Highs Amid Fed-BoE Policy Divergence and USD Caution

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  • March 21, 2025
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The GBP/USD currency pair remains firm near multi-month highs around the mid-1.2900s, resolute in the face of a modest appreciation in the US Dollar. Though the Greenback does get some help from safe-haven flows due to geopolitical tensions and uncertainty over US trade policy, the contrasting monetary policy direction between the Federal Reserve and the Bank of England supports the British Pound. As the Fed is likely to reduce rates several times this year and the BoE is hinting at a more dovish stance, the broad inclination for GBP/USD is skewed to the higher side. Lacking any significant economic data releases, price action will probably remain range-bound, although any retracement may offer buying chances, leaving the pair on course to record a third straight weekly gain. KEY LOOKOUTS • Still holding firm above the mid-1.2900s despite intraday volatility, the pair remains near the multi-month high at over 1.3000 recorded on Thursday. • The Bank of England’s dovish approach to rate cuts is in contrast to the Fed’s expected easing, providing sustained support to the Pound. • The Greenback makes minor gains from multi-month lows on the back of geopolitical tensions and uncertainties over trade tariffs, but upside is still capped. • Without any significant economic releases on Friday, GBP/USD is likely to be guided by USD dynamics and overall market sentiment, leaving the pair skewed to the upside. The GBP/USD pair remains stuck close to multi-month highs, stabilizing above the 1.2950 mark and within touching distance of the psychological level of 1.3000 touched on Thursday. The action of the pair is still heavily dictated by varying monetary policy expectations between the Bank of England and the Federal Reserve. While the Fed has stuck to its rate cut forecast for 2025 and upgraded its inflation forecast, the BoE has been more conservative, indicating reduced rate cuts in the future. This policy divergence supports the British Pound, although a modest rebound in the US Dollar — fueled by geopolitical tensions and trade tariff uncertainty — limits the upside. With minimal economic data on the calendar, the emphasis is on general market sentiment and USD dynamics, which maintains the path of least resistance slightly favorable for the bulls. GBP/USD remains steady above 1.2950, within striking distance of the multi-month high around 1.3000 in the face of diverging Fed-BoE policy expectations. Although a marginal USD recovery caps upside, the Pound finds support in bets for delayed BoE rate cuts. Lacking in major data releases, USD motion and sentiment will shape short-term direction. • GBP/USD consolidates above 1.2950, remaining near the multi-month high breached above 1.3000 yesterday. • Failure of distinct intraday direction, with the pair ranging narrowly in and about the 1.2960 area in the Asian session. • Limited USD reversal from multi-month lows serves as short-term cap on additional GBP/USD upside. • Fed leaves rate cut forecasts in 2025 unchanged, but inflation fears and uncertainty on trade tariffs provide support to the US Dollar. • BoE indicates a reduced rate cut pace, providing relative strength to the British Pound in the face of differing monetary policies. • No significant economic data releases from the UK or US on Friday, maintaining attention on general sentiment and USD dynamics. • GBP/USD set for a third straight weekly gain, with any pullbacks expected to be viewed as buying opportunities by traders. The GBP/USD currency pair remains a mirror of the general macroeconomic climate influenced by divergent central bank policy and sentiment globally. The Bank of England’s conservative approach to rate cuts, coupled with its revision of inflation expectations higher, indicates a more hawkish stance relative to other major central banks. This has given the British Pound a sense of underlying support, particularly as the market readjusts around monetary easing timelines. Conversely, the Federal Reserve’s consistent prediction of rate cuts for 2025, supported by increasing US trade uncertainty and inflation worries, introduces a degree of complication into the wider outlook. GBP/USD Daily Price Chart Chart Source: TradingView Moreover, the lack of significant economic data releases has led the market to focus more on sentiment-driven influences and policy divergence themes. Investors are also carefully observing the international geopolitical environment, particularly possible trade policy shifts in the US, which will impact currency markets more broadly. Under such conditions, investor interest is focused on how central banks react to inflation trends and economic events in the future. TECHNICAL ANALYSIS GBP/USD remains stuck in a consolidative range following a recent probe of the pivotal psychological resistance at the 1.3000 level. The pair remains supported above the 1.2950 level, reflecting underlying bulls, with buying interest evident on minor declines. A break and hold above 1.3000 would make way for more upside in the near term, while any retracement might encounter initial support near the 1.2900-1.2920 range. The broader direction is still positive as long as the pair is above key moving averages and has higher lows on the chart. FORECAST As long as bullish sentiment prevails and the Pound is upheld by the Bank of England’s relatively hawkish policy, GBP/USD may target a firm breakout above the psychological 1.3000 level. A continued break above this hurdle could initiate new buying interest, driving the pair towards the next resistance levels of 1.3050 and 1.3100 in the near term. Favorable UK economic news over the next few weeks or any indication of a delay in the Fed’s rate-cut schedule could further boost the upside momentum. Conversely, if the US Dollar strengthens further on safe-haven demand or better-than-expected US data, then GBP/USD can face pressure. A break below the 1.2950 support level may result in a correction lower with the next significant support at 1.2900 followed by 1.2840. Any dovish hint from the BoE or change in global risk appetite may boost downhill movement and leave bulls on the defensive in the near term.

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Currencies

USD/CAD Rallies Back Over 1.4300 Ahead of Fed Rate Decision as Dollar Reverses Slightly and Oil Prices Lose Ground

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  • March 19, 2025
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The USD/CAD currency pair has mounted a rebound from its two-week low of 1.4260, rising back above the 1.4300 mark as market participants look forward to the much-awaited Federal Reserve policy meeting decision. A small recovery in the US Dollar from multi-month lows, together with softer crude oil prices, has given the pair support for the second day in a row. Gains are still capped, however, with investors holding back ahead of the Fed’s interest rate decision and economic forecasts, as well as closely monitoring Chair Jerome Powell’s rhetoric for guidance on the coming rate-cut direction. KEY LOOKOUTS • Market participants will be keeping a close eye on the Federal Reserve’s rate move and economic forecast, paying specific attention to any hints regarding the timing and rhythm of impending rate cuts. • The direction of the USD after the meeting will be important in deciding on the next move of USD/CAD, particularly if Powell sounds more dovish or hawkish than anticipated. • Being an oil-linked currency, the Canadian Dollar is still vulnerable to the movements in oil prices. Any additional weakness in crude oil may still drag the Loonie. • Rising tensions in the Middle East may have an impact on oil supply projections and risk appetite, which could in turn affect oil prices and safe-haven demand for the USD. With the USD/CAD currency pair trading just above the 1.4300 level, market attention continues to be squarely on the next Federal Reserve policy announcement, which is set to give the US Dollar new guidance. Traders will be keenly listening to Fed Chair Jerome Powell’s comments and the revised economic forecasts for hints on the central bank’s future rate-cut trajectory. In the meantime, any substantial move in crude oil prices would impact the Canadian Dollar, as it strongly correlates with oil. Further, tensions in the Middle East are also a possible risk factor that can affect market sentiment and commodity prices, thus impacting the near-term USD/CAD course. USD/CAD remains above 1.4300 prior to the Fed policy announcement, helped by a small US Dollar recovery and lower oil prices. Market focus now centers around Jerome Powell’s remarks for insights into upcoming rate cuts, with geopolitical tensions and oil price actions continuing as main driving factors. • USD/CAD recovers above 1.4300 from a two-week low just below 1.4260. • Small US Dollar recovery from multi-month lows helps the pair. • Traders stay on guard in anticipation of the pivotal Federal Reserve policy announcement. • Fed likely to leave rates steady; attention turns to economic projections and Powell’s comments. • Impending rate-cut indications from the Fed may have a profound impact on USD direction. • Weakening crude oil prices deter the Canadian Dollar, facilitating USD/CAD gains. • Middle East geopolitical tensions may affect oil prices and risk mood, which can impact the pair. The USD/CAD currency pair is in the limelight as markets globally await the outcome of the closely watched Federal Reserve policy meeting. As no interest-rate change is anticipated, investors are following keenly the Fed’s revised economic forecast and comments from Chair Jerome Powell. These observations will prove to be pivotal in determining the central bank’s attitude towards upcoming monetary policy, especially in context to future interest rate reductions later this year. The result of this meeting is expected to influence overall market sentiment and direct currency movements in the subsequent sessions. USD/CAD Daily Price Chart Chart Source: TradingView While meanwhile, wider economic conditions still influence the USD/CAD forecast. Oil prices, which heavily influence the Canadian economy, have been revealing their volatility, providing another source of uncertainty. Furthermore, heightened tensions in the Middle East are closely watched, as they have the potential to affect global energy markets and investor mood. Since there are more than one factor involved, market players are walking on eggshells, waiting for more definitive indications before making firm actions. TECHNICAL ANALYSIS USD/CAD has been able to bounce from the recent support level around 1.4260, showing buying interest at lower levels. The pair recovering above the 1.4300 level shows a possible short-term bullish tilt, although the momentum is moderate. Traders will be monitoring a sustained move above this level to confirm further upside potential. On the negative side, if the pair cannot remain above 1.4300, it will go back to the recent support zone, whereas resistance levels at 1.4350 and 1.4380 may prove to be obstacles for any potential rise. FORECAST In case the Federal Reserve retains a dovish tone and avoids any indication of near-term rate cuts, the US Dollar is likely to move even higher, possibly taking USD/CAD up. A strong push through the 1.4300 level can create space for the pair to challenge the subsequent resistance levels at 1.4350 and 1.4380. Further deterioration in crude oil prices can also fuel upside movement in the pair, as the Canadian Dollar remains highly sensitive to movements in the oil market. An aggressive bullish break can even lead to a run-up to the 1.4400 area in the short term. Conversely, if the Fed indicates a dovish turn or suggests rate cuts earlier than anticipated, the US Dollar can come under fresh pressure, and that would initiate a decline in USD/CAD. A breakdown below the 1.4260 support could speed up selling pressure, taking the pair down to 1.4220 or even lower. Furthermore, any sudden surge in crude oil prices or de-escalation of geopolitical tensions would bolster the Canadian Dollar, leading to further losses for the pair.

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Currencies EUR/USD

EUR/USD Falls Below 1.0950 as Fed Decision Approaches Amid Strength in Dollar and Eurozone Trends

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  • March 19, 2025
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The EUR/USD crossed below the level of 1.0950 during Wednesday morning’s Asian trading, staying at around 1.0935 as market participants take a guarded approach ahead of the U.S. Federal Reserve interest rate determination. The U.S. Dollar received mild lift from more solid industrial production, contributing to traders’ expectation amid the Fed’s revised rate guidance and economic report. Although the central bank is expected to leave interest rates on hold, the press conference and dot-plot that accompany it could provide key policy guidance. Separately, a large spending budget passed by Germany’s parliament could support the Euro, indicating increased investment activity in the Eurozone’s largest economy. KEY LOOKOUTS • Markets watch for the Fed’s rate move and economic forecasts, which will determine the tone of USD movement going forward. • Robust US industrial production figures support the Dollar; additional strength could put pressure on EUR/USD below significant support levels. • Bundestag approval of a significant spending increase could underpin the Euro and restore investor confidence in the Eurozone economy. • Traders are cautious ahead of Fed commentary; increased volatility anticipated after the decision, affecting short-term EUR/USD direction. As the EUR/USD currency pair declines below 1.0950 in anticipation of the highly expected Federal Reserve interest rate decision, market players are keenly observing major events that may influence the near-term direction. The US Dollar has strengthened after positive industrial production figures, increasing hopes for a more aggressive Fed policy. Investors will closely monitor the Fed’s revised economic forecasts and the dot-plot, which may provide key information on the rate path ahead. In the meantime, Germany’s approval of a huge spending budget brings a possible Euro boost, signaling fresh fiscal support for the Eurozone’s biggest economy. Overall, sentiment is still wary, with volatility set to spike after the Fed announcement. EUR/USD falls below 1.0950 as traders wait for the Federal Reserve to make its interest rate decision and revise its economic forecasts. The stronger US Dollar and Germany’s recently approved budget plan are significant drivers of the pair’s movement. Volatility is likely to increase after the Fed announcement. • EUR/USD falls to about 1.0935 during Wednesday’s Asian session, falling below the 1.0950 mark. • Investors stay on guard in anticipation of the Federal Reserve interest rate announcement and economic forecasts later today. • The Fed will likely keep interest rates unchanged, but the dot-plot and press conference can give hints of future policy directions. • US Dollar appreciates slight strength as underpinned by better-than-expected US industrial production data for February (+0.7% MoM). • Germany’s parliament sanctioned a big spending spree, a sign of possible economic recovery in the Eurozone’s biggest economy. • Market sentiment remains divided, with investors in wait-and-watch mode following the Fed announcement. • Greater volatility anticipated in EUR/USD in the wake of the Fed verdict and reports on inflation projections. The foreign exchange market is in wait-and-watch mode with international investors awaiting the coming interest rate verdict of the U.S. Federal Reserve. Though the central bank is mostly expected to leave interest rates as they are, everyone is looking forward to the press conference and new economic projections for clues on the course of future monetary policy. The latest release of robust industrial production numbers in the U.S. has contributed to the expectation, signaling strength in the economy and adding to further interest in the central bank’s inflation and growth outlook. EUR/USD Daily Price Chart Chart Source: TradingView In the meantime, European developments have ushered in a tide of optimism, as Germany’s parliament passed a big-ticket spending plan designed to spur investment. The action is likely to underpin economic recovery efforts in the Eurozone’s biggest economy and potentially bolster market confidence in the region’s growth prospects. With traders waiting on the sidelines for key policy signals, the overall market tone is set by the interplay between U.S. economic vigor and Europe’s revived fiscal efforts. TECHNICAL ANALYSIS EUR/USD is picking up signs of mild weakness following its fall below the 1.0950 level, reflecting cautious market sentiment pre-Fed decision. The pair is now trading close to 1.0935, with near-term support at the 1.0900 psychological level. A break through this region may pave the way for further bear pressure. On the higher side, resistance is expected to be encountered in the 1.0975–1.1000 area, where sellers are likely to re-enter. Overall, the price action indicates a consolidation period, with investors waiting for a clear direction of breakout after major economic indicators from the U.S. Federal Reserve. FORECAST If the U.S. Federal Reserve keeps its policy statement and economic forecasts neutral or dovish, it may cap further gains in the U.S. Dollar. In this context, the Euro could find footing, particularly with Germany’s freshly approved budget plan set to fuel economic sentiment in the Eurozone. Better fiscal prospects in Europe could provide a supportive environment for the EUR/USD pair to move higher if global risk appetite also improves. Conversely, if the Fed hints at a more aggressive policy—i.e., the likelihood of rate hikes or a less aggressive sequence of easing—then the U.S. Dollar will likely pick up even more steam. This will potentially put downward pressure on the Euro, sending EUR/USD lower over the short run. Also, if future Eurozone data does not indicate a robust recovery in spite of Germany’s budget stimulus, market faith in the Euro will further deteriorate, exacerbating the downside risk.

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