EUR / USD
EUR/USD continued to face upward pressures, as the pair struggled above the 1.0500 level once again. Recent German economic data reveals concerning weakness, with consumer confidence hitting an 11-month low of -24.7 in March. Germany's consideration of a substantial 200-billion-euro emergency fund and potential debt brake reforms could provide much-needed fiscal support, though uncertainty remains around implementation timing and effectiveness.
The ECB's monetary policy stance has become increasingly complex, with key officials like Isabel Schnabel suggesting a more cautious approach to rate cuts. Meanwhile, the US dollar maintains relative strength despite mixed economic signals, supported by House Republicans' ambitious $4.5 trillion tax cut proposal, though tempered by disappointing housing market data and weakening consumer sentiment.
From a technical perspective, EUR/USD shows consolidation near the 1.05 level, with significant resistance at 1.052 and support at 1.036. Market positioning suggests increased expectations for Federal Reserve rate cuts, with projections of approximately 60 basis points in reductions by year-end, which could ultimately weaken the dollar's position in the longer term.
EUR/USD’s trajectory will likely continue to retest near-term resistance level, with technical levels at 1.052 and 1.036 serving as key markers for directional moves.
USD / JPY
USD/JPY edged lower as markets continue to digest the BOJ’s path of policy normalisation, with inflation data strengthening the case for potential rate hikes in 2025. While the substantial interest rate differential between the US and Japan currently supports dollar strength, this advantage may diminish as the BoJ moves closer to abandoning its negative rate policy.
The technical landscape reveals significant resistance levels at 154.42 and 152.46, while the psychological support at 148.65 remains crucial for near-term price action. Recent weakness in US economic indicators, particularly disappointing consumer confidence data, has intensified downward pressure on the pair by fuelling expectations of earlier Federal Reserve rate cuts.
A bullish reversal would require buyers to reclaim the 150 level, while sustained weakness could trigger further decline toward the 147.50 region.
GBP / USD
GBP/USD broke above the robust 100 DMA resistance level, closing the day higher at 1.2684.
The technical landscape shows GBP/USD trading between key levels, with resistance at 1.27 and support from 1.26. The BOE's cautious stance, particularly regarding potential U.S. trade tariffs and their limited inflationary impact on the UK economy, adds resilience to the sterling.
While the Fed's anticipated rate cuts of approximately 60 basis points by year-end could theoretically weaken the dollar, persistent global uncertainties continue to support its strength in the meantime. A decisive break above 1.27could target new highs. We expect the pair to continue to gain momentum in the near term.
Economic Calendar
