EUR / USD
EUR/USD faced mounting pressure as the Federal Reserve maintained rates at 4.25-4.50% while simultaneously lowering GDP forecasts and raising inflation expectations, creating a complex monetary policy environment. Recent trading activity shows the pair retreating from five-month highs near 1.0950, influenced by the Fed's cautious stance and impending US trade policies.
The European Central Bank's downward revision of inflation figures to 2.3% marks a diverging inflation trajectory compared to the US, while signs of cooling in the eurozone economy could limit the euro's upside potential despite Germany's fiscal stimulus efforts. Technical analysis reveals the pair consolidating below key resistance at 1.0950, with significant support levels emerging at 1.086 and the 200-day moving average at 1.0725.
A bullish scenario could materialize if buyers maintain momentum above 1.090, while a breakdown below 1.080 could trigger a deeper correction toward the 200-day moving average.
USD / JPY
USD/JPY weakened as the Bank of Japan maintained its cautious monetary stance, keeping interest rates at 0.5% amid global economic uncertainties and concerns about US trade policies. Governor Ueda's specific concerns about potential US auto tariffs, which could reduce Japan's GDP by 0.33%, have contributed to the currency pair's recent downward trajectory from 149.32 to 148.72.
Despite Japan's domestic strength, evidenced by wage growth reaching a 34-year high of 5.46% and a shift to trade surplus in February, with exports rising 11.4% year-over-year, the BOJ remains hesitant to accelerate its tightening cycle. Technical indicators reveal bearish sentiment as the price remains below major moving averages, with the 150.00 level serving as a formidable resistance level.
The pair's outlook is further complicated by the Federal Reserve's decision to hold rates steady while flagging growth and persistent inflation concerns. The immediate technical outlook suggests that bears could push toward the support level at 146.75 if the current weakness persists below the 20-day moving average.
GBP / USD
GBP/USD is currently navigating a complex market environment, with the pair trading near 1.30 after reaching a 2025 high, showing remarkable resilience despite various market pressures. Technical indicators suggest a potentially overbought condition, with the RSI reading at 71.8, while the convergence of the 20-day and 200-day moving averages at 1.28 provides a significant technical reference point.
The pair's immediate trajectory appears heavily influenced by pending central bank decisions, with the Bank of England's upcoming announcements likely to hold interest rates steady. The Fed's decision to keep interest rates unchanged at 4.25-4.50% and their concerns surrounding inflation weighed on the dollar's strength later on in the day.
Market sentiment toward sterling maintains a cautiously positive bias, supported by the UK's relatively stable economic performance, though external uncertainties, particularly regarding US trade policies and their inflationary impact, pose considerable risks. The technical outlook suggests the potential for further upside movement if the pair maintains its position above 1.30, with resistance at 1.3010 serving as a key level to watch.
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