EUR / USD
EUR/USD held its nerve yesterday, as the European Central Bank and Federal Reserve pursue divergent monetary policies, with the ECB signalling potential rate cuts while the Fed maintains a more hawkish stance amid inflation concerns. Recent US economic data revealed weaker-than-expected producer prices, though this hasn't swayed the Fed from its cautious policy position.
Technical analysis indicates the currency pair is maintaining a position above the crucial 50-day moving average at 1.11, with significant resistance levels at the 20-day and 30-day moving averages around 1.13.
The pair's near-term trajectory appears heavily dependent on technical support and resistance levels, with the 50 SMA serving as a crucial support for the euro in the meantime.
USD / JPY
USD/JPY continued to weaken, as the pair was seen approaching the key 145 support level. Japan's economic landscape presents mixed signals, with Q1 GDP expected to contract by 0.2%, marking the first decline in a year. Recent trading sessions have shown modest volatility, with the pair consolidating near 146, now below the 50-day moving average of 146.13.
Technical analysis indicates a potential bearish scenario if prices breach below 145. Foreign investors' reduced exposure to US assets, driven by concerns about US public finances and potential budget deficit expansion beyond 7% of GDP, further compounds the downward pressure on the currency pair.
The pair's positioning between the 20-day moving average of 144.26 and the 50-day moving average of 1461.3 suggests a period of consolidation, with a possible bullish reversal only if prices break above the resistance level at 149.
GBP / USD
GBP/USD continued to demonstrate resilience, holding above the 1.32 threshold, following the UK's stronger-than-expected Q1 2025 GDP growth of 0.7%, which surpassed both market expectations and the Bank of England's projections. However, the mixed signals from the UK labour market, including rising unemployment at 4.5% and moderating wage growth at 5.5%, combined with softer US economic data, have contributed to the pair's contained volatility within a 0.36% range.
The 1.32 mark has emerged as a crucial pivot point, with technical analysis suggesting that a breakthrough above 1.34 could catalyse momentum toward 1.35. However, we expect the pair to hover in the current range in the meantime.
Economic Calendar
