Major currency pairs are trading cautiously on Thursday, driven by shifting U.S. trade policy signals, Federal Reserve uncertainty, and evolving political developments. The U.S. Dollar remains steady, while EUR/USD, GBP/USD, USD/JPY, and NZD/USD continue to move within narrow ranges amid mixed global cues.
KEY HIGHLIGHTS
- EUR/USD Steady Amid Fed Uncertainty and EU Political Stability
- GBP/USD Rises on Hopes for US-UK Trade Agreement
- USD/JPY Climbs as Safe-Haven Yen Weakens on Trade Hopes
- NZD/USD Recovers Slightly Amid US-China Trade Deal Optimism
EUR/USD: Stability Above 1.1300 Amid Political and Trade Uncertainty
EUR/USD holds steady above the 1.1300 mark during the Asian session, recovering modestly from an overnight dip. Market participants remain cautious as the pair fluctuates within a tight range near the 1.1375–1.1380 resistance level.
Key Drivers
- Political Stability in Germany: Friedrich Merz’s election as Germany’s Chancellor reduces Eurozone political risk, mildly supporting the Euro.
- Federal Reserve Outlook: The Fed paused rate hikes on Wednesday, maintaining a cautious stance amid trade policy uncertainty. Chair Powell emphasized a wait-and-see approach on tariffs.
- Trade Concerns: Persistent uncertainty surrounding President Trump’s tariff strategy weighs on USD sentiment.
- EU-US Trade Tensions: EU’s consideration of Boeing-related tariffs adds to the risk of broader trade conflict.
Technical Overview
Moving Averages
- Exponential:
- MA 10: 1.1322 – Bearish (Negative Crossover)
- MA 20: 1.1280 – Bullish (Positive Crossover)
- MA 50: 1.1075 – Bullish (Positive Crossover)
- Simple:
- MA 10: 1.1336 – Bearish (Negative Crossover)
- MA 20: 1.1354 – Bearish (Negative Crossover)
- MA 50: 1.1043 – Bullish (Positive Crossover)
Indicators
- RSI: 53.96 – Bullish (Buy Zone)
- Stochastic Oscillator: 18.36 – Neutral (Sell Zone)
Key Levels
- Resistance: R1: 1.1530 | R2: 1.1718
- Support: S1: 1.0923 | S2: 1.0735
Market Sentiment: Neutral
Market Direction: Buy
Trade Suggestion:
- Limit Buy: 1.1219
- Take Profit: 1.1437
- Stop Loss: 1.1107
GBP/USD: Gains Toward 1.3350 on Trade Optimism
GBP/USD rises to 1.3340 during Thursday’s Asian session, supported by renewed optimism over a potential U.S.-UK trade agreement and weakening USD.
Key Drivers
- Trade Deal Speculation: Market expects a potential trade deal announcement between the U.S. and UK.
- Dollar Pullback: DXY slips from earlier gains as the Fed maintains its cautious tone.
- Fed’s Stance: Despite a rate pause, the Fed warns of rising inflation and unemployment risks.
Technical Overview
Moving Averages
- Exponential:
- MA 10: 1.3300 – Bearish (Negative Crossover)
- MA 20: 1.3248 – Bullish (Positive Crossover)
- MA 50: 1.3071 – Bullish (Positive Crossover)
- Simple:
- MA 10: 1.3324 – Bearish (Negative Crossover)
- MA 20: 1.3290 – Bearish (Negative Crossover)
- MA 50: 1.3056 – Bullish (Positive Crossover)
Indicators
- RSI: 55.15 – Bullish (Buy Zone)
- Stochastic Oscillator: 39.58 – Neutral (Sell Zone)
Key Levels
- Resistance: R1: 1.3439 | R2: 1.3613
- Support: S1: 1.2878 | S2: 1.2704
Market Sentiment: Neutral
Market Direction: Buy
Trade Suggestion:
- Limit Buy: 1.3204
- Take Profit: 1.3401
- Stop Loss: 1.3102
USD/JPY: Yen Weakens on Risk Sentiment and Hawkish Fed Pause
USD/JPY rises to the mid-144.00s as the Japanese Yen continues to weaken due to improved risk sentiment and a steady Fed policy outlook.
Key Drivers
- Reduced Safe-Haven Demand: Market optimism around US-China trade talks reduces demand for the Yen.
- Fed Support for USD: The Fed’s hawkish pause reinforces support for the dollar.
- BoJ Outlook: The Bank of Japan remains open to policy tightening if inflation and growth targets are sustained.
- Geopolitical Risks: Global tensions continue to offer some underlying support to the Yen.
Technical Overview
Moving Averages
- Exponential:
- MA 10: 143.63 – Bullish (Positive Crossover)
- MA 20: 143.97 – Bullish (Positive Crossover)
- MA 50: 146.12 – Bearish (Negative Crossover)
- Simple:
- MA 10: 143.53 – Bullish (Positive Crossover)
- MA 20: 143.02 – Bullish (Positive Crossover)
- MA 50: 146.37 – Bearish (Negative Crossover)
Indicators
- RSI: 49.63 – Neutral
- Stochastic Oscillator: 60.01 – Neutral
Key Levels
- Resistance: R1: 148.49 | R2: 150.99
- Support: S1: 140.39 | S2: 137.88
Market Sentiment: Neutral
Market Direction: Sell
Trade Suggestion:
- Limit Sell: 144.65
- Take Profit: 142.90
- Stop Loss: 146.01
NZD/USD: Recovery Near 0.5950 on Trade Talk Hopes
NZD/USD trades around 0.5950 during Thursday’s Asian session, rebounding from a sharp previous-day decline, buoyed by improving trade sentiment and supportive Chinese policies.
Key Drivers
- US-China Trade Talks: Upcoming talks in Switzerland renew optimism for progress.
- China Stimulus: Beijing’s increased economic support benefits New Zealand’s export-driven economy.
- RBNZ Concerns: Governor Hawkesby highlights the risks from U.S. tariffs and weak labor data.
- Fed Uncertainty: Despite a steady rate, the Fed highlights rising inflation and employment risks.
Technical Overview
Moving Averages
- Exponential:
- MA 10: 0.5943 – Bearish (Negative Crossover)
- MA 20: 0.5911 – Bullish (Positive Crossover)
- MA 50: 0.5833 – Bullish (Positive Crossover)
- Simple:
- MA 10: 0.5948 – Bearish (Negative Crossover)
- MA 20: 0.5939 – Bearish (Negative Crossover)
- MA 50: 0.5797 – Bullish (Positive Crossover)
Indicators
- RSI: 53.83 – Bullish (Buy Zone)
- Stochastic Oscillator: 46.19 – Neutral
Key Levels
- Resistance: R1: 0.6024 | R2: 0.6152
- Support: S1: 0.5609 | S2: 0.5480
Market Sentiment: Bullish
Market Direction: Buy
Trade Suggestion:
- Limit Buy: 0.5893
- Take Profit: 0.6005
- Stop Loss: 0.5829
Other Forex Market Movements
- USD/CAD: +0.22% at 1.3868
- AUD/USD: -0.12% at 0.6417
- EUR/GBP: -0.03% at 0.8500
- EUR/AUD: +0.04% at 1.7595
- AUD/NZD: +0.13% at 1.0829
- USD/CNY: +0.15% at 7.2355
- AUD/SEK: +0.04% at 6.2139
Key Economic Events – May 7, 2025
- GBP: BoE Interest Rate Decision (May)
- Forecast: 4.25%
- Previous: 4.50%
- Time: 16:30 GMT
- USD: Initial Jobless Claims
- Forecast: 231K
- Previous: 241K
- Time: 18:00 GMT