Major currency pairs are exhibiting volatility in Friday’s Asian session amid evolving global trade dynamics and central bank policy expectations. Uncertainty surrounding US-China trade negotiations, mixed economic indicators, and dovish signals from major central banks are influencing movements in key currency pairs including EUR/USD, GBP/USD, USD/JPY, and AUD/USD.
KEY HIGHLIGHTS
- EUR/USD slips below 1.1400 amid trade tensions, ECB caution.
- GBP/USD dips near 1.3300 on weak UK confidence data.
- USD/JPY climbs as risk appetite rises on trade optimism.
- AUD/USD strengthens as China considers tariff pause on US goods.
EUR/USD: Slips Below 1.1400 as Trade Uncertainty Dominates
Market Overview
The EUR/USD pair dipped toward 1.1380 during early Asian trading hours on Friday. Although downside risks persist, continued tensions between the US and China are limiting losses.
- Investors await the final Michigan Consumer Sentiment data due later in the day.
- President Trump confirmed ongoing trade discussions with China, while Beijing denied current negotiations, urging removal of unilateral US tariffs.
- Persistent trade uncertainty may keep pressure on the USD, providing limited support for the euro in the short term.
- In the Eurozone, growing expectations for a June rate cut by the ECB are weighing on the euro.
- ECB official Olli Rehn emphasized the possibility of a “larger interest rate cut.”
- ECB’s Madis Muller suggested further rate cuts may be needed if trade risks intensify.
Technical Overview
Moving Averages
Exponential:
- MA 10: 1.1323 – Positive Crossover – Bullish
- MA 20: 1.1208 – Positive Crossover – Bullish
- MA 50: 1.0963 – Positive Crossover – Bullish
Simple:
- MA 10: 1.1370 – Negative Crossover – Bearish
- MA 20: 1.1176 – Positive Crossover – Bullish
- MA 50: 1.0886 – Positive Crossover – Bullish
Momentum Indicators
- RSI: 60.79 – Buy Zone – Bullish
- Stochastic Oscillator: 67.21 – Buy Zone – Neutral
Key Levels
- Resistance: R1 – 1.0938 | R2 – 1.1074
- Support: S1 – 1.0495 | S2 – 1.0358
Trade Setup
- Trade Suggestion: Limit Buy at 1.1211
- Take Profit: 1.1482
- Stop Loss: 1.1059
GBP/USD: Dips Below 1.3300 Ahead of UK Retail Sales
Market Overview
The GBP/USD pair trades near 1.3290, retracing from recent highs during Friday’s Asian session.
- Declining UK Consumer Confidence (GfK index fell to -23) and rising living costs are pressuring the pound.
- Eyes are on UK Retail Sales data and US Michigan Consumer Sentiment, both due later today.
- Renewed USD strength also weighs on GBP/USD following reports that China may suspend tariffs on selected US goods.
- Optimism in US-Asia trade discussions (South Korea, Japan) has supported USD gains.
- Mixed US labor data slightly capped the USD’s rise:
- Initial Jobless Claims rose to 222,000
- Continuing Claims fell by 37,000 to 1.841 million
Technical Overview
Moving Averages
Exponential:
- MA 10: 1.3239 – Positive Crossover – Bullish
- MA 20: 1.3143 – Positive Crossover – Bullish
- MA 50: 1.2961 – Positive Crossover – Bullish
Simple:
- MA 10: 1.3274 – Positive Crossover – Bullish
- MA 20: 1.3095 – Positive Crossover – Bullish
- MA 50: 1.2930 – Positive Crossover – Bullish
Momentum Indicators
- RSI: 61.53 – Buy Zone – Bullish
- Stochastic Oscillator: 81.12 – Buy Zone – Neutral
Key Levels
- Resistance: R1 – 1.3003 | R2 – 1.3106
- Support: S1 – 1.2668 | S2 – 1.2565
Trade Setup
Trade Suggestion: Limit Buy at 1.3142
Take Profit: 1.3425
Stop Loss: 1.3001
USD/JPY: Yen Slides to Two-Week Low Amid Trade Optimism
Market Overview
The USD/JPY pair continues to advance, reaching a near two-week high during Friday’s Asian trading session.
- Diminished demand for the safe-haven yen follows optimism over easing US-China trade tensions.
- Strength in the USD is pushing the pair further above 143.50.
- Tokyo’s April inflation data supports BoJ rate hike expectations.
- Contrasting signals from the Fed regarding possible rate cuts may limit the USD’s upside.
Technical Overview
Moving Averages
Exponential:
- MA 10: 143.2256 – Positive Crossover – Bullish
- MA 20: 144.4813 – Negative Crossover – Bearish
- MA 50: 147.2383 – Negative Crossover – Bearish
Simple:
- MA 10: 142.5373 – Positive Crossover – Bullish
- MA 20: 144.7907 – Negative Crossover – Bearish
- MA 50: 147.5632 – Negative Crossover – Bearish
Momentum Indicators
- RSI: 43.67 – Neutral Zone – Neutral
- Stochastic Oscillator: 39.36 – Sell Zone – Neutral
Key Levels
- Resistance: R1 – 151.0629 | R2 – 152.1861
- Support: S1 – 147.4271 | S2 – 146.3039
Trade Setup
- Trade Suggestion: Limit Sell at 144.31
- Take Profit: 142.28
- Stop Loss: 145.78
AUD/USD: Extends Gains on Chinese Tariff Suspension Hopes
Market Overview
The AUD/USD pair rallies for a second straight session, supported by potential easing of trade tensions between the US and China.
- Bloomberg reports that China may suspend its 125% tariffs on key US imports.
- Despite the positive momentum, AUD remains sensitive to the broader trade narrative due to Australia’s economic reliance on China.
- RBA policy expectations remain dovish with Westpac forecasting a 25bps rate cut on May 20.
Technical Overview
Moving Averages
Exponential:
- MA 10: 0.6354 – Positive Crossover – Bullish
- MA 20: 0.6318 – Positive Crossover – Bullish
- MA 50: 0.6298 – Positive Crossover – Bullish
Simple:
- MA 10: 0.6372 – Positive Crossover – Bullish
- MA 20: 0.6273 – Positive Crossover – Bullish
- MA 50: 0.6295 – Positive Crossover – Bullish
Momentum Indicators
- RSI: 57.66 – Buy Zone – Bullish
- Stochastic Oscillator: 89.57 – Buy Zone – Neutral
Key Levels
- Resistance: R1 – 0.6352 | R2 – 0.6400
- Support: S1 – 0.6196 | S2 – 0.6148
Trade Setup
- Trade Suggestion: Limit Buy at 0.6369
- Take Profit: 0.6439
- Stop Loss: 0.6331
Elsewhere in the Forex Market
- USD/CHF up 0.76% to 0.8330
- USD/CAD up 0.2% to 1.3884
- EUR/GBP down 0.05% at 0.8530
- EUR/AUD down 0.22% at 1.7731
- AUD/NZD up 0.28% at 1.0718
- USD/CNY up 0.01% at 7.2881
- AUD/SEK up 0.19% at 6.1658
Key Economic Events & Data Releases Today
United Kingdom (GBP)
- Core Retail Sales (YoY) – March
- Forecast: 2.2%
- Previous: 2.2%
- Time: 11:30
- Retail Sales (YoY) – March
- Forecast: 1.8%
- Previous: 2.2%
- Time: 11:30
Canada (CAD)
- Core Retail Sales (MoM) – February
- Forecast: -0.1%
- Previous: 0.2%
- Time: 18:00
- Retail Sales (MoM) – February
- Forecast: -0.4%
- Previous: -0.6%
- Time: 18:00