The US Dollar extended its gains against major currency pairs on Tuesday, driven by optimism surrounding US-China trade developments and evolving central bank expectations. Key currency pairs including EUR/USD, GBP/USD, NZD/USD, and USD/CAD responded to regional economic indicators and geopolitical developments. Market participants now turn their attention to midweek economic data and central bank speeches for further direction.
KEY HIGHLIGHTS
- EUR/USD pressured below 1.1400 as USD strengthens further.
- GBP/USD dips below 1.3450 ahead of BoE speech.
- NZD/USD slips to 0.5950 on mixed trade signals.
- USD/CAD holds 1.3850 after Canada election uncertainty.
EUR/USD: Euro Under Pressure Amid ECB Rate Cut Expectations
Market Overview
EUR/USD remained under pressure below the 1.1400 level during Tuesday’s European session, as the Euro weakened on expectations of further interest rate cuts from the European Central Bank (ECB).
- The US Dollar was buoyed by optimism over progress in trade negotiations with key global partners.
- Investors exhibited lower interest in selling the Dollar as hopes grew for easing trade tensions.
- Dovish comments from US Federal Reserve officials provided modest support to the Greenback.
- Limited macroeconomic releases are keeping EUR/USD movement subdued ahead of key US and Eurozone data releases midweek.
Technical Overview
Moving Averages
Exponential:
- MA 10: 1.1355 – Bullish
- MA 20: 1.1247 – Bullish
- MA 50: 1.0998 – Bullish
Simple:
- MA 10: 1.1392 – Bullish
- MA 20: 1.1238 – Bullish
- MA 50: 1.0924 – Bullish
Indicators
- RSI: 63.55 – Buy Zone | Bullish
- Stochastic Oscillator: 72.69 – Buy Zone | Neutral
Key Levels
- Resistance: R1: 1.0938 | R2: 1.1074
- Support: S1: 1.0495 | S2: 1.0358
Overall Sentiment: Bullish
Market Direction: Buy
Trade Suggestion:
- Entry (Limit Buy): 1.1369
- Take Profit: 1.1490
- Stop Loss: 1.1304
GBP/USD: Sterling Slips Below 1.3450 Ahead of BoE Commentary
Market Overview
GBP/USD moved lower toward 1.3425 during Tuesday’s Asian session as the US Dollar strengthened slightly.
- Market participants are focused on a scheduled speech by BoE policymaker Dave Ramsden for future monetary guidance.
- The US Dollar continues to benefit from easing trade tensions, as China lifted some tariffs on US goods.
- The UK Pound remains subdued as expectations grow for a 25 basis point rate cut by the Bank of England in May.
Technical Overview
Moving Averages
Exponential:
- MA 10: 1.3304 – Bullish
- MA 20: 1.3197 – Bullish
- MA 50: 1.2997 – Bullish
Simple:
- MA 10: 1.3321 – Bullish
- MA 20: 1.3148 – Bullish
- MA 50: 1.2963 – Bullish
Indicators
- RSI: 66.81 – Buy Zone | Bullish
- Stochastic Oscillator: 92.54 – Buy Zone | Neutral
Key Levels
- Resistance: R1: 1.3003 | R2: 1.3106
- Support: S1: 1.2668 | S2: 1.2565
Overall Sentiment: Bullish
Market Direction: Buy
Trade Suggestion:
- Entry (Limit Buy): 1.3338
- Take Profit: 1.3445
- Stop Loss: 1.3279
NZD/USD: Kiwi Declines as Mixed Trade Sentiment Weighs
Market Overview
NZD/USD dipped toward 0.5950 during Tuesday’s Asian session as the US Dollar regained momentum.
- Renewed trade optimism surfaced after President Trump hinted at reducing tariffs on China, and Beijing announced exemptions for certain US imports.
- Conflicting messages from Chinese officials cast doubt on the current status of negotiations.
- Domestically, weak labor market data in New Zealand reinforced the likelihood of a 25 basis point rate cut by the Reserve Bank of New Zealand in the upcoming meeting.
Technical Overview
Moving Averages
Exponential:
- MA 10: 0.5938 – Bullish
- MA 20: 0.5878 – Bullish
- MA 50: 0.5798 – Bullish
Simple:
- MA 10: 0.5962 – Bullish
- MA 20: 0.5838 – Bullish
- MA 50: 0.5765 – Bullish
Indicators
- RSI: 61.99 – Buy Zone | Bullish
- Stochastic Oscillator: 87.33 – Buy Zone | Neutral
Key Levels
- Resistance: R1: 0.5792 | R2: 0.5848
- Support: S1: 0.5610 | S2: 0.5554
Overall Sentiment: Bullish
Market Direction: Buy
Trade Suggestion:
- Entry (Limit Buy): 0.5930
- Take Profit: 0.6038
- Stop Loss: 0.5869
USD/CAD: Canadian Dollar Pressured Post-Election
Market Overview
USD/CAD hovered near 1.3840 in early European trading on Tuesday, recovering intraday losses.
- The Canadian Dollar weakened following the national election, where the Liberal Party fell short of a majority, potentially limiting its power in future US trade discussions.
- Continued optimism over US-China trade relations helped bolster the US Dollar, further pressuring the Canadian Dollar.
Technical Overview
Moving Averages
Exponential:
- MA 10: 1.3872 – Bearish
- MA 20: 1.3958 – Bearish
- MA 50: 1.4107 – Bearish
Simple:
- MA 10: 1.3846 – Bearish
- MA 20: 1.3964 – Bearish
- MA 50: 1.4188 – Bearish
Indicators
- RSI: 34.62 – Sell Zone | Bearish
- Stochastic Oscillator: 13.58 – Sell Zone | Neutral
Key Levels
- Resistance: R1: 1.4505 | R2: 1.4577
- Support: S1: 1.4269 | S2: 1.4197
Overall Sentiment: Bearish
Market Direction: Sell
Trade Suggestion:
- Entry (Limit Sell): 1.3874
- Take Profit: 1.3795
- Stop Loss: 1.3940
Other Major Currency Movements
- USD/CHF: Up 0.37% to 0.8229
- USD/JPY: Up 0.34% to 142.50
- EUR/GBP: Up 0.08% to 0.8502
- EUR/AUD: Up 0.02% to 1.7761
- AUD/NZD: Down 0.01% to 1.0755
- USD/CNY: Down 0.39% to 7.2656
- AUD/SEK: Up 0.24% to 6.1752
Key Economic Events Today
- USD – CB Consumer Confidence (Apr):
- Forecast: 87.7
- Previous: 92.9
- Time: 19:30 GMT
- USD – JOLTS Job Openings (Mar):
- Forecast: 7.490M
- Previous: 7.568M
- Time: 19:30 GMT