The financial markets remain on edge as the US Dollar struggles amid trade tensions, key economic data releases, and shifting Federal Reserve expectations. This week, major currency pairs such as EUR/USD, GBP/USD, USD/JPY, and AUD/USD face critical events that could drive significant volatility. Investors are closely monitoring tariff developments, labor market reports, and central bank signals, all of which will shape currency movements.
KEY HIGHLIGHTS
- EUR/USD Eyes Further Gains Amid US Dollar Weakness.
- GBP/USD Consolidates Below 1.3000 Before Tariff Impact.
- USD/JPY Awaits Key US Data for Direction.
- AUD/USD Faces Pressure from Fed, China Uncertainty.
EUR/USD Weekly Outlook: US Dollar Faces Further Decline Despite Lingering Uncertainty
The EUR/USD pair remained under selling pressure for the second consecutive week but ultimately closed with minimal change around 1.0820. The US Dollar struggled to gain traction due to concerns over tariffs and lackluster economic data, limiting its appeal as a safe-haven asset.
Key Market Drivers:
- Tariff Uncertainty: US President Donald Trump’s new 25% tariff on imported vehicles, set to take effect in April, and further tariff threats against the Eurozone and Canada have raised concerns.
- Geopolitical Tensions: Trump’s diplomatic negotiations with Russia and Ukraine regarding a ceasefire also impacted market sentiment.
- Economic Data: EU economic data was largely positive, with the Hamburg Commercial Bank (HCOB) releasing preliminary estimates for the March Purchasing Managers’ Index (PMI). However, the impact on EUR/USD remained limited.
Technical Analysis:
- Moving Averages:
- Exponential:
- MA 10: 1.0810 | Positive Crossover | Bullish
- MA 20: 1.0769 | Positive Crossover | Bullish
- MA 50: 1.0647 | Positive Crossover | Bullish
- Simple:
- MA 10: 1.0838 | Negative Crossover | Bearish
- MA 20: 1.0812 | Positive Crossover | Bullish
- MA 50: 1.0577 | Positive Crossover | Bullish
- Indicators:
- RSI: 58.5991 | Buy Zone | Bullish
- Stochastic Oscillator: 23.2726 | Sell Zone | Neutral
- Support & Resistance Levels:
- Resistance: R1: 1.0493, R2: 1.0568
- Support: S1: 1.0249, S2: 1.0174
- Market Sentiment: Bullish
- Trade Suggestion: Limit Buy: 1.0706 | Take Profit: 1.0917 | Stop Loss: 1.0597
GBP/USD Weekly Forecast: Pound Sterling Prepares for Impact from Trump’s Tariff Measures
The GBP/USD pair extended its correction from four-month highs, fluctuating below the 1.3000 mark. The Pound Sterling faced pressure from expectations of targeted reciprocal tariffs by the US and mixed UK economic data.
Key Market Drivers:
- Tariff Measures: Trump’s reciprocal tariffs set to take effect on April 2 could impact GBP/USD volatility.
- UK Inflation & Economic Data: Cooling inflation in the UK dampened sentiment around the Pound, keeping the pair within a consolidation phase.
- US Data Impact: Traders are closely watching the US core Personal Consumption Expenditures (PCE) Price Index and the upcoming Nonfarm Payrolls (NFP) report for fresh trading cues.
Technical Analysis:
- Moving Averages:
- Exponential:
- MA 10: 1.2928 | Positive Crossover | Bullish
- MA 20: 1.2881 | Positive Crossover | Bullish
- MA 50: 1.2749 | Positive Crossover | Bullish
- Simple:
- MA 10: 1.2949 | Negative Crossover | Bearish
- MA 20: 1.2916 | Positive Crossover | Bullish
- MA 50: 1.2665 | Positive Crossover | Bullish
- Indicators:
- RSI: 59.3710 | Buy Zone | Bullish
- Stochastic Oscillator: 36.4243 | Sell Zone | Neutral
- Support & Resistance Levels:
- Resistance: R1: 1.2691, R2: 1.2801
- Support: S1: 1.2335, S2: 1.2225
- Market Sentiment: Bullish
- Trade Suggestion: Limit Buy: 1.2832 | Take Profit: 1.3015 | Stop Loss: 1.2727
USD/JPY Weekly Outlook: Yen Awaits Key US Data Amid Policy Divergence
The USD/JPY pair remains under pressure as strong US economic data supports the US Dollar, but risk aversion and BoJ policy uncertainty lend support to the Yen.
Key Market Drivers:
- US Economic Data: Stronger employment and inflation reports bolstered the US Dollar.
- BoJ Policy Expectations: Market participants watch for potential policy shifts amid rising inflation in Japan.
- Risk Sentiment: Fluctuations in global risk appetite influence USD/JPY movements.
Technical Analysis:
- Market Sentiment: Bearish
- Trade Suggestion: Limit Sell: 150.36 | Take Profit: 149.25 | Stop Loss: 151.20
AUD/USD Weekly Outlook: Aussie Dollar Faces Key US Data Amid China and Fed Uncertainty
The Australian Dollar struggled against the US Dollar as mixed risk sentiment and China’s economic outlook weighed on the currency.
Key Market Drivers:
- China’s Economic Data: Weaker Chinese indicators could further pressure AUD/USD.
- Fed Expectations: Strong US economic data may reinforce expectations of higher rates.
- RBA Policy Stance: Traders watch for potential hawkish signals from the Reserve Bank of Australia.
Technical Analysis:
- Market Sentiment: Bearish
- Trade Suggestion: Limit Sell: 0.6290 | Take Profit: 0.6248 | Stop Loss: 0.6319
Key Forex Market Movements:
- NZD/USD down 0.41% to 0.5716
- USD/CAD up 0.08% to 1.4317
- USD/CHF down 0.1% at 0.8808
- EUR/GBP up 0.33% at 0.8368
Key Economic Events This Week:
- (CNY) Manufacturing PMI (Mar) – Monday
- (EUR) German CPI (MoM) (Mar) – Monday
- (USD) ISM Manufacturing PMI (Mar) – Tuesday
- (USD) Nonfarm Payrolls (Mar) – Friday
- (USD) Fed Chair Powell Speaks – Friday