The US Dollar remained in demand during Thursday’s Asian session, buoyed by shifting Federal Reserve rate expectations, evolving political dynamics, and cautious sentiment surrounding global trade. Traders now turn their focus to key upcoming US economic data, particularly the ISM Manufacturing PMI and Friday’s Nonfarm Payrolls (NFP) report.

KEY HIGHLIGHTS 

• EUR/USD Falls Below 1.1350 as Dollar Strengthens on Data
• GBP/USD Slips Toward 1.3300 Amid Trump’s Trade Optimism
• AUD/USD Struggles Despite Strong Trade Surplus, Dollar Gains Ground
• USD/CAD Trades Near Lows, Oil Weakness Limits Canadian Strength

EUR/USD: Drops Below 1.1350 Amid Renewed US Dollar Strength

The EUR/USD pair extended its decline, trading near 1.1325 in early Asia trade on Thursday, as the US Dollar strengthened across the board. The US Dollar Index (DXY) climbed to a two-day high around 99.70.

Key Drivers

• The US economy unexpectedly contracted by 0.3% in Q1 2025, compared to expectations of 0.4% growth.
• Markets continue to price in four rate cuts from the Fed by year-end, with the first expected in June.
• In Europe, the ECB is widely anticipated to cut rates by 25 bps in June, amid slowing growth and falling inflation.
• Markets await US Initial Jobless Claims and ISM Manufacturing PMI data, with the spotlight on Friday’s NFP report (forecast: +130,000 jobs).

Technical Overview

Moving Averages

• Exponential MAs:
• MA 10: 1.1340 – Bearish
• MA 20: 1.1259 – Bullish
• MA 50: 1.1022 – Bullish
• Simple MAs:
• MA 10: 1.1377 – Bearish
• MA 20: 1.1275 – Bullish
• MA 50: 1.0958 – Bullish

Indicators

• RSI: 57.18 – Buy Zone
• Stochastic Oscillator: 39.75 – Neutral

Key Levels

• Resistance: R1: 1.1530 | R2: 1.1718
• Support: S1: 1.0923 | S2: 1.0735

Outlook

• Market Sentiment: Bullish
• Direction: Buy
• Trade Suggestion:
• Limit Buy: 1.1201
• Take Profit: 1.1426
• Stop Loss: 1.1077

GBP/USD: Softens Toward 1.3300 on Trade Optimism and BoE Rate Cut Bets

The GBP/USD pair continues its downward movement, trading near 1.3310 during the Asian session. The pair remains under pressure from both a stronger US Dollar and expectations of a more dovish Bank of England.

Key Drivers

• Former US President Donald Trump signaled optimism about a US-China trade deal, supporting the US Dollar.
• Markets are increasingly pricing in a 25 bps rate cut from the BoE on May 8, amid weaker inflation expectations.
• Upcoming US data, including ISM Manufacturing PMI and NFP, remain in focus.

Technical Overview

Moving Averages

• Exponential MAs:
• MA 10: 1.3305 – Bearish
• MA 20: 1.3217 – Bullish
• MA 50: 1.3021 – Bullish
• Simple MAs:
• MA 10: 1.3333 – Bearish
• MA 20: 1.3174 – Bullish
• MA 50: 1.2990 – Bullish

Indicators

• RSI: 58.70 – Buy Zone
• Stochastic Oscillator: 76.60 – Neutral

Key Levels

• Resistance: R1: 1.3439 | R2: 1.3613
• Support: S1: 1.2878 | S2: 1.2704

Outlook

• Market Sentiment: Bullish
• Direction: Buy
• Trade Suggestion:
• Limit Buy: 1.3205
• Take Profit: 1.3450
• Stop Loss: 1.3061

AUD/USD: Australian Dollar Stabilizes on Strong Trade Surplus

The AUD/USD pair remains subdued, trading just above 0.6350, but found limited support from a stronger-than-expected Australian trade surplus report.

Key Drivers

• Australia’s March trade surplus hit AUD 6.9 billion, significantly higher than the forecast AUD 3.13 billion.
• Expectations for a 25 bps RBA rate cut in May remain firm amid slowing inflation.
• The US Dollar is supported by improved risk sentiment and expectations of a less aggressive Fed rate-cut path.

Technical Overview

Moving Averages

• Exponential MAs:
• MA 10: 0.6381 – Bullish
• MA 20: 0.6346 – Bullish
• MA 50: 0.6314 – Bullish
• Simple MAs:
• MA 10: 0.6393 – Bullish
• MA 20: 0.6299 – Bullish
• MA 50: 0.6298 – Bullish

Indicators

• RSI: 56.96 – Buy Zone
• Stochastic Oscillator: 77.51 – Neutral

Key Levels

• Resistance: R1: 0.6459 | R2: 0.6585
• Support: S1: 0.6050 | S2: 0.5924

Outlook

• Market Sentiment: Bullish
• Direction: Buy
• Trade Suggestion:
• Limit Buy: 0.6359
• Take Profit: 0.6450
• Stop Loss: 0.6312

USD/CAD: Weak Momentum Near 2025 Lows Amid Crude Oil Pressure

The USD/CAD pair remains fragile, consolidating near 1.3800, its lowest level since October 2025, as crude oil prices dip and the Canadian Dollar gains post-election support.

Key Drivers

• Canada’s Liberal Party victory reinforces PM Mark Carney’s trade position.
• Weak oil prices—driven by speculation of increased OPEC+ production—limit CAD upside.
• Fed rate cut expectations and a weak US Q1 GDP print continue to suppress the US Dollar’s momentum.

Technical Overview

Moving Averages

• Exponential MAs:
• MA 10: 1.3846 – Bearish
• MA 20: 1.3928 – Bearish
• MA 50: 1.4083 – Bearish
• Simple MAs:
• MA 10: 1.3834 – Bearish
• MA 20: 1.3926 – Bearish
• MA 50: 1.4171 – Bearish

Indicators

• RSI: 33.11 – Sell Zone
• Stochastic Oscillator: 12.51 – Neutral

Key Levels

• Resistance: R1: 1.4238 | R2: 1.4390
• Support: S1: 1.3745 | S2: 1.3593

Outlook

• Market Sentiment: Bearish
• Direction: Sell
• Trade Suggestion:
• Limit Sell: 1.3839
• Take Profit: 1.3746
• Stop Loss: 1.3905

Elsewhere in the Forex Market

• USD/JPY up 0.97% at 144.45
• USD/CHF up 0.11% at 0.8272
• EUR/GBP up 0.08% at 0.8506
• EUR/AUD down 0.16% at 1.7664
• AUD/NZD down 0.07% at 1.0782
• USD/CNY down 0.01% at 7.2613
• AUD/SEK up 0.28% at 6.2047

Key Economic Events Today

• BoJ Interest Rate Decision: Forecast: 0.50%, Previous: 0.50% (08:30 GMT)
• US Initial Jobless Claims: Forecast: 224K, Previous: 222K (18:00 GMT)
• US ISM Manufacturing PMI (April): Forecast: 48.0, Previous: 49.0 (19:30 GMT)