Exchange rates on cautious ground. EUR-USD at 1.1604

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Currencies


EUR/USD

The EUR/USD pair is currently trading at 1.1605, reflecting a marginal gain of 0.03792907. From a fundamental perspective, Eurozone inflation, as indicated by the Harmonized Index of Consumer Prices (HICP), has climbed to 2.5, highlighting persistent inflationary pressures. However, the European Central Bank maintains a dovish stance, which is restraining bullish momentum for the Euro. In the United States, recent labor market data, including JOLTS, shows signs of cooling, potentially leading the Federal Reserve to adopt a more accommodative policy. Geopolitical risks, such as prospective US tariffs on EU goods, also loom as downside threats.

Technically, EUR/USD is consolidating within a narrow range, trading between support at 1.1597 and resistance at 1.1637. A breakout above 1.1637 could target 1.1666, while a break below 1.1597 opens the way to 1.1580. The short-term bias remains neutral, with traders awaiting a decisive move.

Upside risk: A dovish Fed could weaken the USD and push the Euro higher.

Downside risk: Escalating US-EU trade tensions could weigh on the Euro.


USD/JPY

USD/JPY trades at 153.98, having gained 0.86995. Japan's rising wages are lending support to the Yen, while narrowing US-Japan rate differentials, prompted by dovish Fed expectations, increase the risk of further downside for USD/JPY. Additionally, global risk sentiment remains fragile amid US-China trade tensions, favoring the safe-haven Yen.

From a technical angle, the pair is under pressure, testing support at 152.17, with resistance at 153.13. A breakdown below 152.17 could target 151.54, while a move above 153.13 may reach 153.54. The short-term micro-trend is bearish, signaling potential further weakness.

Upside risk: A hawkish Fed could strengthen the USD and lift USD/JPY.

Downside risk: Further narrowing in rate differentials or risk-off sentiment could favor the Yen.


GBP/USD

GBP/USD is quoted at 1.31753, down by -0.14097. The UK economy demonstrates resilience, supported by stable GDP growth and employment data. The Bank of England maintains a cautious policy stance, balancing inflation risks against the need to support the economy. Geopolitical developments and ongoing trade negotiations continue to present headline risks for Sterling.

Technically, GBP/USD is in a bullish trend, with support at 1.3185 and resistance at 1.3219. A break above 1.3219 could see the pair advance toward 1.3281, while a drop below 1.3185 opens the path to 1.3140. The short-term bias is bullish as the pair tests resistance.

Upside risk: Further positive UK data and dovish Fed developments could push the Pound higher.

Downside risk: Negative trade headlines or geopolitical shocks may pressure the GBP.


AUD/USD

AUD/USD is trading at 0.6565, with a slight decline of -0.13235. Australian GDP growth slowed sharply to 0.2 in the March quarter, down from 0.6, reflecting weak consumer spending and public investment. The Reserve Bank of Australia faces challenges in boosting growth amid subdued inflation, while global risk sentiment—especially US-China trade tensions—remains a key factor.

On the technical side, AUD/USD is showing a bullish trend, with support at 0.6567 and resistance at 0.6597. A move above 0.6597 could target 0.6618, while a fall below 0.6567 would expose 0.6557. The short-term bias is bullish as the pair tests the upper boundary.

Upside risk: Positive Australian data or a softer USD could benefit the Aussie.

Downside risk: Further global trade headwinds or weak domestic data may drag on the AUD.


USD/CHF

USD/CHF is currently quoted at 0.80012, recording a modest gain of 0.0863115. The Swiss economy remains stable, supported by steady growth and low inflation. The Swiss National Bank continues to pursue an accommodative stance, while global risk sentiment and potential shifts in US monetary policy remain the principal drivers for the currency pair.

Technically, USD/CHF is in a bearish trend, with support at 0.7976 and resistance at 0.8007. A decline below 0.7976 could target 0.7926, while a move above 0.8007 may reach 0.8018. The short-term micro-trend is bearish, with the pair testing support levels.

Upside risk: A dovish Fed could weaken the USD further, benefiting the CHF.

Downside risk: Heightened global risk aversion may drive demand for the USD over the CHF.


Market Sentiment

Overall, the forex market reflects a cautious-to-neutral sentiment, with most major pairs consolidating near key support and resistance levels. Central bank policies and shifting global risk dynamics are critical drivers. Short-term breakout opportunities appear most likely in EUR/USD and GBP/USD as both pairs test their respective resistance levels, while USD/JPY and USD/CHF are biased toward further weakness.


Recommendations

  1. EUR/USD: Consider range trading between 1.1597 and 1.1637; watch for a breakout to establish trend-following positions.
  2. USD/JPY: Short positions favored below 152.17; upside limited unless a hawkish Fed surprises.
  3. GBP/USD: Long bias above 1.3185; set stop-loss just below 1.3140.
  4. AUD/USD: Potential for upside continuation above 0.6597; downside risk if 0.6567 fails.
  5. USD/CHF: Remain cautious; consider short positions below 0.7976 with tight stops, as the micro-trend remains bearish.


Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.