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Daily Pivots: (S1) 142.12; (P) 142.78; (R1) 143.29; More...

Intraday bias in USD/JPY remains on the upside as rebound from 139.87 short term bottom is in progress. While further rise could be seen, overall risk will stay on the downside as long as 38.2% retracement of 158.86 to 139.87 at 147.12 holds. On the downside, below 141.51 minor support will bring retest of 139.87. Decisive break of 139.26 key support will carry larger bearish implications.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.8237; (P) 0.8273; (R1) 0.8306; More….

USD/CHF's corrective recovery from 0.8038 is still in progress and intraday bias stays on the upside. Further rise would be seen but upside should be limited by 38.2% retracement of 0.9200 to 0.8038 at 0.8482. On the downside, below 0.8196 minor support will bring retest of 0.8038. Firm break there will resume larger down trend.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8794) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

Global financial markets are relatively stable heading into the end of the week, with risk appetite showing further signs of improvement. European equities are trading modestly higher, following rebounds seen earlier in Japan and Hong Kong. However, US futures are slightly in the red despite strong earnings reports from tech heavyweights Alphabet and Intel. Still, one supportive development is the continued pullback in US Treasury yields, with the 10-year dipping below 4.3% mark—viewed as a positive sign for US assets.

Meanwhile, the trade war front is seeing renewed speculation, especially regarding US-China tariff relations. According to multiple media reports, China has quietly granted tariff exemptions on some US goods—including integrated circuits—previously subject to its 125% retaliatory duties. While no formal statement has been issued by Chinese authorities, there are reports of internal government consultations with foreign businesses. A list of 131 product categories is circulating on social media is believed to outline those under consideration for exemption. These steps signal a possible softening of Beijing's stance and a willingness to preserve critical supply chains.

Meanwhile, US President Donald Trump told Time magazine that China is actively engaging in talks with Washington to strike a tariff deal, and claimed that President Xi Jinping had recently called him. However, China’s Foreign Ministry declined to comment on Trump’s statement and previously warned the US to stop “misleading the public” about the status of bilateral negotiations. The conflicting narratives underscore the fog of uncertainty surrounding trade diplomacy, though market participants appear cautiously hopeful that both sides are seeking a path to de-escalation.

In the currency markets, the week’s performance leaderboard remains largely unchanged. Kiwi is holding firmly at the top. Sterling and Aussie are also among the week’s better performers. On the other end of the spectrum, Swiss franc, Japanese Yen, and Euro are lagging—reflecting fading safe-haven demand. Dollar and Loonie sit in the middle.

In Europe, at the time of writing, FTSE is up 0.28%. DAX is up 0.87%. CAC is up 0.65%. UK 10-year yield is down -0.021 at 4.482. Germany 10-year yield is up 0.018 at 2.471. Earlier in Asia, Nikkei rose 1.90%. Hong Kong HSI rose 0.32%. China Shanghai SSE fell -0.07%. Singapore Strait Times fell -0.21%. Japan 10-year JGB yield rose 0.03 to 1.34.

Canada retail sales fall -0.4% mom in Feb, but core spending offers rebound hopes

Canadian retail sales declined by -0.4% mom to CAD 69.3B in February, in line with market expectations. The overall weakness was driven primarily by a -2.6%mom drop in motor vehicle and parts dealers, with all four store categories in the subsector posting declines.

However, beneath the surface, the data showed encouraging signs. Core retail sales—which exclude fuel and vehicle-related sales—rose by 0.5% mom.

Looking ahead, Statistics Canada's advance estimate points to a 0.7% mom increase in total sales for March.

SNB’s Schlegel: Growth may miss forecasts due to trade uncertainty

Swiss National Bank Chairman Martin Schlegel warned at the central bank's annual general meeting that high levels of trade policy uncertainty continue to cloud the economic outlook.

“It remains very uncertain how inflation and the economy in Switzerland will develop,” Schlegel said, adding that “an economic slowdown cannot be ruled out.”

Growth forecasts are already under pressure, with SNB's March projection of 1% to 1.5% GDP growth this year falling below Switzerland’s long-term average of 1.8%.

Schlegel reiterated that SNB stands ready to adjust policy if needed, including interest rate changes and foreign exchange interventions. However, he acknowledged the limits of monetary policy in addressing deeper structural uncertainty.

“Price stability cannot prevent trade policy uncertainty,” he cautioned, but emphasized that maintaining stable prices provides an essential foundation for the broader economy.

UK retail sales rise 0.4% mom in March, 1.6% qoq in Q1

UK retail sales surprised to the upside in March, rising by 0.4% mom, defying market expectations for a -0.3% mom decline.

The unexpected strength was attributed largely to favorable weather conditions, which lifted sales at clothing and outdoor retailers. However, this gain was partially offset by weaker performance at supermarkets.

Looking beyond the monthly figure, the broader quarterly performance painted an encouraging picture of consumer resilience. Retail sales volumes grew by 1.6% qoq 1.7% yoy in Q1. These results indicate that UK consumers remain relatively active despite broader economic uncertainties.

Tokyo CPI core surges to 3.4% in April, strengthening case for BoJ June hike

Inflation in Japan’s capital city surged in April, with Tokyo core CPI (excluding food) accelerating from 2.4% yoy to 3.4% yoy, above the 3.2% yoy forecast. The more domestically focused core-core measure (excluding food and energy) also rose sharply, from 2.2% yoy to 3.1% yoy. Headline CPI jumped from 2.9% yoy to 3.5% yoy.

Despite the upside surprise, BoJ is still expected to hold rates steady at its May 1 policy meeting as it gauges the broader impact of recent US tariffs and awaits progress in ongoing trade negotiations. However, with inflation gathering pace across key categories, market expectations are shifting toward a rate hike as soon as June.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.8237; (P) 0.8273; (R1) 0.8306; More….

USD/CHF's corrective recovery from 0.8038 is still in progress and intraday bias stays on the upside. Further rise would be seen but upside should be limited by 38.2% retracement of 0.9200 to 0.8038 at 0.8482. On the downside, below 0.8196 minor support will bring retest of 0.8038. Firm break there will resume larger down trend.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8794) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

Canadian retail sales declined by -0.4% mom to CAD 69.3B in February, in line with market expectations. The overall weakness was driven primarily by a -2.6%mom drop in motor vehicle and parts dealers, with all four store categories in the subsector posting declines.

However, beneath the surface, the data showed encouraging signs. Core retail sales—which exclude fuel and vehicle-related sales—rose by 0.5% mom.

Looking ahead, Statistics Canada's advance estimate points to a 0.7% mom increase in total sales for March.

Full Canada retail sales release here.

The British pound has edged lower on Friday. In the European session, GBP/USD is trading at 1.3214, down 0.17% on the day.

UK retail sales climbs 0.4%

UK retail sales were a ray of sunshine in March. Monthly, retail sales rose 0.4%, beating the market estimate of -0.4% but below the revised 0.7% increase in February. Clothing sales showed strong growth as shoppers took advantage of the sunny weather.

Annualized, retail sales rose 2.6% from a revised 1.8% gain in February and above the market estimate of 1.8%. This was the strongest gain in three months.

UK consumer confidence worsens

The strong retail sales was a pleasant surprise but the consumer economy remains fragile. The GfK consumer confidence index deteriorated in April to -23 from -19 and below the market estimate of -22. This was the lowest level since November 2023.

Consumers are concerned over the rising cost of living and worsening global trade tensions which has been fuelled by President Trump's tariffs. The GfK survey found that consumers are anxious that inflation will continue to rise due to the US tariffs.

The Bank of England is following trade tensions carefully as well. On Thursday, Governor Andrew Bailey said that the BoE was "quite focused on the growth shock" for the UK from the tariffs, although he said the UK was not close to a recession. If the global trade war intensifies, it will weigh on UK growth but will also push inflation lower.

US consumer inflation expectations expected to climb

President Trump's tariff policy is expected to raise inflation and consumers are anxious that inflation will rise sharply. The UoM consumer inflation expectations index jumped to 6.7% in the initial April release, up from 5.0% in March. Today's final release is expected to confirm this figure, which would mark the highest level since Nov. 1981.

GBP/USD Technical

• GBP/USD is testing support at 1.3313. Below, there is support at 1.3277
• There is resistance at 1.3375 and 1.3411

USDJPY remains constructive as bounce from multi-month low (139.88) holds above broken Fibo level at 142.55 (23.6% of 151.20/139.88 bear-leg, reinforced by 10DMA) for the third consecutive day.

Safe haven yen benefited from the recent uncertainty over US trade tariffs and anticipated negative impact on global economy, advancing over 10% from its January low vs US dollar, but the latest calmer tones that come from two biggest world’s economies (USA and China) faded safe haven demand that could further pressure yen if situation continues to improve

Friday’s fresh gains fully reversed Thursday’s drop, keeping in play hopes for attack at pivotal Fibo barrier at 144.21 (38.2% retracement) break of which to strengthen the structure and open way for stronger recovery.

However, predominantly negative daily studies (bearish momentum is still strong and stochastic is overbought) warn of possible recovery stall.

Look for reaction on key levels (142.55 or 144.21) which would provide clearer direction signals.

Res: 143.85; 144.21; 144.78; 145.54.
Sup: 142.55; 141.65; 141.41; 140.47.

Swiss National Bank Chairman Martin Schlegel warned at the central bank's annual general meeting that high levels of trade policy uncertainty continue to cloud the economic outlook.

“It remains very uncertain how inflation and the economy in Switzerland will develop,” Schlegel said, adding that “an economic slowdown cannot be ruled out.”

Growth forecasts are already under pressure, with SNB's March projection of 1% to 1.5% GDP growth this year falling below Switzerland’s long-term average of 1.8%.

Schlegel reiterated that SNB stands ready to adjust policy if needed, including interest rate changes and foreign exchange interventions. However, he acknowledged the limits of monetary policy in addressing deeper structural uncertainty.

“Price stability cannot prevent trade policy uncertainty,” he cautioned, but emphasized that maintaining stable prices provides an essential foundation for the broader economy.

The Japanese yen is in negative territory on Friday. In the European session, USD/JPY is trading at 143.45, up 0.59% on the day.

Tokyo Core CPI rises to 3.4%

Tokyo Core CPI rose to 3.4% y/y in April, its highest level since April 2023. This was sharply higher from the 2.4% gain in March and beat the market estimate of 3.2%. The spike was driven by a reduction in government energy subsidies as well as hikes in food prices. The price of rice, a staple food, has skyrocketed by 93% in the past year and grain prices have jumped 25% during that time. Tokyo CPI also surged to 3.5% from 2.9% in March.

BoJ in wait-and-see-mode

The Bank of Japan won't be able to ignore these hot inflation numbers and is expected to raise interest rates. The BoJ doesn't like to telegraph its intentions and the timeline of another hike is unclear. The central bank will likely hold rates at next week's meeting and the markets are looking at a rate hike in June or July.

US tariffs have complicated matters for the Bank of Japan and could delay the next rate hike. President Trump's trade policy has been erratic and it's still unclear whether he will reduce tariffs against China and other countries. BoJ policy makers are in a wait-and-see stance and hoping that US trade policy will be more clear in the coming months.
Markets bracing for weak US consumer sentiment, inflation expectatations

The US wraps up the week with consumer sentiment and inflation expectations. The UoM consumer sentiment index slipped to 50.8 in April, down from 57.0 in March and the lowest level since June 2022. The final estimate is expected to confirm the weak initial release.

Consumers are expecting a jump in inflation, with the UoM inflation expectations hitting 6.7% in April in the initial release, up from 5.0% in March. The final estimate is expected to confirm the initial reading. This would mark the steepest inflation expectations since November 1981.

USD/JPY Technical

• USD/JPY has pushed above resistance at 143.032 and is testing resistance at 143.42. Next, there is resistance at 144.01
• 142.44 and 142.05 are the next support levels

USDJPY 4-Hour Chart, April 25, 2025

• USDCAD meets long-term support trendline near 1.3810.
• Technical indicators reflect easing selling interest.
• A decisive move above EMAs needed to shift outlook.

USDCAD saw limited movement throughout the week and is currently heading for a second consecutive neutral close.

However, the sideways trajectory in the price, combined with oversold signals from the RSI and stochastic oscillator, increases speculation that the recent downtrend may have reached a bottom.

Indeed, the price is hovering near the 1.3810 support region from November 6 and around the ascending trendline drawn from the May 2021 low, making a rebound likely. However, for a meaningful recovery, the bulls will need to push above the broad neutral zone at 1.3950 and break through the 20-day exponential moving average (EMA). The 200- and 50-day EMAs could also present resistance near 1.4055 and 1.4120, respectively. A successful breakout could breathe life back into the pair, potentially boosting buying interest toward the 1.4270 resistance zone, while higher, the spotlight may shift to the crucial barrier at 1.4400–1.4470.

In the bearish scenario, where the price retreats below the support trendline near 1.3790, the 78.2% Fibonacci retracement of the September–February rally at 1.3720 could offer temporary relief. Failing that, the sell-off could accelerate toward the 1.3620 support area, which was the neckline of the double bottom pattern formed last September. A break below that level could trigger stronger selling pressure.

In brief, USDCAD has reached an ideal area for a bullish reversal. However, only a rally above the exponential moving averages and beyond the 1.4100 mark would be sufficient to eliminate downside risks.

Note that Canada is heading to the polls on Monday April 28 to decide whether Prime Minister Mark Carney's Liberal Party will stay in power.

In the second half of April, the USD/CAD chart has shown a decline in volatility following significant spikes observed since February.

The Canadian dollar has stabilised against the US dollar within the 1.390–1.380 range over the past week, as market participants assess what a fair USD/CAD rate might be, given the evolving news backdrop:

→ The US dollar gained upward momentum on hopes of easing trade tensions between the US and China, although the information remains conflicting — Trump claims negotiations are ongoing, while Beijing denies this.

→ Oil prices — a key Canadian export — have recovered by more than 10% from their April lows, providing support for the Canadian dollar.

→ Economic data published this week suggests a cooling in the Canadian economy: employment is declining, and the pace of average wage growth has slowed to 5.4%.

→ Although an important political event — the Canadian Parliamentary elections — is set to take place this weekend, it appears to have had little impact on the USD/CAD exchange rate so far. Trade tariffs between the US and Canada likely remain the dominant concern.

Technical Analysis of the USD/CAD Chart

Price fluctuations have formed a descending channel that originated in March.

From a bearish perspective, resistance may be encountered at:

→ the median line of the channel;

→ the psychological level of 1.400.

From a bullish perspective:

→ the price has formed a rounding bottom pattern near the 1.380 level;

→ the lower boundary of the channel is acting as significant support.

It is possible that the weekend will bring key developments that could act as catalysts, breaking the established range between 1.390 and 1.380.

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