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On Friday, the major currency pair became further entrenched within a local sideways channel, hovering around 1.1339. The US dollar retained gains accumulated over recent sessions, supported by US President Donald Trump’s confirmation that trade negotiations with China would continue.

Key factors driving EUR/USD movements

The dollar received additional support from signs of progress in trade discussions with Japan and South Korea.

Earlier in the week, US Treasury Secretary Scott Bessent emphasised that substantial US-China negotiations would require significant tariff reductions, highlighting the importance of reducing tensions between the world’s two largest economies.

Trump also softened his stance on Federal Reserve Chair Jerome Powell, saying he had no plans to replace him. This statement helped alleviate investor uncertainty regarding the Fed’s leadership.

Meanwhile, Cleveland Fed President Beth Hammack suggested that an interest rate cut could materialise as early as June, contingent on economic data. While this initially weighed on the dollar, the currency regained strength amid renewed trade optimism.

Technical analysis: EUR/USD

H4 chart

The EUR/USD pair has formed a consolidation range around 1.1358. We anticipate the downward wave to continue towards 1.1280, followed by a potential corrective rebound to 1.1427. A subsequent decline towards 1.1045 remains plausible. This scenario is technically supported by the MACD indicator, with its signal line firmly below zero and pointing downward.

H1 chart

On the hourly chart, the pair continues its downward trajectory towards 1.1280, with this level likely to be tested imminently. A corrective pullback towards 1.1427 may follow. The Stochastic oscillator corroborates this outlook, with its signal line currently below 20 and poised for an upward swing towards 80.

Conclusion

The EUR/USD remains confined within a consolidation phase, with trade developments and Fed policy expectations driving near-term volatility. Traders should monitor key support and resistance levels for confirmation of the next directional move.

Daily Pivots: (S1) 0.9393; (P) 0.9410; (R1) 0.9436; More....

EUR/CHF's break of 0.9408 resistance argues that fall from 0.9660 has already completed at 0.9218. Intraday bias is back on the upside for stronger rebound back to 0.9660. But strong resistance could be seen there to limit upside. After all, larger down trend is expected to continue through 0.9204 low as long as 0.9960 holds.

In the bigger picture, rejection by long-term falling channel resistance (now at 0.9600) retains medium term bearishness. That is, down trend from 1.2004 (2018 high) is still in progress. Firm break of 0.9204 (2024 low) will confirm resumption.

Daily Pivots: (S1) 0.8525; (P) 0.8545; (R1) 0.8559; More...

Intraday bias in EUR/GBP remains neutral and consolidation from 0.8737 might extend. Still, further rise is expected as long as 0.8518 support holds. On the upside, 0.8622 minor resistance will bring retest of 0.8737 first. Firm break there will resume the larger rally from 0.8221. However, sustained break of 0.8518 will bring deeper fall back to 55 D EMA (now at 0.8447).

In the bigger picture, down trend from 0.9267 (2022 high) should have completed at 0.8221, just ahead of 0.9201 key support (2024 low). Rise from 0.8221 is likely reversing the whole fall. Further rise should be seen to 61.8% retracement of 0.9267 to 0.8221 at 0.8867 next. This will now remain the favored case as long as 0.8472 resistance turned support holds.

Daily Pivots: (S1) 1.7723; (P) 1.7797; (R1) 1.7844; More...

Intraday bias in EUR/AUD remains neutral first, as consolidations from 1.8553 continues. Downside of pull back should be contained by 38.2% retracement of 1.5963 to 1.8854 at 1.7750. On the upside, above 1.8014 minor resistance will bring retest of 1.8554 first. Firm break there will resume larger up trend. However, firm break of 1.7750 will bring deeper fall to 55 D EMA (now at 1.7335).

In the bigger picture, up trend from 1.4281 (2022 low) is in progress, and in reacceleration phase as seen in W MACD. Next target is 100% projection of 1.4281 to 1.7062 from 1.5963 at 1.8744. Firm break there will pave the way to 138.2% projection at 1.9806, which is close to 1.9799 (2020 high). Outlook will remain bullish as long as 1.7417 resistance turned support holds even in case of deep pullback.

Daily Pivots: (S1) 162.01; (P) 162.27; (R1) 162.71; More...

Range trading continues in EUR/JPY and outlook is unchanged. Intraday bias remains neutral. On the upside, above 164.16 will resume the rally from 154.77 to 164.89 resistance, and then 166.67. However, decisive break of 158.27 support will bring deeper decline back to 154.77 support. Overall, sideway consolidation pattern from 154.40 is still extending.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 189.57; (P) 189.98; (R1) 190.65; More...

GBP/JPY's rebound from 184.35 extended higher today and break of 190.06 resistance suggests that fall from 195.95 has completed already. Intraday bias is back on the upside for 195.95 resistance next. Firm break there will argue that whole choppy decline from 199.79 has finished too. On the downside, below 187.45 will bring retest of 184.35 support instead.

In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 175.94 will bring deeper fall even still as a correction.

• Recently suffering its worst 6-day performance in over three years, WTI crude oil has recently found support, trading ~15% higher than lows made earlier this month
• Currently trading around $63.65 per barrel, WTI will need to break resistance held around $66.07 to extend rally from lows
• Fresh US sanctions on Iranian energy exports could raise some questions on global supply, with no recent progress made on nuclear negotiations

With recent weeks hallmarked by a less-than-stellar economic outlook coupled with a low market appetite for risk, the consequent fallout has been decisively negative for world oil prices.

Having already surrendered gains made earlier this year, concerns about the future of global trade, compounded by fears of a potential supply glut, have recently spelled trouble for oil, falling to multi-year lows of around $55.23 per barrel (WTI) on April 9th.

A chart showing the recent price action of WTICOUSD. OANDA, TradingView, 25/04/2024.

Having since found support amid a brief period of comparative market optimism, WTI will need to break resistance around $66.07 to extend gains further.

WTI: Trump, “Liberation Day” & US-China tensions

With the consumption of oil inextricably linked to industry, manufacturing, and general economic prosperity, recent announcements regarding tariffs and the associated disruption in trade were felt in full force by the oil markets.

Following the announcement of reciprocal tariffs on April 2nd, otherwise known as “Liberation Day”, uncertainty on the future of global trade, and a potential for escalating trade wars would send WTI prices into a tailspin, achieving fresh lows unseen since 2021.

Having agreed to a 90-day pause in reciprocal tariffs since, WTI pricing has been able to stablise, hoping that Trump and his administration can successfully reach amicable trade agreements with key trading partners, like the European Union and China.

The latter is not only currently subject to a 145% levy on most imports to the United States, but also the second-highest consumer of oil globally, making any developments in US-China trade agreements particularly poignant for the future of WTI.

At the time of writing, the White House has made some suggestions that progress is being made on this front, but only time will tell what the likely terms of this agreement could be.

As for WTI pricing, any suggestion of a further expansion of trade tariffs or worsening of trade relations will likely negatively impact oil pricing in the short term, with the opposite being true if the US can reach agreements with key trading partners.

WTI: OPEC tensions

With tensions high amid a slump in oil manufacturing profitability, recent OPEC policy that maintains a commitment to an increase in production has come under scrutiny by some party members.

Most noticeably, this comes by way of Kazakhstan, which recently made commitments to prioritise ‘national interest’ rather than the demands of OPEC+. Ranking 12th in world oil production last year, Kazakhstan will not be the first to exceed production quotas, with non-compliance a rising issue amongst ranks.

With US oil inventories falling in Wednesday’s session, markets now turn their attention to OPEC’s next meeting scheduled for May 5th.

WTI: United States sanctions on Iranian energy exports

With sanctions targeting Iranian energy exports recently renewed, some questions are to be asked regarding how recent developments will affect oil supply in the Middle East.

Having previously offered relief from sanctions when compliant with the United States' demands to limit its nuclear program, recent sanctions have expanded in scope to now cover Liquid Petroleum Gas (LPG), a key export of the Iranian economy.

While discussions are ongoing, markets will remain tentative. Any suggestion of disruption to supply could positively affect WTI pricing.

WTI: Technical analysis & outlook

With price failing to break above the 21-day daily EMA in Wednesday’s session, the short-term outlook for WTI remains bearish. Currently trading in a period of consolidation, if price breaks below the ~$62.51 level, we can likely expect further moves to the downside

When using the ADX on the daily timeframe, trend strength is observed to be falling, but remains a ‘strong trend’. All other factors being the same, this suggests the current bearish trend is set to continue in the short term

Markets

Market sentiment these days is fluid and conditional to all kinds of headlines. For once, during yesterday’s session, the ‘news flow-headlines-rumours combo’ protractedly moved from a hesitant start toward a risk-on session. US indices closed the session with gains from 1.23% (Dow) to 2.74% (Nasdaq). On the trade war, the best news was that there were no new negative headlines from the US administration. Even more, US President Trump said that his administration was having talks with China on trade (admittedly even as this was denied by China). Still market saw this as another sign of potential (US-sided) de-escalation. On the monetary policy front, markets saw some ‘openings’ that the Fed in its dual mandate (over time) could give some more weight to labour market developments rather than to inflation. Cleveland Fed President Beth Hammack indicated that the Fed could move in June IF they have clear and convincing data by then. At the same time, she indicated that she isn’t operating with a base case scenario. Even so, the market picked it up as a dovish signal. Fed governor Waller indicated that tariffs might cause layoffs and that the would support rate cuts in case of a significant rise in unemployment. But he indicated that he doesn’t expect significant effects of the tariffs to become apparent before July. Minneapolis Fed Kashkari mentioned that enough uncertainty may cause lay-offs. For now, this is all conditional. Recent data showed no outspoken weakening of the labour market yet (US jobless claims yesterday again were reported at a low 222k). Even so, it was enough for markets to price a higher probability of Fed easing in H2. US yields in a steepening move declined between 8.7 bps (5-y) and 4.7 bps (30-y). Markets now see about 65% of a 25 bps cut in June and it is more than fully discounted for July. The focus turns the labour market data. German yields moved in a similar way easing between 6.1 bps (2-y) and 3.4 bps (30-y). The move was supported by ECB Rehn keeping the option open of bigger rate cuts if necessary. Chief economist Lane later kept a more balanced tone, as he wasn’t that negative on EMU growth. Of late the impact of both interest rate differentials/expectations and/or risk sentiment the dollar often was different from the ‘standard’ market reaction function. Still, yesterday the combination of lower US yields and risk-on weighed slightly on the dollar. DXY eased to 99.28 (close). EUR/USD ‘rebounded’ to close at 1.139.

Risk sentiment in Asia this morning remains constructive as trade tensions are easing further. According to sources referred to by financial news agencies, China is considering suspending its 125% tariff at least on some key US goods to mitigate the economic damage. In a first reaction, the dollar gains against the likes of the yen (USD/JPY 143.75) and the euro (EUR/USD 1.133) that recently profited from the Sell US trade. Later today, the eco calendar is thin. Markets might keep still keep an eye at the inflation expectations measures of the Final U. of Michigan consumer confidence release. After recent easing, US yields are nearing first support levels (2-y 4.70% area, 10-y 4.25% area). UK March retail sales reported this morning were strong (0.4% M/M and 2.6M% Y/Y). The reaction of sterling is close to non-existent (EUR/GBP 0.8535).

News & Views

Tokyo inflation figures remained uncomfortably high in April. Headline inflation accelerated from 0.3% M/M to 0.4% M/M with core inflation (ex fresh food) and services inflation sticky at respectively 0.5% M/M and 0.3% M/M. In annual terms, headline Tokyo CPI rose from 2.9% to 3.5% with the ex fresh food gauge spiking from 2.4% to 3.4%. Both are the highest levels since April 2023, more than markets expected and way above the BoJ’s 2% inflation target. A low base from last year’s school-fee waiver, a sharp pickup in rent and price adjustments for the new fiscal year contributed to the acceleration. The BoJ recently shifted the onus to economic risks from stemming from the developing trade war, but faces a difficult task turning a blind eye to price developments later this year. The BoJ meets next week with money markets currently only attaching a 5% probability to a new rate hike.

UK consumer confidence (GfK) deteriorated from -19 in March to -23 in April, the weakest level since November 2023. GfK comments that it was an extraordinarily unsettling month as the tariffs controversy filtered through to consumer sentiment. All five categories making up the index have declined. The biggest monthly move came in the “general economic situation over next 12 months” category, which fell from -29 to -37 (vs -21 one year ago). Also “personal financial situation over next 12 month” took a relatively big hit, from 1 to -3. Offering some glimmers of hope, there’s only limited impact on major purchase intentions (-19 from -17). The savings index rose from 25 to 30.

Daily Pivots: (S1) 1.1337; (P) 1.1367; (R1) 1.1420; More...

No change in EUR/USD's outlook and intraday bias stays mildly on the downside. Pullback from 1.1572 short term top could extend lower. But downside should be contained by 38.2% retracement of 1.0176 to 1.1572 at 1.1039. On the upside, break of 1.1572 will resume larger up trend.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0776) holds.

Daily Pivots: (S1) 1.3277; (P) 1.3313; (R1) 1.3375; More...

Intraday bias in GBP/USD remains mildly on the downside at this point. Pullback from 1.3422 short term top would continue lower. But downside should be contained by 38.2% retracement of 1.2099 to 1.3422 at 1.2917. On the upside, firm break of 1.3433 will resume larger up trend.

In the bigger picture, price actions from 1.3433 are seen as a corrective pattern to the up trend from 1.3051 (2022 low). Rise from 1.2099 could be the second leg. Overall, GBP/USD should target 1.4248 key resistance (2021 high) on break of 1.3433 at a later stage.