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Daily Pivots: (S1) 1.1238; (P) 1.1308; (R1) 1.1353; More...

EUR/USD is extending consolidations below 1.1472 and intraday bias remains neutral. Deeper pullback cannot be ruled out. But downside should be contained by 1.1145 resistance turned support to bring another rally. On the upside, break of 1.1472 will target 161.8% projection of 1.0358 to 1.0953 from 1.0731 at 1.1694.

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 1.0745) holds.

Daily Pivots: (S1) 1.3180; (P) 1.3216; (R1) 1.3268; More...

Intraday bias in GBP/USD stays on the upside at this point. Current rise from 1.2099 should target 61.8% projection of 1.2099 to 1.3206 from 1.2706 at 1.3390, and possibly further to 1.3433 high. On the downside, below 1.3204 minor support will turn intraday bias neutral first. But overall near term outlook will stay bullish as long as 1.2706 support holds.

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.

Daily Pivots: (S1) 0.8163; (P) 0.8201; (R1) 0.8273; More…

No change in USD/CHF's outlook as consolidations continue above 0.8098. Intraday bias stays neutral for the moment. While stronger recovery might be seen, upside should be limited by 55 4H EMA (now at 0.8357) to bring another fall. On the downside, break of 0.8098 will resume recent down trend to 200% projection of 0.9196 to 0.8757 from 0.8854 at 0.7976 next.

In the bigger picture, the break of 0.8332 (2023 low) confirms resumption of long term down trend from 1.0342 (2017 high). Next target is 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9196 at 0.8075. Firm break there will target 100% projection at 0.7382.

Daily Pivots: (S1) 142.71; (P) 143.15; (R1) 143.70; More...

USD/JPY is still bounded in consolidations from 142.05 temporary low and intraday bias remains neutral. Another recovery cannot be ruled out, but outlook will stay bearish as long as 151.20 resistance holds. Below 142.05 will resume the fall from 158.86 to 139.57 support.

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.

Global markets are trading with a mildly risk-off tone today, with losses spanning from Asia through to Europe, and US futures following suit. Technology stocks are under pressure, led by AI-chip giant Nvidia, which warned of significant charges stemming from new US restrictions on semiconductor exports to China. The announcement marks the latest escalation in trade tensions between Washington and Beijing, particularly in high-tech sectors where geopolitical and economic interests are increasingly colliding.

Despite the drag from tech, the broader equity pullback remains relatively contained. Some support is being drawn from slightly stronger-than-expected US retail sales data, which helped ease fears of a sharp consumer slowdown. Still, sentiment remains cautious ahead of potential headlines from US-Japan negotiations later today. The discussion is expected to touch on key topics including tariffs, defense cost-sharing, energy policy, and exchange rate management. The results of these talks could offer a clearer view of US President Donald Trump's broader trade strategy and whether current tariff policies are a prelude to further escalation.

Meanwhile, pressure is mounting on BoJ, with reports suggesting it is preparing to downgrade its economic growth outlook at the April 30–May 1 policy meeting. BoJ’s current forecast of 1.1% GDP growth for fiscal 2025 is likely to be revised downward in response to the mounting impact of US tariffs. While inflation in Japan has been trending upward gradually, central bank officials are now questioning whether the external drag from trade tensions could offset domestic momentum.

In the currency markets, the Swiss Franc is leading gains for the day, followed by Euro and Yen, as investors rotate back into safer assets. Dollar, by contrast, is the day’s weakest performer, followed by Kiwi and Pound. Loonie and Aussie are positioning in he middle.

Technically, Sterling has shown some resilience this week, but signs of fatigue are emerging near key resistance levels. EUR/GBP has found support at 0.8518, while GBP/USD is struggling to break above its near-term channel ceiling. Pullback in the Pound from current levels is plausible, though any downside is likely to remain limited unless EUR/GBP breaks back above 0.8737. Conversely, a decisive upside break against both Euro and Dollar could reignite a broader rally in Sterling.

In Europe, at the time of writing, FTSE is down -0.34%. DAX is down -0.54%. CAC is down -0.66%. UK 10-year yield is down -0.0037 at 4.622. Germany 10-year yield is down -0.034 at 2.502. Earlier in Asia, Nikkei fell -1.01%. Hong Kong HSI fell -1.91%. China Shanghai SSE rose 0.26%. Singapore Strait Times rose 1.04%. Japan 10-year JGB yield fell -0.078 to 1.298.

US retail sales rise 1.4% mom in March, above exp 1.3%

US retail sales rose 1.4% mom to USD 734.9B in March, slightly above expectation of 1.3% mom. Ex-auto sales rose 0.5% mom to USD 590.9B, above expectation of 0.4% mom. Ex-gasoline sales rose 1.7% mom to USD 683.4B. Ex-auto & gasoline sales rose 0.8% mom to USD 539.5B.

Total sales for the January through March period were up 4.1% from the same period a year ago.

Eurozone CPI finalized at 2.2% in March, core at 2.4%

Final data confirmed that Eurozone headline inflation edged lower to 2.2% yoy in March, down from 2.3% in February. Core inflation (ex energy, food, alcohol & tobacco) also softened to 2.4% from 2.6%.

Services was the main contributor to price pressures in Eurozone, adding 1.56 percentage points to the annual rate, followed by food, alcohol and tobacco at 0.57 points. Energy contributed negatively, subtracting -0.10 points from the overall figure.

At the EU level, inflation was finalized at 2.5% yoy, an improvement from February's 2.7% yoy. France registered the lowest annual rate at just 0.9%, while Denmark and Luxembourg followed at 1.5% and 1.5% respectively. In contrast, inflation remains more persistent in Eastern Europe, with Romania (5.1%), Hungary (4.8%), and Poland (4.4%)recording the highest annual rates.

UK CPI falls to 2.6%, both goods and services inflation ease

UK consumer inflation continued to ease in March, with headline CPI slowing to 2.6% yoy, slightly below the expected 2.7% and down from 2.8% yoy in February. On a monthly basis, prices rose 0.3%, also under consensus 0.4% mom forecast.

The decline was broad-based, with annual goods inflation falling to 0.6% yoy from 0.8% yoy and services inflation easing to 4.7% yoy from 5.0% yoy.

Core CPI (excluding energy, food, alcohol and tobacco) edged down to 3.4% as expected, from 3.5% previously.

BoJ’s Ueda: US tariffs nearing bad scenario, policy response may be needed

BoJ Governor Kazuo Ueda warned that US President Donald Trump’s escalating tariff policies have "moved closer towards the bad scenario” anticipated by the central bank.

“We will scrutinise without pre-conception the extent to which US tariffs could hurt the economy,” he said in an interview with Sankei newspaper.

"A policy response may become necessary. We will make an appropriate decision in accordance with changes in developments," he added.

Nevertheless, Ueda reiterated that BoJ will continue to raise interest rates “at an appropriate pace” as long as economic and price conditions align with its projections.

On inflation, Ueda said domestic food price pressures are expected to ease. He sees real wages turning positive and continuing to rise into the second half of the year, supporting consumption and price stability.

Still, he warned of dual risks: persistent inflation driven by global supply shocks, or a consumption drag caused by the rising cost of living.

Australia Westpac leading index falls as tariff shock starting to weigh

Australia’s Westpac Leading Index slipped from 0.9% to 0.6% in March. Westpac noted that the index has only just begun to reflect the escalating disruptions caused by US President Donald Trump's reciprocal tariff announcement on April 2.

While the immediate impact on Australia is seen as limited and manageable for now, "some further softening in the growth pulse looks likely in the months ahead".

Westpac has revised down its growth forecast for Australia in 2025 to 1.9% from 2.2%, citing the accumulating downside risks.

Looking ahead to RBA's May 19–20 meeting, Westpac expects the deteriorating global backdrop and clearer signs of inflation cooling will prompt a 25bps rate cut.

Moreover, the tone of the meeting is likely to pivot more decisively "away from lingering questions about inflation to downside risks to growth." Such a shift would lay the groundwork for additional policy easing in the second half of the year.

China Q1 GDP tops forecasts with 5.4% growth

China’s economy started the year on a stronger footing, with GDP expanding by 5.4% yoy in Q1, surpassing market expectations of 5.1%. On a quarterly basis, growth slowed to 1.2% from 1.6% in Q4.

March’s activity indicators were broadly upbeat. Industrial production surged by 7.7% yoy, well above the 5.6% yoy forecast. Retail sales climbed 5.9%, also ahead of expectations of 5.1% yoy.

Fixed asset investment increased 4.2% year-to-date, modestly exceeding projections. However, persistent weakness in the property sector continues to weigh on the recovery narrative. Property investment fell -9.9% in Q1, slightly worse than the -9.8% decline recorded over the first two months of the year. Private sector investment—a key gauge of business confidence—rose only 0.4%.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 142.71; (P) 143.15; (R1) 143.70; More...

USD/JPY is still bounded in consolidations from 142.05 temporary low and intraday bias remains neutral. Another recovery cannot be ruled out, but outlook will stay bearish as long as 151.20 resistance holds. Below 142.05 will resume the fall from 158.86 to 139.57 support.

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.

US retail sales rose 1.4% mom to USD 734.9B in March, slightly above expectation of 1.3% mom. Ex-auto sales rose 0.5% mom to USD 590.9B, above expectation of 0.4% mom. Ex-gasoline sales rose 1.7% mom to USD 683.4B. Ex-auto & gasoline sales rose 0.8% mom to USD 539.5B.

Total sales for the January through March period were up 4.1% from the same period a year ago.

Full US retail sales release here.

GBP/USD is gaining pace above the 1.3220 resistance. EUR/GBP declined and is now consolidating losses above the 0.8500 region.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is attempting a fresh increase above 1.3220.
•  There is a key bullish trend line forming with support near 1.3245 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is trading in a bearish zone below the 0.8630 pivot level.
• There is a connecting bearish trend line forming with resistance near 0.8570 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair remained well-bid above the 1.2850 level. The British Pound started a decent increase above the 1.3000 zone against the US Dollar.

The bulls were able to push the pair above the 50-hour simple moving average and 1.3150. The pair even climbed above 1.3200 and traded as high as 1.3263. It is now consolidating gains and trading well above the 23.6% Fib retracement level of the upward move from the 1.3030 swing low to the 1.3263 high.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.3260. The next major resistance is near 1.3320. A close above the 1.3320 resistance zone could open the doors for a move toward 1.3450.

Any more gains might send GBP/USD toward 1.3500. On the downside, there is a key support forming near a bullish trend line at 1.3245.

If there is a downside break below 1.3245, the pair could accelerate lower. The next major support is at 1.3145. It is close to the 50% Fib retracement level of the upward move from the 1.3030 swing low to the 1.3263 high.

The next key support is seen near 1.3030, below which the pair could test 1.2860. Any more losses could lead the pair toward the 1.2745 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a steady decline from well above 0.8700. The Euro traded below the 0.8630 support level against the British Pound.

The EUR/GBP chart suggests that the pair even declined below the 0.8600 level and tested 0.8520. It is now consolidating losses and trading below the 50-hour simple moving average. Recently, there was a minor increase above the 0.8540 level.

The pair is now facing resistance near the 23.6% Fib retracement level of the downward move from the 0.8738 swing high to the 0.8518 low. There is also a connecting bearish trend line forming with resistance near 0.8570.

The next major resistance could be 0.8630 and the 50% Fib retracement level of the downward move from the 0.8738 swing high to the 0.8518 low.

A close above the 0.8630 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8685. Any more gains might send the pair toward the 0.8740 level.

Immediate support sits near 0.8520. The next major support is near 0.8500. A downside break below the 0.8500 support might call for more downsides. In the stated case, the pair could drop toward the 0.8360 support level.

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The USD/JPY pair extended its decline on Wednesday, dropping to 142.36 amid sustained dollar weakness.

Key factors driving USD/JPY Movements

The Japanese yen’s appreciation is being propelled by broad-based US dollar softness. The greenback faced selling pressure as concerns grew over the economic fallout from proposed new US tariffs.

In a fresh escalation of trade tensions, US President Donald Trump has called for an investigation into imposing tariffs on critical mineral imports – many of which originate from China. This move has heightened investor anxiety, further weighing on the dollar.

Meanwhile, market attention is turning to the upcoming US-Japan trade talks, where Tokyo is expected to push for the complete removal of US tariffs.

On the domestic front, Japan’s latest economic data revealed an eight-month high in manufacturing sector optimism for April. However, the outlook remains cautious due to lingering risks surrounding US trade policy.

Technical Analysis: USD/JPY

The USD/JPY pair continues to consolidate around 143.20. A downside breakout could signal a further decline towards 141.70, marking the third wave of the downtrend. Conversely, an upside breakout may trigger a technical correction towards 145.00. This scenario is supported by the MACD indicator, with its signal line below zero but pointing firmly upwards.

The pair has formed a broader consolidation range between 142.46 and 144.07, with a triangle pattern emerging. A breakout above this range could initiate a corrective rally towards 145.00. The Stochastic oscillator reinforces this view, as its signal line – currently below 20 – is trending sharply upwards towards 80.

Conclusion

The yen’s rapid appreciation reflects both dollar weakness and cautious optimism in Japan’s manufacturing sector. However, trade policy uncertainties and technical patterns suggest continued volatility, with key levels at 141.70 (downside) and 145.00 (upside) in focus.

Gold broke above psychological $3300 barrier and hit new record high on Wednesday morning, as growing uncertainty over US-China trade war sparked fresh wave of migration into safety, with weaker dollar adding support to metal’s price.

Deteriorating fundamentals after China decided to stop any further deliveries from Boeing, warn of severe negative impact from escalation of conflict that keeps bullish outlook for the yellow metal.

The latest rally took just four days to rally from one to the other round-figure level, indicating that bulls hold grip despite the recent jumps from $3000 to $3100 and from $3100 to $3200 which took only two days each.

Subsequent dip below $3300 (correction low was $3288) is seen as positioning for fresh push higher, with daily close above $3300 level required to confirm break and shift focus on next targets at $3329, $3350 and $3378.

Caution on break below $3288 (reinforced by rising 10HMA) which would sideline bulls for deeper correction.

Res: 3317; 3329; 3350; 3378
Sup: 3300; 3288; 3277; 3264

• UK annual inflation dropped to 2.6% in March 2025, lower than expected, with notable decreases in recreation, culture, and transport prices.
• Markets are pricing in an 85% probability of a Bank of England rate cut at the May meeting.
• Analysts debate whether inflation has bottomed out, with concerns about rising energy and water bills potentially pushing inflation higher in the coming months.

The Office for National Statistics (ONS) released UK inflation data for March this morning. The data revealed that the UK's annual inflation rate dropped to 2.6% in March 2025, down from 2.8% in February and below the expected 2.7%. The biggest price decreases came from recreation and culture, particularly games, toys, and hobbies (-4.2%) and data processing equipment (-5.1%). Transport also played a role, with motor fuel prices falling by 5.3%.

Price increases slowed for restaurants and hotels (3%, the lowest since July 2021), housing and utilities (1.8%), and food and non-alcoholic drinks (3%). On the other hand, clothing and footwear prices rose by 1.1%, reflecting typical increases as spring fashions hit stores.

Monthly inflation rose by 0.3%, slightly less than the previous month's rise and below predictions of 0.4%. Core inflation, which excludes volatile items, eased to 3.4% from 3.5%.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Inflation moving forward and implications for the Bank of England (BoE)

Following the inflation data, markets are pricing in around an 85% probability of a rate cut from the BoE at the Central Banks May meeting.

Source: LSEG

The bigger question for consumers at least is whether this is as good as it is going to get? There is a school of thought among analysts that inflation has likely bottomed and that markets and consumers need to prepare for higher inflation moving forward.

The reason is largely to do with energy prices as ING THINK put it well, stating energy bills have mostly helped lower inflation due to the big drop in natural gas prices after the 2022 spike. However, starting in April, energy bills will add 0.8 percentage points more to the annual CPI than they did in March. Water bills have also gone up significantly this month.

With this in mind ING forecasts put April’s CPI figure at 3.2%, rising to 3.5% or maybe even a tad higher towards the end of the third quarter.

Personally I do not see such a huge jump in April largely on the back of global uncertainty which I think is already impacting demand and spending habits. This could lead to consumers spending less and prioritizing savings due to an uncertain economic outlook and thus help keep Global inflation in check.

Of course this will also depend on how tariff negotiations shake out as this could in theory also lead to an increase in inflation thus negating my assessment of lower demand and steady inflation.

Services inflation also still remains uncomfortably high, but is on target to reach the BoEs forecast figure.

All in all, an interesting period ahead for the UK economy, something the rest of the world is likely to grapple with as well for the majority of 2025.

Technical Analysis - GBP/USD

Looking at GBP/USD from a technical standpoint, the rally to the upside has broken above the resistance level at 1.3261. However, GBP/USD needs to record a daily close above the 1.3261 for further gains to materialize.

The 14-period RSI is also approaching overbought territory which could hinder further upside.

As discussed in yesterday's article GBP/USD Analysis: labor data, inflation watch & key trading levels.

A modest recovery by the US Dollar is what kept GBP/USD from advancing yesterday and early session weakness today is allowing cable to move higher.

I stand by my analysis yesterday, this move is largely being driven by the weaker US dollar rather than GBP strength.

GBP/USD Daily Chart, April 16, 2025

Source: TradingView.com

Support

• 1.3261
• 1.3100
• 1.3000

Resistance

• 1.3322
• 1.3415
• 1.3500