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EUR/USD declined from the 1.1570 resistance and traded below 1.1470. USD/JPY is rising and might gain pace above the 142.45 resistance.

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

• The Euro started a fresh decline after a strong surge above the 1.1500 zone.
• There was a break below a key bullish trend line with support at 1.1440 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 141.00 and 141.65 levels.
• There was a break above a connecting bearish trend line with resistance at 141.20 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair rallied above the 1.1500 resistance zone before the bears appeared. The Euro started a fresh decline and traded below the 1.1500 support zone against the US Dollar.

There was a break below a key bullish trend line with support at 1.1440. The pair declined below 1.1410 and tested the 1.1310 zone. A low was formed near 1.1308 and the pair started a consolidation phase. There was a minor recovery wave above the 1.1370 level.

The pair climbed above the 23.6% Fib retracement level of the downward move from the 1.1573 swing high to the 1.1308 low. EUR/USD is now trading below 1.1440 and the 50-hour simple moving average.

On the upside, the pair is now facing resistance near the 1.1410 level. The next key resistance is at 1.1440 and the 50% Fib retracement level of the downward move from the 1.1573 swing high to the 1.1308 low.

The main resistance is near the 1.1470 level. A clear move above the 1.1470 level could send the pair toward the 1.1570 resistance. An upside break above 1.1570 could set the pace for another increase. In the stated case, the pair might rise toward 1.1650.

If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.1335. The next key support is at 1.1310. If there is a downside break below 1.1310, the pair could drop toward 1.1265. The next support is near 1.1220, below which the pair could start a major decline.

USD/JPY Technical Analysis

On the hourly chart of USD/JPY at FXOpen, the pair started a fresh upward move from the 140.00 zone. The US Dollar gained bullish momentum above 141.65 against the Japanese Yen.

There was a break above a connecting bearish trend line with resistance at 141.20. It even cleared the 50-hour simple moving average and 142.45. The pair climbed above 143.00 and traded as high as 143.21 before there was a downside correction.

The pair dipped below the 23.6% Fib retracement level of the upward move from the 139.88 swing low to the 143.21 high. The current price action above the 141.65 level is positive.

Immediate resistance on the USD/JPY chart is near 142.45. The first major resistance is near 143.20. If there is a close above the 143.20 level and the RSI moves above 75, the pair could rise toward 144.50.

The next major resistance is near 145.00, above which the pair could test 148.00 in the coming days. On the downside, the first major support is 141.65 and the 50% Fib retracement level of the upward move from the 139.88 swing low to the 143.21 high.

The next major support is visible near the 141.00 level. If there is a close below 141.00, the pair could decline steadily. In the stated case, the pair might drop toward the 139.90 support zone. The next stop for the bears may perhaps be near the 137.50 region.

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Risk appetite returned in the overnight US session yesterday, 22 April, sparked by US Treasury Secretary Bessent's remarks that he sees a de-escalatory path forward regarding the U.S. trade standoff with China in a closed-door investor summit.

All the major US stock indices erased Monday’s losses with the S&P 500, Nasdaq 100, Dow Jones Industrial Average, and Russell 2000 gaining more than 2% yesterday, but remained below their respective 20-day moving averages.

Yesterday’s revival in risk appetite has also been led by a recovery in the US dollar, especially against the haven currencies, where the USD/CHF and USD/JPY gained by 1.2% and 0.5% respectively.

In today’s Asian opening session, the S&P 500 and Nasdaq 100 E-mini futures extended their intraday gains to 1.6% and 1.8% respectively at this time of writing, reinforced by the news report stating that US President Trump backed down from his earlier threat to remove Fed Chair Powell from office, and mentioned the 145% tariffs on Chinese imports will eventually “come down substantially”

Major Asian benchmark stock indices were jolted up by such “US-China de-escalation” optimism. Japan’s Nikkei 225 staged a rally of 2%, and Hong Kong’s Hang Seng Index surged by 2.4% at this time of writing.

Lack of safe haven demand triggered a sharp bearish reversal in gold (XAU/USD), which fell 1.3% to close yesterday’s US session at $3,381, its worst single-day performance since 7 April. This decline came after gold hit a fresh intraday all-time high of $3,500. Despite the pullback, it remains above its 20-day moving average, which continues to provide support around the $3,170 level.

In its latest updated World Economic Outlook report, the IMF cut economic growth forecasts for most countries due to US trade tariffs and rising trade tensions. The global economic growth forecast for 2025 was slashed to 2.8% from 3.3% projected in January.

Economic data releases

Fig 1: Key data for today’s Asian mid-session (Source: MarketPulse)

Chart of the day – Japan 225 cleared above 20-day moving average

Fig 2: Japan 225 CFD Index minor trend as of 23 Apr 2025 (Source: Trading View)

The price actions of the Japan 225 CFD Index (a proxy of the Nikkei 225 futures) have staged a bullish gap-up above its 20-day moving average with a positive momentum reading in its hourly RSI momentum indicator, which suggests that it may extend its mean reversion corrective rebound in place since its 7 April swing low of 30,343.

Watch the 34,315 key medium-term pivotal support for the next immediate resistances to come in at 35,730 and 36,450 (also the 50-day moving average).

On the flip side, a break below 34,315 invalidates the bullish tone to revive the bears to expose the next intermediate supports at 33,680 and 32,425 in the first step.

Markets

Yesterday during the day, markets gradually entered calmer waters as the impact of the rift between President Trump and the Fed gradually unwound. US equities more than reversed Monday’s decline with major indices closing between 2.51% (S&P 500) and 2.71% (Nasdaq) higher. US Treasuries also entered calmer waters. Despite recent pressure from the White House, most Fed members (in a balanced way) still joined Chair Powell’s thesis that policy is currently well positioned for changes in the economy and that if the combination of a olid labour market and higher inflation risks/expectations persists, the Fed will keep rates on hold at least of a while (e.g. Fed Kugler). US yields in a corrective flattening move changed between + 5.7 bps (2-y) and -2.5 bps (30-y). However, the major market-relevant events still came after the close of US markets. President Trump’s media messages aren’t contained by the regular trading hours. In comments to reporters, he stated that he has no intention of firing Powell. He only would like him to be ‘early or on time as opposed to being late’ with respect to cutting interest rates. At the same time, the US President also struck a relatively ‘soft’ tone on trade negotiations with China as he indicated that tariffs might drop substantially in case of a deal. The comments of course were only a ‘temporary photo’ of the mindset at the White House. Even so, it gave the impression of some kind of an intended de-escalation effort. US equities rallied further post-market. The US yield curve this morning bull flattens (30-y -7.5 bps) and the dollar regains some further ground after yesterday’s intraday comeback (USD DXY 99.2, EUR/USD 1.138). On European markets, yields yesterday still declined a few bps (Germany -2.5 bps 2-y; -3.7 bps 30-y). Several ECB members, including Chair Lagarde, indicated that the ECB is close to reaching its price stability objective, but that all options are open for the June policy meeting as uncertainty remains elevated. Despite this balanced comments post last week’s ECB meeting, markets continue to anticipate further ‘aggressive’ ECB easing later this year (near 1.50% by year end). We assume this trend has gone (more than) far enough.

Asian markets this morning mostly show gains between 1 à 2% after the de-escalation in the US yesterday evening. Aside from new ‘guidance’ from the US administration, markets today will keep a close eye at the April PMI’s. Overall sentiment in EMU (composite PMI) is expected to backtrack from the positive momentum in March (50.2 from 50.9). The survey already covers the period after Trump’s tariff announcement on liberation day (April 2). Especially for Europe, we keep a close eye at the expected impact on prices. If slower growth coincides with rather modest price growth, it might further fuel the market debate on an additional ECB rate cut in June even as we consider it too early to draw conclusions. In the US, the composite index also is expected to ease from 53.5 to 52.0. Over there, a stagflationary narrative is likely, but an outright negative signal from the labour market might put additional pressure on the Fed to reconsider the balance with respect to its dual mandate. The dollar recently suffered from a US-driven risk-off, but we don’t expect a sustained comeback, even in case of a (temporary) improvement in risk sentiment.

News & Views

Czech National Bank deputy governor Frait yesterday signaled room for one more rate cut in the second half of the year, from 3.75% now to 3.5% even though investors expect it to be slightly lower in part due to global financial market turbulence. Money markets discount a 25 bps at the next, May 7, policy meeting and a 3% policy rate by year-end. Ahead of that meeting, the CNB still gets Q1 GDP data (Apr 30) and one additional CPI report (May 6). Frait wants to be very careful with further monetary easing with the labour market being one of the reasons. It is still tight and wages, especially in market services, are growing relatively quickly. Rising property prices and fiscal dynamics are other domestic inflation risks.

Rumours suggest that French President Macron is considering to call snap parliamentary elections as early as this autumn or alongside municipal elections next year (March). Macron is reportedly consulting with his inner circle and weighing the potential benefits and risks of such a move. The aim would be to regain a legislative majority, banking on his boost in popularity thanks to greater international prominence. The gamble to regain political stability through elections could backfire though in more political instability if results disappoint. Macron’s presidential term ends in April 2027 ahead next parliamentary elections (June 2029).

Daily Pivots: (S1) 187.88; (P) 188.38; (R1) 189.29; More...

Intraday bias in GBP/JPY stays neutral and outlook is unchanged. Risk will remain on the downside as long as 190.06 resistance holds. Below 184.35 will target 180.00 low. Nevertheless, break of 190.06 will turn bias back to the upside for stronger rebound.

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.

Daily Pivots: (S1) 161.03; (P) 161.68; (R1) 162.36; More...

Intraday bias in EUR/JPY remains neutral for the moment, and more range trading could be seen. 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) 0.8549; (P) 0.8582; (R1) 0.8599; More...

Intraday bias in EUR/GBP stays neutral at this point, and more consolidations could be seen below 0.8737 short term top. Further rise is expected as long as 0.8518 support holds. On the upside, break of 0.8737 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 0.8438).

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) 1.7873; (P) 1.7928; (R1) 1.7997; More...

EUR/AUD is still extending the corrective pattern from 1.8554 short term top. Intraday bias remains neutral at this point. Downside of pull back should be contained by 38.2% retracement of 1.5963 to 1.8854 at 1.7750. On the upside, firm break of 1.8554 will resume larger up trend. However, firm break of 1.7750 will bring deeper fall to 55 D EMA (now at 1.7322).

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) 0.9308; (P) 0.9335; (R1) 0.9381; More....

EUR/CHF's rebound from 0.9218 extended higher but stays below 0.9408 resistance. Intraday bias remains neutral and outlook stays bearish as long as 0.9408 resistance holds. On the downside, firm break of 0.9204 low will confirm larger down trend resumption.

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. Next target is 100% projection of 0.9928 to 0.9204 from 0.9660 at 0.8936.

In focus today

Today's key events will be the April flash PMIs from the euro area, US and the UK, which likely could give the first glimpse of the impact from tariff uncertainty.

In the euro area, we expect to see a decline in the manufacturing index to 48.2 from 48.6 due to less new orders from the US, while the services figure should remain broadly unchanged at 51.0. In principle, the PMI index should not be affected by sentiment effects, but the risk is that we see a negative impact anyway.

In the US, a similar pattern is likely to emerge, with the manufacturing sector weakening - as suggested by last week's gloomy Philly Fed index. The services PMI should hold up better, unless consumer uncertainty has begun to weigh on consumption, though March retail sales defied this.

Economic and market news

What happened overnight

In Japan, April PMIs were mixed, as the manufacturing leg continued to contract for the tenth straight month, printing 48.5, partly due to concerns over Trump's tariffs. Conversely, the service sector measure ticked up to 52.2, driven by customer demand that led to the strongest increase in sales in three months. Importantly, inflationary pressures remained high across both sectors, with overall input costs rising at the fastest rate in two years - and thus firms raising sales prices. The composite measure re-entered the expansionary territory, increasing to 51.1 from 48.9 in March.

What happened yesterday

In the US, the Richmond Fed Manufacturing index worsened to -13 in April (March: -4), with the shipments component dropping to -17 from -7. Coupled with last week's Philly Fed index, regional Fed manufacturing surveys are pointing towards a clear decline in April so far. Hence, it looks like the front-loading boost to new orders seen in Q1 is shifting towards an uncertainty-driven slowdown.

Politically, Trump altered course yesterday, backing off from his threat to fire Fed Chair Powell, stating: "I have no intention of firing him." This led prediction markets to price in a 13% chance that Powell will leave this year, down from 21% prior to the announcement. Trump's de-escalation also improved market sentiment, sending stocks higher, the USD gaining ground again, and gold prices declining. Before Trump's U-turn, Treasury Secretary Bessent had described the trade war with China as "unsustainable," which initially triggered the rebound in asset prices. Adding to the somewhat softer stance on China, Trump also expressed optimism about a potential trade deal, suggesting it would result in "substantially" lower tariffs on Chinese goods. However, he clarified that the final deal "won't be anywhere near" current tariff rates — though "it won't be zero," he added. Note that Bessent is set to speak later today on the state of the financial system.

In the euro area, consumer confidence declined to -16.7 in April from -14.5 in March, dropping to the lowest level since November 2023 - likely due to Trump's trade war and the sharp declines in equity markets. Notably, the lower confidence readings are yet to translate into hard data - both when looking at similar data from other economies (e.g., US March retail sales) and our own high-frequency data on card transactions in Denmark among Danske Bank private customers. Hence, the weakening in consumer confidence appears to be a Trump effect rather than a reflection of a concrete deterioration in household finances. That said, we do expect the trade war to negatively affect euro area growth over the coming year, though likely not to the extent consumers fear, given the backdrop of low unemployment, rising real incomes, and the ECB's monetary easing, which should help support consumption amid trade uncertainty.

The ECB's quarterly survey of professional forecasters showed slightly higher inflation expectations and lower growth expectation compared to the last release. Tariffs and defence spending were the main factors behind the revisions. However, the revisions were very small, indicating that analysts have not yet turned significantly negative on the euro area economy following Trump's trade war. The survey was conducted between April 1 and April 4, so it likely includes the "liberation day" tariffs but not the clear escalation between the US and China. Hence, we will likely see a further downward revision of the growth forecast in the next update, and we also expect lower inflation forecasts following the marked increase in EUR/USD since April 4.

Tariffs and the trade war remain in the limelight, as reflected by the IMF's downgrade of its 2025 global growth forecast, with notable cuts for the US and China. The downward revision is tied to escalating trade tensions amid sharp US tariff hikes. The IMF currently sees further escalation in tariffs and trade tensions as the major risk, alongside the risk of further tightening in financial conditions.

In Sweden, the LFS unemployment was much stronger than expected, with the seasonally adjusted measure decreasing to 8.1% in March from 8.9% in February. Although the series tends to be extremely volatile the details reveal a solid set of numbers, with employment for the full quarter exceeding our forecasts, while the labour force developed as expected. Hence, the worst is clearly behind us in the labour market - unless the recent tariff and stock market turbulence alters the trajectory ahead.

In geopolitics, both Russia and Ukraine showed some progress toward a peace deal. The Financial Times reported that Putin had offered to halt Russia's invasion at the current front lines, while Zelenskiy stated that Ukraine was ready for talks with Russia once a ceasefire was in place.

In commodities space, oil prices moved higher during yesterday's session, largely spurred by new US sanctions targeting Iranian oil exports and the sentiment improvement following Trump's softer tone on the Fed and Bessent's trade-war comments. Brent trades around 68 USD/bbl as of this morning.

Equities: Global equities moved higher yesterday in what largely appeared to be a reversal of Monday's price action. Equities were up, cyclicals outperformed defensives, and in the cross-asset space, we observed a similar dynamic with falling yields and a stronger dollar.

Although we had a fairly busy earnings calendar, neither the earnings nor the macro data released yesterday stood out in a particularly impressive manner. Once again, politics took centre stage. Notably, comments from US Treasury Secretary Scott Bessent seemed to calm markets and restore risk sentiment as he indicated de-escalation with China, describing the tariff standoff with Beijing as unsustainable. US equities yesterday: Dow +2.7%, S&P 500 +2.5%, Nasdaq +2.7% and Russell 2000 +2.7%. Looking at markets this morning, the positive tone continues with green prints across Asia and higher futures in both Europe and the US.

FI&FX: Markets showed some signs of relief after somewhat softer comments from Trump where he said he had no intention to fire J. Powell and gave some soft remarks with regards to the trade war with China. Today's PMI releases will be the first set of releases capturing 'liberation day' and are therefore expected to be on the weak side, which could be an important input for central banks.

The FTSE index experienced a significant decline from its high on April 3, 2025, reaching a low of 7552.65. We identify this as the completion of wave II. This downturn followed a zigzag pattern, a common structure in Elliott Wave analysis. Starting from the April high, the decline unfolded in three phases: wave ((A)) dropped to 8481.1, wave ((B)) rebounded to 8742.75, and wave ((C)) fell further, structured as a five-wave impulse. Within wave ((C)), the sub-waves progressed as follows: wave (1) hit 8615.96, wave (2) recovered to 8717.03, wave (3) fell to 8023.45, wave (4) rose to 8123.27, and wave (5) concluded at 7547.69, finalizing wave ((C)) and wave II.

Since hitting this low, the FTSE has begun to recover. The ongoing rally from the wave II low is unfolding in a five-wave upward pattern, suggesting potential for further gains. So far, wave 1 of this rally peaked at 8021.77, and wave 2 pulled back to 7599.56. We anticipate wave 3 to push higher soon, followed by a wave 4 pullback, and then a final wave 5 to complete wave (1) of the broader upward move. In the short term, as long as the 7547.69 low holds, any dips are likely to attract buyers at key levels (often referred to as 3, 7, or 11 swings in Elliott Wave terms), supporting further upside.

FTSE 60 Minute Elliott Wave Chart

FTSE Video

https://www.youtube.com/watch?v=HgiZ3dlaIcY