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USD/JPY climbed to 159.36 mid-week, with the Japanese yen losing ground for a second consecutive day. The market is pricing in the Bank of Japan's policy outlook ahead of next week's meeting.

The regulator is likely to keep rates unchanged while continuing to analyse the impact of the Middle East conflict on the economy. At the same time, a signal to return to policy normalisation may emerge in June.

A revision to forecasts is also expected. Inflation data may be revised upward amid rising energy prices, while economic growth forecasts may be revised downward due to external risks.

On the positive side, Japan's exports grew for the seventh consecutive month, supported by demand from China and ASEAN countries.

Additional pressure on the yen is coming from a strengthening US dollar following the breakdown of the second round of US-Iran negotiations, although the ceasefire has been formally extended.

Technical Analysis

On the H4 chart, USD/JPY formed a consolidation range around the 159.02 level and broke higher to 159.62. A correction to 159.02 is likely, followed by a possible rise to 160.44. Subsequently, a move lower towards 157.70 may develop, with a potential extension to 156.00. Technically, this scenario is confirmed by the MACD indicator, with its signal line above the zero level and pointing firmly upwards, reflecting the potential for the upward move to continue.

On the H1 chart, the market is forming the structure of a downward wave to 159.00. A move higher towards 160.44 is possible thereafter. The scenario is confirmed by the Stochastic oscillator, with its signal line below the 50 level and pointing firmly downwards towards 20, indicating that short-term downside potential remains.

Conclusion

USD/JPY continues to push higher as market doubts over the Bank of Japan's policy direction weigh on the yen. With the BoJ expected to hold rates steady at next week's meeting while assessing the impact of the Middle East conflict, a potential signal for policy normalisation may not come until June. Upward revisions to inflation forecasts and downward revisions to growth expectations add to the complex outlook. While stronger exports provide some positive news, pressure on the yen persists from a firmer dollar following the breakdown of US-Iran talks. Technically, further upside towards 160.44 appears likely before any sustained pullback, with the pair's direction hinging on next week's BoJ signals.

The rally in EURUSD from the March 14, 2026 low is unfolding as a clear five‑wave impulsive Elliott Wave structure. Wave 1 concluded at 1.164, followed by a corrective pullback in wave 2 that ended at 1.144. The advance in wave 3 reached 1.185, which aligns precisely with the 161.8% Fibonacci extension of wave 1. This measured extension reinforces the probability that another leg higher remains possible, ultimately completing wave 5 and confirming the impulsive sequence.

The internal subdivision of wave 3 developed as another impulsive structure of lesser degree. From the termination of wave 2, wave ((i)) ended at 1.1627, while the corrective dip in wave ((ii)) found support at 1.1505. The pair then extended higher in wave ((iii)) toward 1.172, before a modest pullback in wave ((iv)) concluded at 1.1643. The final leg, wave ((v)), carried prices to 1.185, thereby completing wave 3 in the higher degree count. This precise subdivision underscores the integrity of the impulsive structure and provides clarity for the ongoing correction.

Currently, the market is engaged in a wave 4 pullback, unfolding as a zigzag Elliott Wave structure. From the wave 3 peak, wave ((a)) ended at 1.1729, while wave ((b)) retraced higher to 1.179. The final leg, wave ((c)), is expected to terminate within the 1.159–1.167 zone. This area represents a typical corrective target and should attract buyers, setting the stage for renewed upside momentum. As long as the pivot at 1.144 remains intact, the broader outlook favors continuation higher once the correction completes, supporting the case for a sustained bullish trend.

EURUSD 60-Minute Elliott Wave Chart

EURUSD Elliott Wave Video:

https://www.youtube.com/watch?v=5NbqKaE72h8

Market Overview

The cryptocurrency market capitalisation stands at $2.61T, up 2.48% over the past 24 hours. Leading the gains are Dash (+7.9%), Cosmos (+6.5%) and Immutable (+5.9%), while laggards include Basic Attention Token (−0.2%), Aave (+0.1%) and Theta (+0.3%). The sentiment index fell by 1 point over the past day to 32, remaining in the fear zone.

Bitcoin is rewriting 11-week highs, briefly slipping above $78.4K. This marks a continuation of the upward trend that has been in place since the start of the month. In our view, the $75–86K range is not saturated with strong resistance levels, and in the absence of significant negative factors, we anticipate a positive upward momentum. However, at $86K, the leading cryptocurrency will encounter the 200-day moving average, which is also near an important pivot zone. Breaking through this zone would signify much more than the current relatively quiet range.

News Background

Anthony Scaramucci, founder of investment firm SkyBridge Capital, compared Bitcoin to the dollar and stated that the leading cryptocurrency meets all the requirements of a monetary system. According to him, BTC is becoming part of the investment portfolios of both private individuals and institutions worldwide.

The first cryptocurrency could reach a new all-time high within 12 months, suggests Michael van de Poppe, founder of MN Trading. He notes that following deep corrections, Bitcoin typically rebounds by 30–60% within six months.

Consideration of the CLARITY Act, a bill to regulate the crypto market, may be postponed until May, said Senator Thom Tillis, who is leading negotiations between representatives of the crypto industry and the banking sector. The main obstacle remains the provision regarding fees for staking stablecoins.

A consortium of 12 European banks led by Qivalis has chosen the Fireblocks platform to launch a euro-pegged stablecoin. The project is being developed in accordance with MiCA.

The UK has unveiled a strategy for reforming the payments sector. The authorities plan to bring the regulation of traditional services, stablecoins and tokenised deposits under a single legal framework.

European currencies are moving into a corrective decline after recent attempts to hold above key levels, with the current move driven by escalating geopolitical tensions and stronger demand for safe-haven assets. The partial closure of the Strait of Hormuz and renewed escalation in the Middle East are weighing on risk assets, supporting the US dollar through capital flows into more liquid instruments and limiting upside potential for both the euro and the pound. Higher energy prices are adding further pressure by increasing inflation risks for the European economy.

At the same time, markets remain cautious ahead of upcoming macroeconomic releases from the US, as well as data from the euro area and the UK. Anticipation of fresh signals on inflation and economic activity is restraining directional moves and increasing the likelihood of tests of key levels amid a mixed fundamental backdrop.

EUR/USD

As expected, EUR/USD retested the 1.1800–1.1830 resistance zone but failed to establish a foothold above it. Technical analysis points to the potential for a continued downward correction, with reversal signals forming on the daily timeframe. However, a weaker dollar or an improvement in global risk sentiment could trigger a renewed bullish move towards 1.1830–1.1850.

Key events for EUR/USD:

• today at 13:00 (GMT+3): Bundesbank monthly report
• today at 17:30 (GMT+3): US crude oil inventories
• today at 20:00 (GMT+3): speech by Bundesbank President Nagel

GBP/USD

GBP/USD is also declining and approaching important support levels, reflecting broader pressure on European currencies. Technical analysis suggests a potential retest of 1.3470 and, if broken lower, a move towards 1.3380–1.3430. The bearish scenario could be invalidated by a sustained move above 1.3550.

Key events for GBP/USD:

• today at 09:00 (GMT+3): UK Consumer Price Index
• today at 11:05 (GMT+3): speech by Sarah Breeden (BoE)
• today at 11:30 (GMT+3): UK house price index

The currency market remains in a phase of elevated uncertainty, where a combination of geopolitical developments and macroeconomic expectations is driving subdued price action. In the near term, the news flow will remain the key driver, with the potential either to intensify pressure on European currencies or to trigger short-term corrective rebounds.

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• UK inflation climbed to 3.3% in March 2026
• The inflation surge, linked to geopolitical tensions, reinforces the Bank of England's necessity to maintain a restrictive policy stance
• Second round inflation effects on food and services may only be felt in the months ahead
• The GBP/USD pair has transitioned into a constructive recovery phase after breaking a descending channel

The UK’s inflationary landscape saw a fresh uptick in March 2026, with the annual rate climbing to 3.3%. This print comes after two months of stability at 3%, and while the move was largely anticipated by markets, it marks the highest reading we’ve seen in three months.

From a technical and fundamental standpoint, the primary catalyst remains the volatility in the energy sector. Geopolitical tensions, specifically the ongoing conflict with Iran, continue to ripple through the supply chain. Transport costs surged by 4.7% the fastest pace of growth since late 2022, with motor fuels jumping 4.9%. For consumers at the pump, this translated to a painful 8.6p per litre increase in petrol and a staggering 17.6p rise for diesel.

Source: ONS

Key Data Highlights:

• Housing & Household Services: Rose to 4.3% (up from 4.2%), underpinned by a massive 95.3% surge in domestic heating oil, a level of acceleration not seen since September 2022.
• Food & Beverages: Continued their upward trajectory, hitting 3.7% vs. the previous 3.3%.
  Services: Remained sticky at 4.5%, reflecting broader inflationary pressures in the domestic economy.
• The Outlier: Clothing prices provided a rare bit of relief, falling by 0.8%, the sharpest decline for the sector since March 2021.

On a month-on-month basis, the CPI increased by 0.7%, signaling that the "inflation storm" may not have fully passed just yet.

While the current data reveals a lot it does not show second round effects of the war in the Middle East on inflation. The impact on food and services may only start to show up in the coming months.

Implications for the Bank of England

For the Bank of England, these figures likely confirm that a restrictive policy stance remains necessary. The surge in energy and food costs offsets the cooling we’ve seen in discretionary items like clothing.

From a trading perspective, keep a close eye on the GBP/USD and FTSE 100, persistent inflation coupled with geopolitical risk often leads to intraday consolidation as markets weigh the likelihood of "higher for longer" rates against slowing growth momentum.

As I’ve noted in previous outlooks, the path to the 2% target remains fraught with external shocks. Until we see a meaningful de-escalation in the Middle East, energy-led volatility will likely remain the dominant theme for the UK economy like many of its peers.

The Initial Market Reaction

Markets seemed to shrug off today's data with GBP/USD remaining largely flat after the release.

The daily chart for GBP/USD highlights a significant structural shift as we move through April 2026. Following a breakout from a dominant descending channel (dark navy lines) earlier this month, the pair has transitioned from a bearish regime into a constructive recovery phase.

Key Technical Highlights:

• Moving Average Reclaim: Price action remains comfortably above the 100-day SMA (blue) at 1.3455 and the 200-day SMA (black) at 1.3413. This "support sandwich" serves as a foundational floor for the current uptrend.
• The 1.3500 Pivot: GBP/USD is currently consolidating around the 1.3500 psychological level. Bulls must maintain daily closes above this handle to sustain momentum toward the next major resistance at 1.3584.
• Momentum Indicators: The Daily RSI is trending healthily at 57.9, suggesting ample "white space" for further gains before reaching overbought territory.
• Outlook: A decisive break above 1.3584 opens the door for a run toward 1.3700, while a slip below 1.3400 would neutralize the current bullish bias..

GBP/USD Daily Chart, April 22, 2026

Source: TradingView.com

Daily Pivots: (S1) 1.1708; (P) 1.1750; (R1) 1.1785; More….

Intraday bias in EUR/USD remains neutral as it's still bounded in consolidations below 1.1848. With 1.1662 support intact, further rally is in favor. On the upside, sustained trading above 61.8% retracement of 1.2081 to 1.1408 at 1.1824 will pave the way to retest 1.2081 high. However, firm break of 1.1662 support will bring deeper decline back towards 1.1408 low instead.

In the bigger picture, the strong support from 38.2% retracement of 1.0176 to 1.2081 at 1.1353 suggests that the pullback from 1.2081 is more likely a corrective move. Strong support was also found in 55 W EMA (now at 1.1507). Focus is back on 1.2 key cluster resistance level. Decisive break there will carry long term bullish implications. Nevertheless, break of 1.1408 support will revive the case of medium term bearish trend reversal.

Daily Pivots: (S1) 158.80; (P) 159.28; (R1) 159.87; More...

Intraday bias in USD/JPY stays neutral as consolidation continues below 160.45. Further rise is expected with 157.49 cluster support (38.2% retracement of 152.25 to 160.45 at 157.31) intact. On the upside break of 160.45 will target a retest on 161.94 high. However, firm break of 157.31/49 will bring deeper fall back to 61.8% retracement at 155.38 next.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 153.80) holds. Firm break of 161.94 will pave the way to 61.8% projection of 102.58 to 161.94 from 139.87 at 176.75.

Daily Pivots: (S1) 1.3475; (P) 1.3508; (R1) 1.3542; More...

GBP/USD is still bounded in consolidations below 1.3598 and intraday bias stays neutral. With 1.3379 support intact, further rise is favor. On the upside, sustained break of 61.8% retracement of 1.3867 to 1.3158 at 1.3596 will pave the way to retest 1.3867 high. However, firm break of 1.3379 will bring deeper fall back to 1.3158 low instead.

In the bigger picture, current development suggests that price actions from 1.3867 are merely a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is back in favor for a later stage, towards 1.4248 key resistance (2021 high).

Daily Pivots: (S1) 0.7782; (P) 0.7805; (R1) 0.7830; More….

USD/CHF is still extending consolidations above 0.7774 and intraday bias remains neutral. Upside of recovery should be limited below 0.7933 resistance to bring another fall. Sustained break of 61.8% retracement of 0.7603 to 0.8041 at 0.7770 will resume the decline from 0.8041 to retest 0.7603 low.

In the bigger picture, rebound from 0.7603 medium term bottom is seen as correcting the fall from 0.9200 only. Rejection by 55 W EMA (now at 0.8059) will affirm this bearish case, and setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage. Though, sustained break of 55 W EMA will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high).

Daily Pivots: (S1) 0.7128; (P) 0.7157; (R1) 0.7184; More...

AUD/USD is extending consolidations from 0.7221 and intraday bias remains neutral. In case of deeper retreat, downside should be contained above 0.7000 support. On the upside, above 0.7221 will extend the larger up trend to 61.8% projection of 0.6420 to 0.7187 from 0.6832 at 0.7306. However, break of 0.7000 will bring deeper fall back to 0.6832 support instead.

In the bigger picture, rise from 0.5913 (2024 low) is still in progress. Decisive break of 61.8% retracement of 0.8006 to 0.5913 at 0.7206 will solidify the case that it's already reversing the down trend from 0.8006 (2021 high). Further rally should then be seen to retest 0.8006. For now, outlook will remain bullish as long as 0.6832 support holds, in case of pullback.