Forex News
Bank of Japan (BoJ) Governor Kazuo Ueda is addressing the press conference, explaining the reason behind leaving the key interest rate unchanged at 0.75% in the April policy meeting.
BoJ press conference key highlights
Middle East situation remains uncertain.
Japan's economy recovering moderately albeit with some weakness.
Japan's economic growth likely to slow down in FY 2026 due to Middle East situation.
Need to pay close attention to how Middle East developments affect financial, FX markets and Japan economy, prices.
Need to pay close attention to risk of inflation significantly devitating upwards, exerting negative impact on economy.
Real interest rates are at significantly low levels.
BoJ will continue to raise policy rate, adjust degree of monetary accommodation according to economic activity, prices, financial conditions.
Wll consider timing and pace of adjustment while monitoring how Middle East developments affect Japan economy, price and examining likelihood of realising baseline scenario.
Board member Takata suggested including line on CPI already achieving target level.
Board member Tamura suggested including a line that underlying inflation in line with inflation target in outlook report.
Both proposals turned down.
Oil prices could affect prices more than before.
We want to take a little bit more time in gauging how MidEast situations would affect Japan economy, prices, likelihood of achieving target.
Underlying inflation slightly below 2% now.
I can't say how many months it would take to gauge timing of our next rate hike.
Will take appropriately monetary policy to make sure we don't fall behind the curve.
We stood pat today because likelihood of our main scenario outlook had lowered.
Take the fact that 3 board members dissented seriously as chair.
It shows the extreme difficulty of steering monetary policy under current circumstances.
Not seeing immediate need to raise rates.
Need to raise rates if current supply shocks have a secondary knock-on effect.
Inflation upward risk could be reason for raising rates but not only one.
The section below was published on April 28 at 3:30 GMT to cover the Bank of Japan's monetary policy announcements and the initial market reaction.
The Bank of Japan (BoJ) board members decided to leave the short-term interest rate unadjusted at 0.75%, following the conclusion of its two-day monetary policy review meeting on Tuesday.
The decision aligned with the market expectations.
Summary of the BoJ’s Monetary Policy Statement
BoJ makes policy decision by 6-3 vote.
BoJ board members Nakagawa, Takata and Tamura dissented to rate decision.
Nakagawa, Takata and Tamura proposed raising short-term interest rate target to 1.0% from 0.75%.
Proposal by Nakagawa, Takata and Tamura turned down by majority vote.
BoJ’s Nakagawa said while situation in Middle East remained unclear, given economic developments, risks to prices were skewed to the upside under accommodative financial conditions.
BoJ’s Takata said price stability target had been more or less achieved and that risks to prices in Japan were already skewed to the upside due to the second-round effects of price rises stemming from overseas developments.
Will continue to raise interest rates in accordance with developments in economy, prices, financial markets.
Will scrutinise timing, pace of policy adjustment with close eye on economic, price impact from Middle East development.
Will conduct monetary policy as appropriate from perspective of sustainably, stably achieving 2% inflation target.
Japan's economic growth likely to decelerate in fiscal 2026.
Corporate profits, households' real income to be pushed down by factors such as deterioration in terms of trade reflecting rise in crude oil prices.
Economy to be underpinned by government's various measures such as fuel oil subsidies, other factors.
BoJ’s quarterly Outlook Report
Real interest rates are at significantly low levels.
Underlying inflation likely to be at level generally consistent with 2% target in second half of fiscal 2026 and fiscal 2027.
Risks to economic outlook skewed to downside.
Risks to inflation skewed to upside.
Japan's economic growth is likely to decelerate in fiscal 2026.
The rise in crude oil prices reflecting the impact of the situation in the Middle East is expected to push down corporate profits and households' real income.
Economy is expected to continue growing moderately, albeit at a decelerated rate.
Japan's economic growth rate is likely to rise moderately from fiscal 2027 onward, since it is projected that the adverse effects of high crude oil prices will wane.
Projected year-on-year rate of increase in the CPI for fiscal 2026 is significantly higher, reflecting the rise in crude oil prices.
There are various risks to the outlook.
Necessary to pay particular attention to the impact of the future course of the situation in the Middle East on financial and FX markets.
Necessary to pay due attention to keep the risk of inflation significantly deviating upward from materializing.
Possible that the rise in crude oil prices is passed on to the price of various goods and services more easily than before.
Board's core CPI fiscal 2026 median forecast at +2.8% vs +1.9% in January.
Board's core CPI fiscal 2027 median forecast at +2.3% vs +2.0% in January.
Board's core CPI fiscal 2028 median forecast at +2.0%.
Board's real GDP fiscal 2026 median forecast at +0.5% vs +1.0% in January.
Board's real GDP fiscal 2027 median forecast at +0.7% vs +0.8% in January.
Board's real GDP fiscal 2028 median forecast at +0.8%.
BoJ Report on Risks
Possible that the rise in crude oil prices is passed on to the price of various goods and services more easily than before.
Attention will also need to be paid to the possibility that food prices could rise by more than expected through higher market prices for raw materials.
There is risk that large-scale disruptions in supply chains will occur, exerting a significant impact on the production activity of Japanese firms.
Regarding AI, strong business fixed investment could push up the global economy, but if profits do not expand in line with such investment, adjustment pressure could arise, accompanied by changes in asset prices.
Exchange rate developments are, compared to the past, more likely to affect prices.
Trade policies announced so far have partly led to a change in the trend of globalization.
Medium- to long-term inflation expectations have risen moderately.
Market reaction to the BoJ policy announcements
USD/JPY meets fresh supply and eases back toward 159.00 in an immediate reaction to the Bank of Japan's (BoJ) no-rate-change decision, still down 0.08% on the day.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.27% | 0.21% | -0.06% | 0.15% | 0.30% | 0.42% | 0.48% | |
| EUR | -0.27% | -0.08% | -0.35% | -0.15% | 0.00% | 0.10% | 0.20% | |
| GBP | -0.21% | 0.08% | -0.26% | -0.06% | 0.10% | 0.19% | 0.28% | |
| JPY | 0.06% | 0.35% | 0.26% | 0.20% | 0.35% | 0.45% | 0.52% | |
| CAD | -0.15% | 0.15% | 0.06% | -0.20% | 0.16% | 0.24% | 0.33% | |
| AUD | -0.30% | -0.00% | -0.10% | -0.35% | -0.16% | 0.11% | 0.21% | |
| NZD | -0.42% | -0.10% | -0.19% | -0.45% | -0.24% | -0.11% | 0.07% | |
| CHF | -0.48% | -0.20% | -0.28% | -0.52% | -0.33% | -0.21% | -0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
This section below was published on April 27 at 23:00 GMT as a preview of the Bank of Japan Interest Rate Decision.
- The Bank of Japan is expected to keep rates on hold, but a hike is not off the table.
- Uncertainty spurring from the Middle East war will take its toll on the decision.
- Macro fundamentals back the case for additional rate hikes in Japan.
The Bank of Japan (BoJ) will announce its monetary policy decision on Tuesday, at around 3:00 GMT. The BoJ is widely expected to deliver a hawkish hold, keeping the benchmark interest rate unchanged at 0.75% while also hinting at a willingness to hike rates. The latest change in interest rates took place in December, when BoJ officials hiked by 25 basis points (bps)
Japanese policymakers are between a rock and a hard place: The Middle East war is a global source of uncertainty, while the local macro puts pressure on policymakers to act promptly.
Hotter-than-expected inflation and a tightening labor market hint at faster interest rate hikes, which run counter to the BoJ officials' views.
In the meantime, the Middle East war continues. Hopes for a quick resolution fade as time goes by, with the war about to turn two months old.
What to expect from the BoJ interest rate decision?
According to the latest available data, the Consumer Price Index (CPI) rose 1.5% YoY in March, up from 1.3% in February and above the 1.4% anticipated by market players. Core annual inflation, which excludes volatile food and energy prices, rose to 1.8%, up from the expected 1.5%. Meanwhile, the Unemployment Rate stood at 2.6% in February.
If the BoJ could base monetary policy solely on these data, policymakers should pull the trigger in this meeting. However, the ongoing crisis in the Middle East paints a different picture. Rising Oil prices and persistent supply disruptions are expected to have a profound and prolonged impact on inflation worldwide. Japan is no exception. That opens the door for a surprise interest rate hike, although we are talking about Japan, and surprises are not usually in their script.
Policymakers are well aware of the situation. In a press conference in Washington following the 20-G meeting, BoJ Governor Kazuo Ueda noted that higher Oil prices “pose both upside risks to prices and downside risks to the economy, making policy responses difficult.”
Ueda added: “Developments in the Middle East will be a crucial factor (for the BoJ's policy decision), but the outlook remains quite uncertain." Finally, he repeated the central bank’s commitment to price stability: “We will take the most appropriate response to achieve our 2% price target in a sustainable and stable way.”
Governor Ueda will offer a press conference following the rate announcement, as usual. And while market participants anticipate a hawkish lean, the focus will be on how hawkish Japanese policymakers are willing to be in such an uncertain environment.
How could the Bank of Japan's monetary policy decision affect USD/JPY?
Heading into the announcement, market participants expect the BoJ to hold its fire but deliver at least 50 bps rate hikes through 2026. The monetary policy Board is likely to keep rates on hold in its April meeting, not because it is the right decision, but to prevent a market shock. Policymakers are likely to anticipate additional rates coming, which will not be a big surprise.
There are two quite hawkish scenarios. The first would be the BoJ actually triggering a rate hike. The second would be to directly pre-announce a rate hike at the next monetary policy meeting. Furthermore, if officials hint at worries about growth, something that so far they have avoided, the case for additional rate hikes will increase, and hence, boost demand for the Japanese Yen (JPY). The odds for any of those happening are quite limited.
A dovish announcement is off the table, given the ongoing Middle East war.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The USD/JPY pair trades in quite a limited range just below 160.00 since early April, driven by sentiment related to the Persian Gulf crisis. Speculative interest is looking at the US Dollar (USD) as the preferred safe-haven, with optimism boosting demand for the Greenback, and pessimism leading to USD sell-offs. The BoJ announcement, unless a surprise, is likely to have a limited impact on the pair.”
Bednarik adds: “From a technical point of view, the USD/JPY pair is neutral. In the daily chart, the pair develops around a flat 20-day Simple Moving Average (SMA), which has been unable to find a way since early April. The 100- and 200-day SMAs keep heading higher, far below the current level, in line with the former dominant bullish trend. At the same time, the pair develops not far below its 2026 peak in the 160.40 region. Finally, technical indicators head marginally lower within neutral levels, far from providing a clear directional clue. The pair could fall with a hawkish announcement, with a break below 159.00 opening the door for a test of the 158.40 region. Below the latter, the slide could continue towards 157.90. As previously noted, 160.00 provides resistance in the case of sudden JPY weakness, with additional gains aiming to retest the year high.”
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- EUR/GBP holds steady around 0.8660 in Tuesday’s early European session.
- BoE is expected to hold rates steady despite inflation risk.
- Markets anticipate the ECB holding the key rates on Thursday.
The EUR/GBP cross trades on a flat note near 0.8660 during the early European trading hours on Tuesday. Traders prefer to wait on the sidelines ahead of the Bank of England (BoE) and the European Central Bank (ECB) interest rate decisions later on Thursday.
The BoE is likely to keep interest rates steady at 3.75% at its April policy meeting on Thursday as policymakers buy time to assess the risks stemming from the energy crunch. BoE governor Andrew Bailey said in the last meeting that, given the UK’s weak labor market and a lack of corporate pricing power, there was no immediate need to change policy.
However, a UK economist at JPMorgan pointed to strong business activity readings and expansion in Gross Domestic Product (GDP) in February as underscoring the inflation risks. “We expect the BoE to create space for a potential near-term hike, with incoming data determining whether and when it will act,” he said.
The ECB is expected to keep its key interest rates unchanged at its next meeting on Thursday. While rates are expected to hold, markets anticipate the ECB may signal future hikes to combat persistent inflation. All eyes will be on ECB President Christine Lagarde's press conference after the meeting for clues about the outlook for rates.
Goldman Sachs analysts see the ECB delivering two 25 basis point (bps) rate hikes in the months ahead. The first being in June, with the next in September, in bringing the deposit rate back to 2.50%.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- The Indian Rupee falls further against the US Dollar as higher oil prices boost demand for the Greenback by Indian importers.
- Fresh concerns over India Inc.'s earnings projections have dampened the FIIs interest in the Indian stock market.
- This week, investors will pay close attention to the Fed’s monetary policy.
The Indian Rupee (INR) weakens further after a brief pause against the US Dollar (USD) in the opening session on Tuesday. The USD/INR pair jumps to near 94.50 as elevated oil prices continue to hurt the Indian Rupee.
As of writing, the WTI Oil price trades 0.6% higher to near $95.60 and is close to its two-week high of $97 posted on Thursday.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high oil price environment.
Oil prices have remained higher due to uncertainty over the reopening of the Strait of Hormuz, a critical passage to almost 20% of global energy supply.
According to a Reuters report, oil-linked flows and hedging-related US Dollar demand are key headwinds for the Indian Rupee
Hormuz closure keeps oil prices elevated
The uncertainty regarding the reopening of the Hormuz remains escalated, as Washington has not shown any signs of interest in proposals delivered by Iran to end the war. On late Monday, White House press secretary Karoline Leavitt stated that US President Trump discussed Iran’s proposal with the national security team, which calls for the reopening of the Strait of Hormuz and a permanent ceasefire. Leavitt didn’t reveal any information regarding the odds of whether it will be taken forward by Washington.
"I wouldn't say they're considering it. I would just say that there was a discussion this morning that I don't want to get ahead of, and you'll hear directly from the president, I'm sure, on this topic," Leavitt said.
On Monday, US President Trump received another proposal from Iran, which he called “better” than the one, which it was expected to present in canceled peace talks in Islamabad over the weekend, but "still not good enough”.
FIIs extends selling pressure in Indian stock market
In the last six trading days, Foreign Institutional Investors (FIIs) have remained net sellers and have offloaded their stake worth Rs. 18,291.34 crore after a little buying in the April 15-17 period. FIIs appear to be dumping their stake in the Indian equity market due to elevated oil prices, which have raised concerns over India Inc.'s earnings projections.
Fed seems to maintain status quo
This week, the major trigger for the US Dollar will be the Federal Reserve’s (Fed) monetary policy announcement on Wednesday, in which it is expected to leave interest rates unchanged in the range of 3.50%-3.75% for the third time in a row. Investors will pay close attention to Fed Chair Jerome Powell’s comments regarding the monetary policy outlook in the wake of the energy price shock amid the Hormuz closure.
Technical Analysis: USD/INR approaches all-time high of 95.20
USD/INR trades higher at around 94.50, maintaining a bullish near-term bias, as it holds above the 20-day Exponential Moving Average (EMA) at 93.53. The positioning above this rising EMA suggests the broader uptrend remains intact, while the Relative Strength Index (RSI) around 61 indicates firm but not overstretched upside momentum.
On the downside, the 20-day EMA at 93.53 stands as the first layer of dynamic support, and a daily close below this level would hint at a deeper corrective phase within the broader trend. Looking up, the pair aims to revisit the all-time high around 95.20. The spot would enter uncharted territory if it manages a decisive break above 95.20.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Fed Interest Rate Decision
The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Read more.Next release: Wed Apr 29, 2026 18:00
Frequency: Irregular
Consensus: 3.75%
Previous: 3.75%
Source: Federal Reserve
- Silver dips to two-week lows near $73,00 ahead of a slew of central banks' monetary policy decisions.
- Market expectations of a global tightening cycle are weighing on demand for precious metals.
- XAG/USD's next bearish target is the $72.65 area.
Silver (XAG/USD) accelerated its downtrend on Tuesday, to hit fresh two-week lows at $73.35 at the time of writing, as markets shift focus from the war to the world’s major central banks, which will release their monetary policy decisions this week.
The energy shock stemming from the Middle East conflict has boosted inflationary pressures around the globe, pressuring central banks to keep their monetary policies steady or, in some cases, to hike interest rates in the coming months. The non-yielding precious metals tend to struggle in monetary tightening cycles.
Meanwhile, the US-Iran conflict remains in a deadlock, with the Strait of Hormuz closed, supporting Crude prices nearly 50% above pre-war levels, providing support to the safe-haven US Dollar (USD) and adding weight to precious metals. A Reuters report citing a US official says that US President Donald Trump analysed Tehran´s latest peace proposal but that he “does not love it”, because it does not address the nuclear issue.
Technical Analysis: Bears are aiming for the $72.60 area
XAG/USD holds a steady bearish bias from mid-April highs above $83.00, with no sign of a trend shift in sight so far. The negative technical indicators on the 4-hour chart endorse that view. The Relative Strength Index (RSI) sits around 35, and the Moving Average Convergence Divergence (MACD) remains marginally negative, which together suggest lingering downside pressure.
Bears have broken support at the 38.2% Fibonacci retracement of the late March-early April bullish trend, around $74.70, and are aiming for the area between the April 12 low, near $72 60, and the 50% Fibonacci level, at $72.12. Further down, the 61.8% Fibonacci retracement lies right below the $70.00 psychological level.
On the topside, the mentioned the 38.2% Fibonacci retracement at $74.70 is likely to act now as resistance ahead of Monday's and Friday's highs, around $76.60, and the April 22 and 23 highs, near $78.50.
(The technical analysis of this story was written with the help of an AI tool.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
UOB’s strategists Quek Ser Leang and Lee Sue Ann highlight that EUR/USD briefly overshot to 1.1754 before closing unchanged near 1.1720, reinforcing a range-trading bias. Intraday, the Euro (EUR) is seen holding between 1.1695 and 1.1745. For the coming weeks, They expect consolidation between 1.1665 and 1.1765, with earlier downside momentum having faded after resistance at 1.1750 was breached.
Euro holds within defined ranges
"24-HOUR VIEW: When EUR was at 1.1710 in the early Asian trade yesterday, we stated that “the current price movements in EUR are likely part of a range-trading phase, probably between 1.1685 and 1.1730.” The subsequent price movements did not turn out as expected. EUR rose to a high of 1.1754 and then pulled back sharply. EUR closed unchanged at 1.1720. The brief rise to 1.1754 appears to be an overshoot above the range rather than a continued rise. Today, we continue to expect range-trading, most likely between 1.1695 and 1.1745."
"1-3 WEEKS VIEW: Last Friday (24 Apr, spot at 1.1685), we highlighted that “downward momentum has increased further, but EUR must break and hold below 1.1665 before a move to 1.1625 can be expected.” Yesterday, EUR rose and broke above our ‘strong resistance’ level at 1.1750 with a high of 1.1754. Downward momentum has faded, and EUR has likely entered a consolidation phase. For the time being, we expect EUR to trade between 1.1665 and 1.1765."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold remains depressed for the second straight day as US-Iran peace talks uncertainty underpins the USD.
- The Hormuz standoff keeps geopolitical risks in play and lends additional support to the safe-haven buck.
- Bets for at least one Fed rate cut in 2026 might cap the USD ahead of FOMC policy meeting.
Gold (XAU/USD) adds to its intraday losses and touches a three-week low, below the $4,625 level, heading into the European session on Tuesday. The US Dollar (USD) regains some positive traction amid the uncertainty over the second round of US-Iran peace talks and turns out to be a key factor exerting pressure on the commodity. However, expectations for a less hawkish US Federal Reserve (Fed) could offer some support to the non-yielding bullion and help limit further losses ahead of the key central bank event risk.
Hopes for diplomatic efforts to end the Iran war receded after US President Donald Trump canceled his special envoy, Steve Witkoff, and Jared Kushner's planned visit to Pakistan. Meanwhile, Iran gave the US a new proposal that set aside discussion on the country's nuclear program until the war ends and disputes over shipping from the Gulf are resolved. Trump, however, is reportedly dissatisfied with the proposal as it does not adequately address nuclear issues. This, along with a standoff over the Strait of Hormuz, keeps geopolitical risks in play and underpins the USD's reserve currency status, weighing on Gold prices.
The upside for the USD, however, seems capped on the back of a repricing of a potential interest rate cut by the US central bank. According to the CME Group's FedWatch Tool, traders see a roughly 35% chance that the US central bank will lower borrowing costs by the end of this year. This might hold back the USD bulls from placing aggressive bets and limit the downside for Gold ahead of the crucial two-day FOMC meeting, starting this Tuesday. The focus, however, will be on the post-meeting press conference, where comments from the outgoing Fed Chair Jerome Powell will be scrutinized for cues about the future policy path.
Apart from this, fresh developments surrounding the Middle East crisis will play a key role in influencing the USD price dynamics and providing some meaningful impetus to the Gold price. The aforementioned fundamental backdrop, however, seems tilted in favor of the XAU/USD bears and backs the case for an eventual breakdown through a short-term trading range held since the early part of this month.
XAU/USD 4-hour chart
Gold seems vulnerable as trading range breakdown comes into play
Against the backdrop of recent failures to find acceptance above the 200-period Simple Moving Average (SMA) on the 4-hour chart, a convincing break below the trading range support near the $4,655 area could be seen as a fresh trigger for the XAU/USD bears. Moreover, the Relative Strength Index (RSI) hovers just below the midline near 41, while the Moving Average Convergence Divergence (MACD) histogram is negative with the MACD line under its signal. This suggests that downside momentum is still present, even if not aggressively so.
In the meantime, initial resistance is defined by the 200-period SMA at $4,723.13, and bulls would need to reclaim and hold above this barrier to alleviate the current pressure and open the way for a more sustained rebound. Furthermore, traders are likely to watch for fresh basing patterns or a turn higher in RSI and MACD before anticipating a durable floor.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- The Oil price reflects strength as the Strait of Hormuz remains closed.
- Washington states that Iran’s proposal to end the war is not good enough.
- Citi expects Brent Crude Oil to extend the rally to $150 if Hormuz remains closed through the end of June.
West Texas Intermediate (WTI), futures on NYMEX, trades over 1% above $96.00 during the European trading session on Tuesday. The Oil price demonstrates broader strength as the global energy crisis remains intact in the wake of the long closure of the Strait of Hormuz, a vital passage to almost 20% of global energy supply.
The uncertainty over the Hormuz closure remains high amid stalled peace talks between the United States (US) and Iran. Washington is showing the least interest in resuming negotiations with Iran, citing that their proposal “is not good enough”. Meanwhile, Iran wants the US to lift its blockade on Iranian ships as a precondition for negotiations on Tehran’s nuclear ambitions.
Market experts have warned that oil prices could rise further as long as the Strait of Hormuz remains closed. Under a bull-case scenario, Citibank assumes oil flows through the strait remain disrupted through the end of June and sees Brent prices spiking to $150 a barrel. As of writing, Brent Crude Oil trades 1.1% higher to near $103.
Meanwhile, investors await monetary policy announcements from key global central banks, including the Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of England (BoE), to get fresh cues on the global oil demand outlook.
WTI technical analysis
WTI US Oil trades higher at around $96 as of writing. The near-term tone stays constructive as price holds above the 20-day exponential moving average (EMA) at roughly $92.12.
Momentum, reflected by the Relative Strength Index (14) hovering in the mid-50s, suggests mild bullish pressure rather than overbought conditions, leaving scope for further gains while the contract remains supported above its short-term EMA.
On the topside, initial resistance is seen at the prior downward-trending border of the Symmetrical Triangle around $100.37, where a clear close higher would open the door to a more decisive bullish extension. On the downside, immediate support emerges at the 20-day EMA near $92.12, with the rising structural floor from the upward-sloping border of the above-mentioned chart pattern sitting much lower around $80.01; a drop through this latter area would significantly undermine the current bullish bias.
(The technical analysis of this story was written with the help of an AI tool.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Commerzbank’s Volkmar Baur highlights that the Bank of Japan kept its policy rate at 0.75%, but sent a clear signal it is ready to hike soon, likely at the June meeting. Markets now price a roughly 75% probability of a move, supported by a more hawkish outlook and higher inflation forecasts, with potential additional JPY support if Governor Ueda reinforces this stance at his press conference.
BoJ prepares market for tightening
"The time just has not come yet: At its monetary policy meeting this morning, the Bank of Japan left its key interest rate unchanged at 0.75%, as the market, most analysts, and we had expected. The signal is clear, however: the BoJ is ready to raise interest rates soon."
"We have long expected the Bank of Japan to raise interest rates at its next meeting in June, and the market is currently pricing in such a move with a probability of around 75% this morning - 10 percentage points higher than yesterday."
"On the one hand, the 6-3 vote points to an imminent move. This was two dissenting votes more than last time and one more than most had expected. Furthermore, the published economic outlook reads quite hawkish, with many references to the risk of rising inflation."
"In the new forecasts released alongside the statement, the central bank also raised its inflation forecast for this fiscal year (which began in April) from 1.9% to 2.8% and now expects higher inflation even in the coming year."
"However, indications in the outlook that the 2% inflation target is now expected to be met in the second half of this fiscal year, and that the bank now intends to assess “the timing and pace” of monetary policy adjustments, speak quite clearly. A further clear commitment from Ueda during the presser would certainly provide additional support for the JPY."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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