Forex News

Rabobank’s Global Daily notes the Euro is weaker in early Asian trading despite a decisive victory for Peter Magyar’s pro‑EU Tisza party over Viktor Orban’s Fidesz in Hungary. Michael Every argues Magyar’s win may ease one internal EU obstacle but warns that further EU‑Budapest tensions are likely and broader geopolitical and geoeconomic pressures on Europe remain intense.

Hungarian vote and Euro reaction

"The Euro is 0.32% lower early in the Asian session despite news over the weekend that Peter Magyar’s comparatively pro-EU Tisza party has comprehensively defeated incumbent Viktor Orban’s Fidesz party – securing a two-thirds majority in the 199 seat parliament."

"Ironically, in the weekend’s Hungarian election result Brussels and EU capitals may see parallels to 1956’s Hungarian Uprising."

"Magyar’s defeat of Orban potentially removes a major internal obstacle to EU efforts to deal with the conflux of geopolitical and geoeconomic crises plaguing it."

"That said, Magyar is hardly a Eurocrat."

"Further EU-Budapest tensions may yet lie ahead, while Czechia and Slovakia are still Orban-esque in their own right."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

EUR/USD remains trapped within a tight range between 0.8695 and 0.8725.

Higher Oil prices are keeping Euro upside attempts limited on Monday.

On Wednesday, BoE's Bailey and ECB's lagarde might give a fresh impulse to the pair.

The Euro (EUR) shows a netvous consolidation around the 0.8700 line against the British Pound (GBP) on Monday. Market sentiment has deteriorated following the failure of the peace talks between the US and Iran. Still, the two-week ceasefire remains in place, fuelling hopes of further negotiations and keeping market volatility at relatively low levels so far.

Investors, however, have been reluctant to place large Euro bets during Monday’s Asian and early European sessions, which leaves the EUR/GBP pair looking for direction within a 25-pip range. The doji candles in the daily calendar highlight a hesitant market.

The higher oil prices amid the US vow to block the Strait of Hormuz are likely to keep Euro upside attempts limited. On Wednesday, the speeches by Bank of England (BoE) Governor Andrew Bailey and the European Central Bank (ECB) President Christine Lagarde might give a fresh impulse to the pair.

Technical Analysis

From a technical point of view, the EUR/GBP maintains a mild bullish bias, yet with momentum fading. The 4-Hour Relative Strength Index (RSI) is hovering near the neutral 50 level, and the Moving Average Convergence Divergence (MACD) edges up right above the zero line, showing a lack of a clear bias.

Bulls have been capped at 0.8722 on Monday, closing the way towards the April highs in the 0.8740 area. Further up, the year-to-date high awaits at 0.8789, although the pair is likely to need additional impetus to approach those levels

On the downside, the confluence of Friday's lows and the ascending trendline from mid-March lows, now around 0.8705, is likely to challenge bears ahead of the April 8 low, at 0.8687. Further down, the March 24 and 26 lows, near 0.8635, might attract sellers.

(The technical analysis of this story was written with the help of an AI tool.)

• Australian Dollar exhibits mixed performance against its major pairs amid a risk-off mood.
• The US-Iran first round of talks fails as Tehran refuses to give up its nuclear ambitions.
• Investors await the US PPI and the Australian employment data for March.

The Australian Dollar (AUD) demonstrates a mixed performance against its major currency peers, still trading 0.2% lower to near 0.7050 against the US Dollar (USD) during the European trading session on Monday, even after recovering a major chunk of its opening losses.

Market sentiment remains risk-averse amid the failure of the first round of negotiations between the United States (US) and Iran, which has resulted in a sharp recovery in oil prices. S&P 500 futures trade over 0.6% lower to near 0.6760, reflecting a dismal market mood.

Over the weekend, scheduled talks between the US and Iran in Pakistan, regarding a permanent ceasefire, failed, as Tehran denies giving up its intentions to build nuclear facilities.

Renewed Middle East conflicts have improved the safe-haven demand of the US Dollar (USD). As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.25% higher to near 99.00.

On the macro front, investors await Australian labor market data for March, which will be released on Thursday. The data is expected to show that the economy created 20K jobs, lower than 48.9K in February. The Unemployment Rate is seen steady at 4.3%.

In the US, investors await the Producer Price Index (PPI) data for March, which will be released on Tuesday. Investors will pay close attention to the producer inflation data to get fresh cues on the Federal Reserve’s (Fed) monetary policy outlook. Month-on-Month US headline PPI is expected to have risen at a faster pace of 1.2% against the previous reading of 0.7%.

• USD/JPY attracts buyers for the third straight day as failed US-Iran talks boost the USD.
• Economic concerns due to the Iran war undermine the JPY and also support spot prices.
• Intervention fears limit deeper JPY losses and act as a headwind for the currency pair.

The USD/JPY pair opens with a bullish gap at the start of a new week, though it lacks follow-through buying and remains below the 160.00 psychological mark heading into the European session. Meanwhile, the fundamental backdrop remains supportive of the bid tone for the third straight day and backs the case for a further near-term appreciating move.

The Japanese Yen (JPY) continues with its relative underperformance amid economic concerns stemming from rising geopolitical tensions in the Middle East, which, along with a broadly firmer US Dollar (USD), act as a tailwind for the USD/JPY pair. Market players remain worried that Japan's economy will face significant headwinds due to instability in the Strait of Hormuz. In fact, US President Donald Trump said that the US Navy would start blockading the strategic waterway after the failed US-Iran peace talks over the weekend.

Despite nearly 21 hours of intense discussions, high-level negotiations between the US and Iran ended without a breakthrough. Moreover, continued Israeli strikes in Lebanon raise the risk of a re-escalation of tensions, triggering a sharp intraday rally in Crude Oil prices and fueling inflation fears. The resultant spike in Japanese government bond yields (JGB) highlights Japan’s vulnerability to external energy shocks and weighs on the JPY. Meanwhile, the stalemate benefits the USD's reserve currency status and supports the USD/JPY pair.

Furthermore, expectations that the US Federal Reserve (Fed) will adopt a more hawkish stance, amid renewed inflationary fears due to the war-driven surge in energy prices, turn out to be another factor underpinning the buck. However, speculations that Japanese authorities would step in to stem further weakness in the domestic currency hold back traders from placing aggressive bearish bets around the JPY. This, in turn, keeps a lid on any meaningful appreciation for the USD/JPY pair and warrants some caution before positioning for further gains.

Commerzbank’s Tatha Ghose highlights that Hungary’s election delivered a supermajority for Peter Magyar’s Tisza party, easing transition risks and opening scope for structural reforms. While global war-related volatility may limit immediate gains, the bank notes EUR/HUF has already traded near 365 and signals a downward revision from its previous 380 end-June forecast, implying a stronger Forint profile.

Political shift and FX repricing

"Yesterday, the Hungarian electorate voted overwhelmingly for regime change: Peter Magyar’s opposition Tisza party (is assumed to have) garnered a supermajority in parliament – with roughly 69% of the parliamentary mandate compared with 28% for Orban’s Fidesz – which will allow it to deliver on bold promises to dismantle the erstwhile right-wing “illiberal system”."

"Of course, the supermajority will give him a more credible opportunity to start from a blank slate, and hence, the outcome will likely turn out to be more positive than our base-case in which Tisza would have won a simple majority."

"In our preview, we wrote that EUR/HUF could reach 365 after elections, if the Iran war situation were to permit."

"Hence, the benefit to the forint may or may not fully materialise against a more volatile global backdrop."

"Regardless, we will be revising our EUR/HUF forecast level downward from our forecast 380 for end-June."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Here is what you need to know on Monday, April 13:

Financial markets turn risk-averse at the beginning of the week after Iran and the United States (US) failed to make any progress in this weekend's negotiations. The only data featured in the US economic calendar will be Existing Home Sales for March.

US President Donald Trump explained that they had "very friendly" talks and that Iran agreed to "just above every point" the US needed. However, Iran's refusal to commit to giving up its nuclear ambitions caused negotiations to stall.

While speaking to reporters on Sunday, President Trump noted that the two-week ceasefire between the US and Iran is holding well, despite failed talks. Meanwhile, the US military said it will enforce a blockade on all naval traffic in and out of Iranian ports in the Strait of Hormuz from 10:00 EST Monday. According to the Wall Street Journal (WSJ), Trump and his advisers are considering resuming military strikes in addition to the blockade to force Iran to accept the US' terms to end the conflict.

Crude oil prices opened with a large bullish gap. At the time of press, the barrel of West Texas Intermediate (WTI) was trading near $96, rising about 6% on a daily basis. Reflecting the risk-averse market atmosphere, US stock index futures lose between 0.6% and 0.7% on the day, while the US Dollar (USD) Index gains more than 0.3% on the day near 99.00. The data from the US showed on Friday that annual inflation, as measured by the change in the Consumer Price Index (CPI), climbed to 3.3% in March. This print followed 2.4% in February and came in line with market expectations. On a monthly basis, the CPI rose 0.9%, as forecast, after the 0.3% increase recorded in February.

After posting gains in the previous week, Gold declined sharply in the opening hours and touched a six-day low below $4,650. XAU/USD rebounds in the European morning and trades above $4,700.

EUR/USD started the week deep in the red but managed to find support. The pair edges higher toward 1.1700 in the early European session, still down about 0.3% on the day.

GBP/USD gained nearly 2% in the previous week but opened with a bearish gap. At the time of press, the pair was trading slightly above 1.3400, losing 0.35% on a daily basis.

USD/JPY continues to push higher and trades above 159.50 after posting gains for two consecutive days. Bank of Japan (BoJ) Governor Kazuo Ueda said in his prepared remarks in a speech during the European trading session on Monday that the economic recovery is modest in the wake of the war in the Middle East. Ueda reiterated confidence that the underlying inflation is gradually moving towards the central bank’s target.

• The Indian Rupee declines sharply at open against the US Dollar as oil prices rally, following the failure of US-Iran talks.
• US President Trump instructs the Navy to blockade Iranian ports
• US gas prices will stay elevated through the November elections.

The Indian Rupee (INR) falls sharply in the opening trade against the US Dollar (USD) at the start of the week. The USD/INR pair rises to near 93.35 as rallying oil prices due to the announcement of a complete blockade of the Strait of Hormuz, a passage to almost 20% of global energy supply, by the United States (US) Navy, as instructed by President Donald Trump, have weighed heavily on the Indian Rupee.

Currencies from economies, such as India, that rely heavily on oil imports to meet their energy needs tend to underperform in a high oil price environment.

Trump announces blockade of Hormuz

US President Trump announced, through a post on Truth Social, he has ordered the Navy for a complete blockade of Iranian ports, as part of retaliation against Iran after the failure of peace talks with them.

“Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all ships trying to enter, or leave, the Strait of Hormuz.” Trump wrote. He added, “I have also instructed our Navy to seek and interdict every vessel in International Waters that has paid a toll to Iran. No one who pays an illegal toll will have safe passage on the high seas.”

In response, US Central Command (CENTCOM) announced that the “Forces will start blockade of all maritime traffic entering and exiting Iranian ports on Monday, 10 AM ET” (14:00 GMT).

Negotiations regarding the permanent ceasefire in the Middle East collapsed on Iran’s refusal to drop its nuclear ambitions, as per Trump’s Truth Social post. At the start of the week, the WTI Oil price trades around $97.00.

Higher US Dollar also supports USD/INR

Renewed conflicts between the US and Iran have improved the safe-haven demand of the US Dollar. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.3% higher to near 99.00.

In addition to the risk-off impulse, growing expectations that a higher oil price outlook would keep encouraging the Federal Reserve (Fed) to maintain a hawkish stance on interest rates have also strengthened the US Dollar.

US President Trump’s acknowledgment, in an interview with Fox Business, that gas prices could remain elevated through the November elections, a contradictory verdict from the one who had called several times that higher energy prices due to Middle East conflicts would be temporary, has prompted fears of de-anchoring inflation expectations.

“I hope so, I mean, I think so. It could be, it could be, or the same, or maybe a little bit higher,” Trump responded when asked whether oil and gas prices would fall ahead of the midterm elections, which are expected to produce dire results for Republicans, The Daily Beast reported.

India's CPI data awaited

On the domestic front, investors await India's Consumer Price Index (CPI) data for March, which will be published at 04:00 PM (10:30 GMT). India's retail inflation is estimated to have grown at a faster pace of 3.48% Year-on-Year (YoY) against February's reading of 3.21%.

Technical Analysis: USD/INR recovers to near 93.35

USD/INR trades higher at around 93.40 in the opening trade on Monday. With price returning above its 20-day exponential moving average (EMA), which is at 92.96, the short-term tone of the pair turns bullish, though the lack of nearby mapped resistance levels argues for a more neutral overall bias.

The Relative Strength Index (RSI) at 56.41 sits in neutral territory, suggesting steady rather than aggressive bullish momentum as the spot consolidates after its recent advance.

On the downside, the 20-day EMA at 92.96 is the first meaningful dynamic support, and a daily close back below this area would expose the pair to its key support zone around 92.43. On the topside, the pair could extend its recovery towards 94.00, and might try to reclaim its all-time high of 95.14 after breaking above that level.

(The technical analysis of this story was written with the help of an AI tool.)

• Eur/USD reversal from last week's highs near 1.1740 has been contained above 1.1670 so far.
• The Euro remains relatively steady despite the failure of the Iran talks and the US blockade of Hormuz.
• Markets remain confident that the US-Iran negotiations will resume soon.

The (EUR) retreated from last week’s highs near 1.1740 against the US Dollar (USD) on Monday, but so far is holding well in the upper 1.1600s. The pair is trading at 1.1685 at the time of writing, having been supported at 1.1670 earlier in the day.

The failure of the peace negotiations between the US and Iran and the US pledge to block the Strait of Hormuz have sent Oil prices jumping again, reviving demand for the safe-haven US Dollar. The negative impact on the Euro, however, remains limited so far. 

According to Commercebank’s analyst, Thu Lan Nguyen, hopes of de-escalation in the US-Iran war are keeping Euro bears at bay: "At the time of writing, market movements remain limited. Brent crude is trading at just above 100 USD per barrel, and EUR/USD has slipped to below 1.17 - a good distance away from the extreme levels seen during this conflict (...) As long as the market remains hopeful, risk premiums, such as implied EUR/USD volatility, are likely to stay at comparatively low levels."

The economic calendar is thin today, and news from Iran is likely to continue to drive markets. On Tuesday, all eyes will be on European Central Bank’s (ECB) President, Christine Lagarde, who might shed some more light on the monetary policy decision due on April 30.

Technical Analysis: The broader trend remains positive

EUR/USD is holding a mildly bullish near-term bias as it consolidates above previous highs, in the area of 1.1630. Momentum is cooling from earlier overbought readings, with the Relative Strength Index around mid-50s and the Moving Average Convergence Divergence (MACD) hovering close to the zero line, hinting at a pause rather than a full reversal of the recent advance.

On the topside, immediate resistance is located in the 1.1725 -1.1735 area, with further hurdles emerging at 1.1825 (February 26 and March 1 highs) ahead of the February 10 and 11 highs, near 1.1930.

On the downside, the session low at 1.1670 is likely to provide some support, followed by the mentioned 1.1630-1.1640 area (March 23, 25 highs and April 8 low). Further down, the most plausible target is the rising trend support from the March 30 low, now around 1.1590.

(The technical analysis of this story was written with the help of an AI tool.)

and

DBS Group Research’s Philip Wee argues that stagflation will dominate the agenda at the International Monetary Fund (IMF) and World Bank Spring Meetings following President Trump’s Strait of Hormuz blockade. He expects the IMF’s World Economic Outlook to downgrade global growth and single out Asia as particularly vulnerable due to its dependence on Hormuz-linked industrial inputs.

Stagflation and global exposure to Hormuz

"US President Donald Trump announced a drastic policy shift by ordering the US Navy to start blockading the Strait of Hormuz by interdicting every vessel in international waters that paid a toll to Iran for safe passage in the Strait."

"Trump’s Hormuz blockade also appears to be a maritime compellence campaign that directly rebukes US allies who refused to support the US conflict against Tehran. Trump’s March 17 address characterized NATO and Asian security partners as "free riders" who agreed with the mission but refused to "share the burden.""

"Following the US Supreme Court’s ruling that stripped President Trump of his ability to use the International Emergency Economic Powers Act (IEEPA) for broad-based tariffs, the administration also appears to be weaponizing physical energy security to achieve the same mercantilist ends against its primary trade deficit partners in Europe and Asia. "

"The IMF World Economic Outlook (WEO), to be released on April 14, will likely include a downgrade to global growth, flagging Asia as the most exposed region due to its high dependency on the Strait of Hormuz for industrial inputs."

"Hence, expect stagflation to dominate discussions at this week’s International Monetary Fund and World Bank Spring Meetings in Washington, D.C."

"IMF Managing Director Kristalina Georgieva warned that it would take some time for global prices to come down to levels seen before Operation Epic Fury began on February 27."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Gold kicks off the new week on a downbeat note as the failed US-Iran peace talks underpin the USD.
• The door for further diplomacy remains open, capping the USD and supporting the commodity.
• Rallying Oil prices fuel inflationary fears and hawkish Fed bets, which should cap the XAU/USD pair.

Gold (XAU/USD) struggles to capitalize on its goodish intraday bounce from the $4,633-$4,632 area, or a four-day low touched earlier this Monday, and retains its negative bias heading into the European session. The Wall Street Journal, citing officials familiar with the matter, reported that regional countries are racing to bring the US and Iran back to the negotiating table within days after talks over the weekend ended without an agreement. This keeps the door open for further diplomacy and fails to assist the US Dollar (USD) in capitalizing on its intraday gains, which turns out to be a key factor offering some support to the commodity. However, the lack of follow-through buying, along with a bearish fundamental backdrop, warrants caution before positioning for any meaningful upside for the precious metal.

US Vice President JD Vance said that he placed a final and best offer on the table, but Iran declined to accept the terms, leading to a stalemate. Iranian state media said that excessive demands sank the possibility of a deal. Meanwhile, US President Donald Trump said on Sunday the US Navy would start blockading the Strait of Hormuz, jeopardizing a fragile two-week ceasefire. Moreover, continued Israeli strikes in Lebanon raise the risk of a renewed escalation of tensions in the Middle East, which could benefit the USD's reserve currency status. This, along with expectations that major central banks will adopt a more hawkish stance due to the war-driven surge in energy prices, might contribute to capping the upside for the non-yielding Gold.

In fact, West Texas Intermediate (WTI) – the benchmark US Crude Oil price – rallies back to the $105/barrel mark in reaction to the latest geopolitical developments. This comes on top of data released on Friday, which showed that inflation in the US surged by the most in nearly four years during March. According to the US Bureau of Labor Statistics, the headline US Consumer Price Index (CPI) rose 0.9% from February and picked up to 3.3% from a year ago. This led investors to abandon bets on Fed rate cuts this year and shift focus to potential interest rate hikes. The outlook, in turn, triggers a fresh leg up in US Treasury bond yields and validates the USD bullish bias, warranting caution before placing aggressive bullish bets around the XAU/USD pair.

XAU/USD 1-hour chart

Gold needs to surpass 100-hour SMA support breakpoint to back any further recovery

The commodity maintains a mildly bearish near-term tone as it holds beneath the 100-hour Simple Moving Average (SMA) support breakpoint. Moreover, the Moving Average Convergence Divergence (MACD) remains in negative territory despite contracting bearish readings. Adding to this, the Relative Strength Index (RSI) lingers below the midline near 44, suggesting that downside pressure persists but with waning momentum.

On the topside, immediate resistance is located at the 100-hour  SMA around $4,732.63, and a sustained break above this barrier would be needed to ease the current downside bias and open the way for a stronger recovery. On the flip side, any pullback from current levels would likely see traders watching prior session lows and short-term swing troughs as the next potential demand areas.

(The technical analysis of this story was written with the help of an AI tool.)