Forex News

• USD/JPY advances to a one-month high, surpassing the key 160.00 level.
• The US Dollar remains supported as markets await the Fed’s policy decision.
• Japanese authorities maintain intervention threats in response to persistent JPY weakness.

USD/JPY trades higher on Wednesday around 160.25, up 0.40% on the day and reaching a one-month high, close to the March 30 peak at 160.46. The pair is now approaching a highly sensitive level for Japanese authorities, with 160.00 widely seen as a red line that could trigger intervention in the foreign exchange market.

The upward move is primarily supported by the resilience of the US Dollar (USD), as markets remain cautious ahead of the Federal Reserve (Fed) monetary policy decision. Investors broadly expect a status quo on interest rates within the 3.5%-3.75% range, keeping the Greenback firm against its major peers. Attention now turns to Chair Jerome Powell’s communication, as his remarks could shape interest rate expectations in an environment marked by geopolitical tensions and elevated energy prices.

Political uncertainty surrounding the Fed leadership transition is adding another layer of caution. With Jerome Powell’s term set to expire in May, the potential appointment of Kevin Warsh is fueling speculation, though it has not yet altered expectations of a prolonged restrictive monetary stance.

On the Japanese side, the Bank of Japan (BoJ) recently left its policy rate unchanged while reaffirming its commitment to gradual monetary tightening. However, the impact on the Japanese Yen (JPY) remains limited due to the still-wide rate differential with the United States, which continues to favor carry trade strategies, weighing on the Japanese currency.

Meanwhile, Japanese authorities are stepping up their vigilance. Finance Minister Katsunobu Kato recently warned of possible decisive action against speculative moves, suggesting that coordinated intervention could be considered if volatility intensifies. This stance is helping to partially cap USD/JPY gains while maintaining underlying tension around the 160.00 level.

OCBC analysts also highlight this intervention risk, noting that any sustained move above 160.00 could prompt action from the Ministry of Finance to stabilize the currency, especially as rising energy prices and JPY weakness continue to weigh on the Japanese economy.

• The US Federal Reserve is expected to leave the policy rate unchanged for the third consecutive meeting in April. 
• The economic uncertainty created by the Middle East crisis clouds the Fed’s policy outlook.
• Fed Chair Powell’s comments could ramp up USD volatility as markets see a strong chance of the bank maintaining the status quo by end-2026.

The United States (US) Federal Reserve (Fed) announces its interest rate decision on Wednesday, another pivotal meeting for markets to gauge the stance of policymakers as energy prices remain uncomfortably high amid ongoing uncertainty in the Middle East, putting the Fed’s dual mandate under strain. 

Markets widely expect the Federal Open Market Committee (FOMC) to keep interest rates unchanged in the range of 3.5%-3.75% for the third consecutive meeting in April. 

As this decision is fully priced in, Fed Chair Jerome Powell’s comments in his last post-meeting press conference, given his term ends in over two weeks, could offer key clues on the policy outlook and drive the US Dollar’s (USD) performance. 

Republican Senator Thom Tillis, who took a stance to block any Fed Chair nominee while the probe into Jerome Powell remained open, announced that he is prepared to move on with the confirmation of Kevin Warsh after the Department of Justice dropped the investigation on Friday. Warsh is now widely expected to become the US central bank’s new chair from May 15, when Powell’s current term ends.

The CME FedWatch Tool shows that investors see little to no chance of a rate cut at least until September, while pricing in about an 80% probability that interest rates will remain where they currently are by end-2026. Earlier in the year, there were strong expectations of multiple interest rate reductions, but surging Oil prices and the potential impact on global inflation caused investors to reassess their outlooks.

The revised Summary of Economic Projections (SEP) published in March showed that policymakers’ median projection pointed to a 25 basis points (bps) cut this year, unchanged from the SEP published in December 2025. However, the minutes of the March meeting highlighted that many participants saw risk of inflation remaining elevated for longer than expected amid persistent Oil price increase, which could even call for rate hikes.

TD Securities analysts note they expect the Fed policy rate to remain unchanged in April. “The labor market remains balanced, while headline inflation has ticked up owing to the oil shock. With uncertainty still high, the Committee will likely reiterate patience. Powell is likely to stay neutral on policy and avoid new comments on succession, despite this being originally slated as his final meeting,” they explain.

When will the Fed announce its interest rate decision and how could it affect EUR/USD?

The Fed is scheduled to announce its interest rate decision and publish the monetary policy statement at 18:00 GMT. This will be followed by Fed Chair Jerome Powell's press conference starting at 18:30 GMT. 

The rate decision itself is unlikely to trigger a significant market reaction, but investors will scrutinize Fed Chair Powell’s remarks.

Powell is likely to reiterate that they need more time and data to assess whether high inflation will persist. Until now, Powell has refrained from hinting at a potential rate hike. In case he notes that option could be on the table in future meetings if the Middle East conflict prolongs and keeps Oil prices elevated, the immediate market reaction could help the USD gather strength against its rivals. 

Although markets remain cautiously optimistic about a permanent truce between the US and Iran, the ongoing blockade of Iranian ports by the US military and Tehran’s reluctance to progress with negotiations until the blockade is removed don’t allow Oil prices to return to pre-war levels. The barrel of West Texas Intermediate (WTI), which was trading at around $65 before the US and Israel attacked Iran on February 28, seems to have settled above $90.

Conversely, market participants could start pricing in a September rate cut if Powell notes that the Fed will need to tilt its focus back to supporting the labor market once the situation in the Middle East is resolved. Investors could also assess Powell’s tone as being dovish if he pushes back against policy-tightening expectations and sounds optimistic about inflation quickly softening again, driven by a correction in Oil prices. In this scenario, the USD could come under selling pressure and pave the way for a bullish action in EUR/USD in the near term.

“We expect Fed Chair Powell to reiterate that the Fed’s current policy stance is appropriate, implying a high bar to resume easing. Watch out to see if Powell confirms any discussion on the next move being a hike,” BBH analysts note.

“Remember, the FOMC March meeting minutes highlighted that ‘many’ participants would favor rate increases to help bring inflation down to the 2% target in case of a lengthy war,” they further highlight.

Eren Sengezer, European Session Lead Analyst at FXStreet, provides a short-term technical outlook for EUR/USD:

“The technical outlook points to a lack of bullish momentum in the short term. EUR/USD trades slightly above the mid-line of Bollinger Bands and holds above the 100-day and the 200-day Simple Moving Averages (SMA). Additionally, the Relative Strength Index (RSI) indicator on the daily chart moves sideways slightly above 50.”

“On the upside, 1.1800 (Fibonacci 61.8% retracement of the February-April downtrend) aligns as the next resistance level before 1.1870 (upper Bollinger Band) and 1.1900-1.1910 (round level, Fibonacci 78.6% retracement). In case the pair drops below the 1.1700-1.1680 region, where the 100-day and the 200-day SMAs align, and settles there, technical sellers could show interest. In this case, the next important support level could be spotted at 1.1560 (Fibonacci 23.6% retracement) before 1.1500 (static level, round level).”

• DJIA futures traded near 48.8K at the time of writing, slipping below 49K as risk appetite faded into the Federal Reserve decision.
• Stronger than expected March Durable Goods Orders complicated the inflation picture as Oil extended gains on US-Iran tensions.
• Federal Open Market Committee (FOMC) is widely expected to hold rates steady at 3.75% at what is likely Jerome Powell's final meeting as Fed Chair.
• Kevin Warsh cleared the Senate Banking Committee, with his Fed Chair nomination heading to a full Senate vote.

Dow Jones Industrial Average futures drifted lower through Wednesday's session, trading close to 48.8K at the time of writing after rejecting levels above 49.3K during the prior day. The S&P 500 hovered around the flatline alongside the Nasdaq Composite, with traders holding back ahead of the Federal Reserve (Fed) decision later in the session and a heavy slate of mega-cap technology earnings due after the closing bell.

Durable Goods beat keeps inflation watch live

March Durable Goods Orders rose 0.8% MoM, ahead of the 0.5% consensus and a sharp turnaround from the prior month's 1.2% contraction. The core reading, Nondefense Capital Goods Orders excluding Aircraft, jumped 3.3% MoM against expectations of 0.6%, pointing to firm business investment heading into the second quarter. Sticky capex demand reinforces the view that activity has not buckled despite higher input costs, which keeps inflation risks alive just as Oil prices grind higher. Defense-related orders also continue to run hot, with elevated military procurement tied to the ongoing Strait of Hormuz situation feeding into the headline series.

Oil rally adds pressure to risk assets

US West Texas Intermediate (WTI) crude extended its rally for another session after reports that the White House has instructed officials to prepare for an extended US blockade of Iranian ports. WTI advanced around 5% to trade above $105 per barrel at the time of writing, while Brent crude pushed past $117. Higher Oil prices feed directly into goods inflation and consumer sentiment, leaving the Fed with the kind of stagflation overlay that policymakers have been trying to avoid since the start of the year.

Powell's final meeting takes the spotlight

The April FOMC meeting concludes at 18:00 GMT, with the press conference following at 18:30 GMT. Markets are fully priced for a hold at 3.75%, so the focus will be entirely on the policy statement language and Powell's tone around inflation risks tied to Oil and the broader Middle East backdrop. This is widely expected to be Powell's final rate call as Fed Chair, with his term at the helm of the central bank ending in May. Any nod to the cumulative impact of higher energy costs on the inflation path could move the front end of the curve.

Warsh nomination heads to full Senate

Kevin Warsh, President Trump's pick to succeed Powell, cleared the Senate Banking Committee and his nomination now moves to the full Senate floor. The vote will have to wait, with the Senate on recess until after May 4. Warsh, a former Fed Governor, has historically leaned hawkish on inflation, and rates traders will be watching closely for any signals on his preferred policy stance heading into the transition.

Mega-cap tech earnings cap the day

Four of the so-called Magnificent Seven names report after the bell: Alphabet (GOOGL), Amazon (AMZN), Meta (META) and Microsoft (MSFT). With OpenAI's reported revenue and user growth misses still fresh, traders are looking for forward guidance that justifies the capex these names have committed to artificial intelligence (AI) infrastructure. Better than expected prints from Seagate (STX) and NXP Semiconductors (NXPI) on Tuesday, both of which jumped after delivering positive guidance, set a more constructive tone for chip-adjacent names heading into the close.

Dow Jones 15-minute chart

• The BoC held its policy rate at 2.25% for a fourth straight meeting, while Macklem warned policy may need to be nimble.
• Trump issued a fresh Iran threat with an AI-generated image on Truth Social, saying Tehran 'better get smart soon!'

USD/CAD traded essentially flat on Wednesday, last seen near 1.3680 after a brief whipsaw spike to about 1.3710 was quickly retraced. The session was otherwise subdued, with the pair holding a tight 40-pip band through most of the European morning before a sharp upside burst printed the intraday high; the move was faded inside the same hour. The rejection from the highs leaves a clear upper wick close to the top of the two-day range built off Tuesday's bounce from levels close to 1.3600.

The Bank of Canada (BoC) kept its overnight rate target at 2.25% for a sixth straight meeting, matching consensus and extending the pause begun after the October 2025 cut. Governor Tiff Macklem told reporters the Governing Council agreed to "look through" the immediate inflation impact of higher energy prices tied to the Iran war, but cautioned that policy "may need to be nimble" given the wide range of possible outcomes. Under the Bank's baseline scenario in the quarterly Monetary Policy Report (MPR), which assumes Crude Oil falls back to $75 per barrel by mid-2027, "changes in the policy rate can be expected to be small," Macklem said; he warned, however, that if elevated Crude prices bleed into broader inflation, "there may be a need for consecutive increases in the policy rate."

Read more: Inflation expectations are not as well anchored as they were before Covid

On the US side, the session's whipsaw came after President Donald Trump posted on Truth Social shortly after 4 a.m. ET, threatening fresh action against Iran with an AI-generated image of himself holding a rifle in front of explosions and the caption "No More Mr. Nice Guy." Trump wrote that Iran "can't get their act together" and "better get smart soon," adding that Tehran does not know how to sign a nonnuclear deal. The post landed with US-Iran talks stalled and the Strait of Hormuz blockade still effectively halting roughly 20% of global oil shipments; West Texas Intermediate (WTI) Crude pushed above $100 per barrel, supporting the commodity-linked Loonie and capping any sustained move higher in USD/CAD even as the headline briefly bid the safe-haven Greenback. Focus now turns to the Federal Reserve (Fed) decision at 18:00 GMT, with the federal funds rate widely expected to stay in the 3.50% to 3.75% range.

USD/CAD 15-minute chart

Technical Analysis

In the fifteen-minute chart, USD/CAD trades at 1.3678. The pair holds marginally above the daily open at 1.3677, leaving a neutral intraday bias as price consolidates in a tight range. The latest Stochastic RSI reading near 47.95 sits close to midline territory, hinting at balanced short-term momentum without a clear directional conviction for now.

On the downside, the immediate level to watch is the day’s open at 1.3677, which acts as nearby support and a pivot for very short-term sentiment. A sustained break beneath this floor would expose lower intraday levels, while holding above it could keep USD/CAD locked in range-bound trade until a fresh momentum impulse emerges.

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

• NZD/USD declines as investors remain cautious ahead of the Fed’s policy decision.
• Expected pause in US rates supports the US Dollar in a higher-for-longer environment.
• Iran-related tensions and Hormuz Strait risks weigh on sentiment and limit Kiwi upside.

NZD/USD trades lower around 0.5840 on Wednesday at the time of writing, down 0.76% on the day, as markets adopt a wait-and-see stance ahead of the Federal Reserve (Fed) monetary policy decision later in the day.

The NZD/USD pair remains under pressure as investors widely expect the Fed to keep interest rates unchanged within the 3.5%-3.75% range, marking a fourth consecutive hold. Focus now shifts to Fed Chair Jerome Powell’s press conference, which could offer clues on the future policy path, particularly as inflation continues to run above the 2% target.

A hawkish tone from the Federal Reserve (Fed), emphasizing persistent inflation risks, could support the US Dollar (USD) and add further downside pressure on NZD/USD in the near term. Conversely, any hints that policymakers remain open to rate cuts later this year might cap the Greenback’s strength, although it may not be enough to reverse the broader trend amid prevailing uncertainty.

On the political front, a potential leadership transition at the Fed is also drawing attention after Kevin Warsh was confirmed by the US Senate Banking Committee. He still needs full Senate approval to succeed Jerome Powell, whose term ends in May, adding another layer of uncertainty for markets.

Meanwhile, geopolitical tensions in the Middle East continue to weigh on market sentiment. Comments from US President Donald Trump regarding Iran and the potential extension of the Strait of Hormuz blockade are fueling concerns over global energy supply. The resulting rise in Oil prices is reinforcing inflationary pressures and supporting expectations of a prolonged higher-rate environment.

In this context, safe-haven demand for the US Dollar (USD) remains firm, putting pressure on risk-sensitive currencies such as the New Zealand Dollar (NZD). While any signs of easing tensions between the US and Iran could temporarily improve risk appetite, persistent uncertainty is likely to limit any meaningful recovery in the Kiwi in the near term.

As widely expected, the Bank of Canada (BoC) delivered an expected hold at 2.25%, but the details suggested a more nuanced backdrop.

Indeed, the bank’s projections pointed to somewhat stronger medium-term growth despite a current weaker near-term momentum. That said, inflation was revised up for 2026, indicating that the disinflation path may not be perfectly smooth, while wage growth remains sticky in the 3% to 3.5% range. That said, the economy is cooling, but not enough to fully eliminate price pressures.

At the usual press conference, Governor Tiff Macklem struck a cautious and flexible tone. He stressed there is no preset path for rates and no “risk-free” policy choice, further reinforcing the bank’s data-dependent stance.

Of note, Macklem did not rule out further tightening: if energy prices stay elevated for longer, a rate hike could be needed. However, he also pushed back against acting too early, noting that existing slack in the economy should limit the pass-through of higher energy costs.

He also flagged a key risk: inflation expectations may not be as well anchored as before the COVID pandemic, even if confidence in the BoC’s credibility remains intact.

Additionally, Deputy Governor Carolyn Rogers said that trade tensions pose a more persistent long-term risk than oil, while reminding that households remain highly sensitive to inflation.

To sum up

This was a central bank in wait-and-see mode, but not leaning dovish. Inflation risks still tilt slightly to the upside, keeping early rate cut expectations in check while leaving the door open, at least conditionally, to further tightening.

Tiff Macklem faced the press shortly after the decision, offering markets a clearer sense of the central bank’s thinking. The appearance followed the widely expected move by the Bank of Canada to hold the policy rate steady at 2.25%.

BoC press conference key highlights

Tiff Macklem

If energy prices stay higher for longer, there could well be a need to raise the policy rate.

There is no set timeline for possibly raising rates.

There is no risk-free path for the policy interest rate.

If we had raised the rate now and oil prices had then gone down, by the time the rate was impacting the economy we would wish we had not raised the rate.

We have some slack in the economy, so we do not think higher energy prices will be rapidly passed through to goods and services.

I would not characterise today’s comments as forward guidance.

It is useful to convey how we would handle various potential outcomes.

There is a risk that inflation expectations are not as well anchored as they were before Covid.

It does not look as though Canadians’ confidence in our credibility and resolve has been eroded.

Carolyn Rogers

Over the longer term, trade tensions are a bigger threat to the economy than higher oil prices.

The lesson from the Covid episode is that Canadians really do not like inflation.

There is not a single inflation number where we would completely change our view.

This section below was published at 13:45 GMT to cover the Bank of Canada's policy announcements and the initial market reaction.

As widely anticipated, the Bank of Canada (BoC) left its policy rate unchanged at 2.25% on Wednesday. The focus now turns to Governor Tiff Macklem’s press conference at 14:30 GMT, where markets will be looking for further insight into today’s decision and clearer guidance on the policy outlook.

BoC policy statement key highlights

Growth is seen at 1.2% in 2026, up from 1.1% in January. Growth is projected at 1.6% in 2027 and 1.7% in 2028.

Inflation is expected to average 2.3% in 2026, above the previous 2.0% projection. Inflation is seen at 2.1% in 2027 and 2.0% in 2028.

The output gap in the first quarter is estimated between -1.5% and -0.5%, unchanged from January.

Forecasts assume US tariffs remain unchanged and oil prices gradually decline to $75 per barrel by mid-2027.

Annualised GDP growth is seen at 1.5% in the first quarter, down from 1.8% previously, with the second quarter also projected at 1.5%.

The nominal neutral interest rate is estimated in the range of 2.25% to 3.25%, unchanged from January.

Potential output growth is now seen at 1.2% in 2026 and 1.3% in 2027, both revised higher.

Most measures of annual wage growth are between 3% and 3.5%.

Bottom line

The Bank of Canada is signalling patience. Inflation is proving a touch more persistent, while growth remains soft but stable.

This keeps the central bank firmly in wait-and-see mode, leaning against early rate cuts without turning outright hawkish.

Market reaction

The Canadian Dollar (CAD) trades on the back foot, lifting USD/CAD to the area of three-day highs just over 1.3700 the figure on Wednesday in the wake of the bank’s interest rate decision.

This section below was published as a preview of the Bank of Canada's (BoC) monetary policy announcements at 13:45 GMT.

• The Bank of Canada is widely expected to leave the interest rate unchanged at 2.25%.
• Policymakers will require more time to assess the impact of the Middle East war.
• Investors will be attentive to the bank’s inflation expectations for Canada.

The Bank of Canada (BoC) is widely expected to keep its monetary policy rate unchanged at 2.25% for its fourth consecutive meeting on Wednesday, requesting more time to assess the impact on inflation and economic growth from the US-Iran war. A shift in long-term inflation expectations emerging from higher energy prices due to the Middle East conflict could trigger the next big reaction in the Canadian Dollar (CAD).

The BoC left its monetary policy unchanged at its previous meeting in March and removed forward guidance references that the current rate is appropriate. The bank’s statement noted that economic growth had weakened in the first quarter of the year and that the energy shock from the Middle East war would keep prices at high levels in the near-term

Canada’s Consumer Prices Index (CPI) figures from March confirmed those views. Inflation accelerated to a 2.4% year-on-year rate from 1.8% in February, exceeding the BoC’s 2% target, yet falling short of the 2.5% expected by the market, which provides the central banks with some leeway to wait for additional data.

The BoC Governor, Tiff Macklem, practically discarded any immediate monetary policy reaction earlier in April. Macklem said that he is not concerned about the short-term spike in prices. The central bank’s latest CPI projections foresee inflationary pressures easing to 2.2% by the end of the year and 2.1% in 2027.

Furthermore, Canadian economic growth is starting to stutter with the trade relationship with its main partner, the United States (US), under review. The Gross Domestic Product (GDP) contracted at a 0.6% annualized pace in the fourth quarter of 2025. The monthly GDP barely rose 0.1% in January, according to the latest data released, and the IVEY Purchasing Manager’s Index (PMI) seasonally adjusted unexpectedly fell into contraction levels in March, suggesting that growth has remained sluggish in the first months of 2026. Unless this scenario changes radically, monetary tightening is likely to be off topic.

Looking forward, market analysts at TD Securities expect the BoC interest rate to remain steady for the foreseeable future: "We still expect the BoC to stay on hold for the rest of 2026, especially given the downside surprise on recent CPI. The recent moves higher in rates, particularly in BoC pricing further out, should be seen more as a function of importing the pricing out of Fed rate cuts rather than an accurate reflection of a change of outlook. December is currently priced in at 2.61%, and a return to pre-war levels will likely be slower rather than traded off a single dovish data point or communication."

When will the BoC release its monetary policy decision, and how could it affect USD/CAD?

The Bank of Canada will announce its policy decision on Wednesday at 13:45 GMT, and a press conference by Governor Tiff Macklem will ensue from 14:30 GMT onwards.

A report released by Reuters earlier this week revealed that the market is practically fully pricing steady interest rates after the April meeting, with 76% of the polled analysts expecting no change in the monetary policy in 2026. 

The USD/CAD has been trading within a bearish channel since peaking near 1.4000 in late March. The pair has bounced up from nearly seven-week lows, at 1.3605, but upside attempts remain seen as good entry opportunities for sellers, rather than real recovery attempts.

On the upside, Guillermo Alcalá, FX Analyst at FXStreet.com, expects bulls to be challenged at the resistance area above 1.3700. “The pair found some support near 1.3600 to trim losses as the US Dollar (USD) picks up ahead of the Federal Reserve’s (Fed) meeting, which is also due on Wednesday. The pair, however, is likely to meet resistance at last week’s highs, right above the 1.3700 level. A confirmation above that level would signal a deeper recovery towards a previous support-turned-resistance in the area of 1.3800.

A rejection at those levels would confirm the bearish trend, according to Alcala: “The pair has reached the 78.6% Fibonacci retracement of the March bull run, a common target for corrections, but has not given clear signs of a trend shift as of yet. In this sense, Monday´s low, at 1.3597, remains on the bears' radar. Further down, the pair would need a dovish Fed or an even more unlikely hawkish surprise by the BoC, to extend losses towards the confluence of the channel bottom with March 9 lows, at the 1.3525 area.”

• Gold holds near one-month lows ahead of the Federal Reserve monetary policy announcement.
• Higher-for-longer rate expectations and elevated yields weigh on the non-yielding metal.
• XAU/USD trades below key SMAs on the 4-hour chart, with momentum indicators pointing to sustained downside pressure.

Gold (XAU/USD) trades on the back foot on Wednesday, hovering near one-month lows ahead of the Federal Reserve’s (Fed) monetary policy announcement due later in the American session at 18:00 GMT. At the time of writing, XAU/USD is trading around $4,546 after briefly dipping to $4,510, down nearly 3.5% so far this week.

Higher-for-longer interest rate expectations continue to dominate price action amid mounting inflation risks from rising Oil prices linked to ongoing tensions in the Middle East, as elevated US Treasury yields weigh on demand for the non-yielding metal.

The Fed is widely expected to leave borrowing costs unchanged in the 3.50%-3.75% range for a third straight meeting. With the outcome largely priced in, attention is firmly on guidance from Fed Chair Jerome Powell and how policymakers assess the impact of renewed inflation pressure.

Although rate cut bets for this year have been largely priced out, according to the CME FedWatch Tool, markets remain focused on whether the Fed’s dot plot projection of one cut will materialize, as policymakers navigate the trade-off between stubborn inflation and downside risks to growth and employment.

The next directional move in Gold will likely hinge on Powell’s tone and the market’s interpretation of the policy outlook. A hawkish stance, highlighting upside risks to inflation, could push yields higher and extend the metal’s downside. Conversely, any indication that policymakers remain open to rate cuts later this year may offer some relief to Gold.

However, any meaningful recovery is likely to remain limited as the US-Iran war shows no signs of a near-term resolution, with talks stalled and supply through the Strait of Hormuz severely disrupted under a dual blockade, keeping Oil prices elevated.

On the geopolitical front, a Reuters report cited a White House official saying that US President Donald Trump and oil companies discussed steps to maintain the Iran blockade for an extended period if needed.

Trump also warned that “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon,” he wrote on Truth Social. The remarks come after US officials expressed skepticism over Iran’s proposal to end the war and reopen the Strait of Hormuz while delaying nuclear talks. The ongoing uncertainty is supporting safe-haven flows into the US Dollar (USD), putting additional pressure on XAU/USD.

Technical analysis: XAU/USD struggles below SMA cluster as sellers retain control

In the 4-hour chart, XAU/USD is extending a bearish phase as price holds well below the 200-period, 50-period and 100-period Simple Moving Averages (SMAs) clustered between roughly $4,698 and $4,742.

This configuration suggests a market trading under a dense band of overhead supply, while the Relative Strength Index (14), hovering near 31, hints at emerging oversold conditions and the negative Moving Average Convergence Divergence (MACD) reading reinforces persistent downside momentum.

On the upside, initial resistance is aligned with the 200-period SMA at about $4,698, followed by the 50-period SMA near $4,710 and the 100-period SMA around $4,742, which together define a layered cap that bulls would need to reclaim to ease the current bearish pressure.

On the downside, immediate support is located in the $4,550-$4,500 zone. A sustained break below this region could expose the metal to deeper losses.

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

• AUD/USD weakens as softer Australian CPI and a firm US Dollar pressure the Aussie.
• US-Iran tensions remain elevated as peace talks stall and supply disruptions in the Strait of Hormuz persist.
• Markets await the Federal Reserve’s monetary policy announcement.

The Australian Dollar (AUD) edges lower against the US Dollar (USD) on Wednesday, weighed by softer-than-expected Australian inflation data, while fading hopes that the US-Iran war will end anytime soon support the Greenback.

At the time of writing, AUD/USD is trading around 0.7139, down nearly 0.60% on the day. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 98.78, up about 0.15%.

Market sentiment weakens after Reuters reported that US President Donald Trump and oil companies discussed plans to maintain the Iran blockade for months if needed, citing a White House official. Trump also warned that “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon,” he wrote on Truth Social. The comments follow US skepticism over Iran’s proposal to end the war and reopen the Strait of Hormuz while delaying nuclear talks.

Looking ahead, attention turns to the Federal Reserve’s (Fed) monetary policy decision due at 18:00 GMT. Markets widely expect the central bank to keep interest rates unchanged in the 3.50%-3.75% range as policymakers assess the impact of rising energy prices on inflation, driven by ongoing supply disruptions in the Strait of Hormuz.

Inflation continues to run above the Fed’s 2% target, with rising Oil prices increasing upside risks. This has dampened expectations for near-term rate cuts, reinforcing a higher-for-longer policy outlook. Markets will therefore focus on guidance from Fed Chair Jerome Powell.

A hawkish tone could further support the US Dollar, while any signal that the Fed remains open to rate cuts later this year may limit the Greenback’s upside. However, downside in the US Dollar is likely to remain limited amid persistent geopolitical uncertainty.

Although the Reserve Bank of Australia’s (RBA) hawkish outlook continues to provide underlying support for the Aussie, the latest inflation data showed Consumer Price Index (CPI) rising to 4.6% in March from 3.7% in February, but still below expectations of 4.7%.