Forex News

• USD/JPY holds firm after intervention drags the pair below 156.00.
• Iran’s proposal to Washington helped improve broader market sentiment.
• Traders now await US factory data, Fed speeches, and NFP data.

USD/JPY turns flat in the day after diving to a daily low of 155.48 during Friday’s session, in the aftermath of two straight days of Japanese authorities intervening in the FX markets to strengthen the Yen, which had weakened past the 160.00 figure. The pair trades at 156.67, flattish.

USD/JPY holds flat as Tokyo action fades and US jobs data looms next

On Thursday, Japanese authorities intervened in the FX markets. Data from the Bank of Japan on Friday revealed that it spent as much as $35 billion USD, slightly below the $36.8 billion used in the July 2024 intervention.

Meanwhile, traders cheered news that Iran submitted a proposal to Washington via Pakistan. The US extended the blockade affecting Iran’s economy, while the Iranian Parliament Speaker Mohammad Bagher Ghalibaf publicly criticized Washington’s policies on X, remarking, “Good luck blockading a country with those borders.”

The US ISM Manufacturing PMI in April steadied, coming at 52.7, unchanged from March, yet it showed that manufacturing activity remains solid. Meanwhile, three of the four dissenters at the Federal Open Market Committee (FOMC) meeting on Wednesday explained their reasons for dissenting.

Beth Hammack of the Cleveland Fed noted that inflationary pressures are expanding due to rising oil prices. She stated that including an easing bias is now inappropriate given current projections.

Neel Kashkari of the Minneapolis Fed warned that a lengthy closure of the Strait of Hormuz or damage to energy facilities could cause a price shock, prompting the US central bank to tighten policy to manage inflation expectations. In the meantime, the Dallas Fed’s Lorie Logan stated that the Fed’s next move could be a cut or a hike.

Next week the Japanese economic docket is absent. Conversely, the US economic docket is packed, with traders eyeing Factory Orders, Fed speeches, the ISM Services PMI, and plenty of jobs data, led by the report on April’s Nonfarm Payrolls.

USD/JPY Price Forecast: Technical outlook

In the daily chart, USD/JPY trades at 156.72, keeping a bearish near-term tone as it holds under the latest simple moving average cluster near 158.59 and below the descending trend-line drawn from 159.23. The pair still leans on underlying trend support, with price trading above the longer-term rising line that was last broken near 155.21, while the Relative Strength Index (14) at 37 suggests weakening momentum but not yet oversold conditions.

On the topside, initial resistance is located around the simple moving average cluster near 158.59, ahead of the descending trend-line barrier from 159.23 and the psychological horizontal cap at 160.00. On the downside, immediate support is seen at the reclaimed longer-term rising trend area near 155.21, with a deeper pullback exposing the shorter-term uptrend base around 153.39 if selling pressure extends.

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

• EUR/USD rises toward one-week highs as the US Dollar weakens on geopolitical developments.
• Iran submits fresh proposal via mediators, raising cautious hopes for renewed talks.
• Suspected Japanese intervention adds pressure on the Greenback.

EUR/USD edges higher on Friday as fresh geopolitical developments surrounding the US-Iran war weigh on the US Dollar (USD) and support the Euro (EUR). At the time of writing, the pair is trading around 1.1768, hovering near its highest level in over a week.

Reports suggest Iran has submitted a new proposal through Pakistani mediators in response to the latest US amendments, after Washington rejected an earlier Iranian offer that proposed leaving nuclear negotiations for a later stage. However, no details of the new proposal have been disclosed so far. Meanwhile, Iran’s state-run IRNA reported that Foreign Minister Abbas Araghchi has been briefing regional counterparts on Tehran’s stance on ending the war.

This has lifted hopes that peace talks may resume despite the current deadlock. In reaction, Oil prices have eased slightly from recent highs, while the US Dollar has slipped to two-week lows. However, the Greenback’s decline appears to be largely driven by suspected intervention by Japanese authorities in the FX market to curb excessive weakness in the Japanese Yen (JPY).

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 97.88, down about 0.22% on the day at the time of writing.

On the data front, US manufacturing activity delivered a mixed picture. The ISM Manufacturing PMI held steady at 52.7 in April, matching its highest level since August 2022 but missing expectations of 53.0. In contrast, the S&P Global US Manufacturing PMI was revised higher to 54.5 from a preliminary reading of 54.0 and up from March’s 52.3, pointing to the strongest expansion in the sector since May 2022.

Traders also parsed comments from central bank officials after both the Federal Reserve (Fed) and the European Central Bank (ECB) kept interest rates unchanged in their monetary policy announcements earlier this week.

Dallas Fed President Lorie Logan, who dissented against the easing bias at the latest FOMC meeting, said the next policy move could be either a rate cut or a hike. Logan also noted that the Fed should avoid giving guidance that implies easing at this stage. Minneapolis Fed President Neel Kashkari warned that “a large enough price shock could put inflation expectations at risk,” potentially requiring a series of rate increases to maintain the Fed’s credibility in defending its 2% inflation target.

On the European side, ECB officials struck a cautious tone. Governing Council member Madis Müller said it is “increasingly likely” the ECB needs to raise rates. Meanwhile, Ireland’s Central Bank Governor Gabriel Makhlouf noted that “Euro area GDP suggests near-term headwinds to growth” and warned that “upside risks to inflation have intensified.”

• NZD/USD edges higher at the end of the week near recent highs.
• Tensions between the US and Iran continue to fuel demand for safe-haven assets.
• Mixed US economic data caps the upside potential of the US Dollar.

NZD/USD trades around 0.5915 on Friday at the time of writing, up 0.10% on the day, near recent highs around the 0.5930 area. The pair’s rebound comes as the US Dollar (USD) eases slightly, with the US Dollar Index (DXY) hovering near 97.90, down 0.23%, despite an ongoing tense geopolitical backdrop.

Tensions in the Middle East remain a key driver for markets. Statements from an Iranian official warning of retaliation in case of renewed US attacks have reinforced investor caution. However, reports suggesting that Iran has submitted a new proposal to the United States (US) through mediators have temporarily eased fears, weighing on the Greenback and supporting risk-sensitive currencies such as the New Zealand Dollar (NZD).

On the macroeconomic front, US data present a mixed picture. The Gross Domestic Product released by the Bureau of Economic Analysis (BEA) on Thursday showed the US economy expanding at an annualized rate of 2% in the first quarter, below expectations of 2.3%, which limits the US Dollar’s momentum. Meanwhile, the Manufacturing Purchasing Managers Index (PMI) published by the Institute for Supply Management (ISM) held steady at 52.7 in April, signaling moderate expansion in activity, albeit slightly below forecasts.

The Federal Reserve (Fed) kept interest rates unchanged within the 3.5%-3.75% range earlier this week, while noting that inflation remains elevated, partly due to rising energy prices. Diverging views within the committee and the possibility of further rate hikes in the event of an inflationary shock provide intermittent support to the US Dollar.

• Yen intervention speculation battered the Dollar for a second straight session.
• Iran’s proposal via Pakistan helped keep broader risk appetite supported.
• Fed hawks warned energy shocks could keep inflation pressures elevated.

GBP/USD clears the 1.3600 barrier, up over 0.50%, as the Greenback gets battered for the second straight day amid speculation that Japanese authorities continued an intervention in the FX space to prop up the Yen. At the time of writing, the pair trades at 1.3650, up 0.38% near a ten-week high.

Sterling climbs as Iran proposal and Fed hawks keep traders alert

Risk appetite remains positive as breaking news revealed that Iran presented a proposal to Washington via Pakistan. In the meantime, the US blockade continues to hit Iran’s economy as Iran’s Parliament Speaker Mohammad Bagher Ghalibaf moans about Washington decisions, posting on X, “Good luck blockading a country with those borders.”

Data from the US showed that manufacturing activity steadied, according to the ISM Manufacturing PMI report for April, which was unchanged at 52.7. Three of the four Federal Reserve dissenters expressed their views regarding the decision on Wednesday.

Beth Hammack of the Cleveland Fed said that inflationary pressures are broadening, due to “rising oil prices,” adding another source of pressure. She added that adding an easing bias in the statement is “no longer appropriate given the outlook,” she wrote in a statement.

Her colleague, Neel Kashkari of the Minneapolis Fed, said that a prolonged closure of the Strait of Hormuz and damage to energy facilities could spark a price shock, exerting pressure on the US central bank to tighten policy to keep inflation expectations in check.

Dallas Fed Lorie Logan stated that the Fed’s next move could be a cut or a hike.

Across the pond, Sterling remains boosted by sentiment. Also, business activity in the UK improved from 51.0 to 53.7 in April, while a measure of input prices rose to its highest level since mid-2022.

BoE expected to tighten further

The BoE’s Chief Economist Huw Pill commented that tightening in financial conditions “seems a reasonable response to inflation risk from the Iran war.” He added that the BoE’s MPC “is ready to act if necessary.”

Given the fundamental backdrop, the GBP/USD is poised to extend its gains as markets continue to price in 60 basis points of rate hikes towards the end of the year. Meanwhile, the Fed is projected to hold rates unchanged throughout the full year, according to Prime Terminal data.

GBP/USD Price Forecast: Technical outlook 

In the daily chart, GBP/USD trades at 1.3623, extending its rebound above the tightly packed 50-, 100- and 200-day simple moving average (SMA) cluster around 1.3413, which now underpins a constructive bias. The pair has also pushed clear of the former descending resistance trend line, last capping prices near 1.3436, while an established rising support line drawn from 1.3035 and most recently guiding higher lows around the 1.3490 area reinforces the notion of buyers being in control in the near term.

On the downside, initial support is seen at the rising trend line near 1.3490, ahead of the prior descending trend barrier turned floor around 1.3436. A deeper pullback would expose the major SMA cluster at 1.3413, where failure would be needed to undermine the bullish tone and reopen the broader range to the downside.

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

• TWLO rises as much as 21% on Friday after Q1 earnings, outlook for Q2 impress.
• Twilio beats adjusted EPS consensus in Q1 by 18%.
• Q1 revenue rises 20% YoY, management expects incremental growth in Q2.
• Wells Fargo raises TWLO price target by 36% to $200.

Twilio (TWLO) stock rose as much as 21% on Friday morning as the market digested the cloud communications platform's first-quarter results, released afterhours on Thursday.

Shares of TWLO hit a four-year high at $179.48 at market open on Friday as Wall Street analysts praised the company's surprise 20% annual revenue growth in Q1.

The wider US stock market is also being helped by impressive earnings from Apple (AAPL), as well as news that Iran has sent an updated peace deal to intermediaries in Pakistan. The latter has helped US Oil (WTI) drop 4%, which is bullish for equities.

Twilio Q1 earnings impress

For the quarter ended March 31, Twilio issued adjusted earnings per share (EPS) of $1.50 against the consensus estimate of $1.27. Revenue for the first quarter increased to $1.41 billion, about $70 million above consensus.

Management expects Q2 revenue of $1.425 billion, besting consensus by $35 million. Twilio projects adjusted EPS for Q2 to be in line with the prior $1.29 consensus estimate.

“Twilio had a terrific Q1, accelerating revenue and gross profit to their highest growth rates in more than three years,” said CEO & Director Khozema Shipchandler in a statement.

The company also hiked its full-year free cash flow estimate from a midpoint of $1.05 billion to $1.09 billion.

Wells Fargo raised its price target from $147 to $200 on the news.

"The Voice AI story appears to be taking shape, which likely gives investors confidence to stick around in the name longer. The setup for the rest of the year also now appears better, even as the comps get more challenging," wrote Wells Fargo analyst Ryan MacWilliams in a client note.

RBC Capital maintained its Underperform rating on TWLO but increased its price target on the stock to $120 from $100.

TWLO stock reaches four-year high

Twilio stock is now trading at its highest point since February 2022, and bulls will attempt for further upside in the coming weeks toward more bullish analysts' $200 price target.

On the downside, the monthly chart offers long-term support at $150, measured from the summer of 2019 ceiling to highs in January and February of 2025.

The Relative Strength Index (RSI) on the monthly chart shows momentum rising toward 65. This figure is not yet in overbought territory above 70 and should give bulls a picture of further upside on offer. Bulls will note that during the pandemic rally, TWLO routinely saw RSI values above 80.

• Gold rebounds on Friday as traders react to fresh geopolitical headlines.
• Strong central bank buying and retail investment continue to support the broader trend.
• XAU/USD trades below the 100-day SMA and key Fibonacci retracement levels on the daily chart.

Gold (XAU/USD) pares intraday losses on Friday as traders react to fresh geopolitical headlines surrounding the ongoing war in the Middle East. At the time of writing, XAU/USD is trading around $4,655, rebounding from the one-month low of $4,510 reached earlier this week.

Reports suggest Iran has submitted a new proposal through Pakistani mediators in response to the latest US amendments. Iran’s state-run IRNA reported that Foreign Minister Abbas Araghchi has been briefing regional counterparts on Tehran’s stance to end the war.

This has raised hopes that diplomatic efforts remain alive despite stalled talks. However, Gold’s upside remains limited as lingering macro headwinds persist. Surging energy costs have already pushed inflation higher across major economies since the US-Iran war began, prompting central banks to reassess the monetary policy path.

Major central banks, including the Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BoE), Bank of Japan (BoJ) and Bank of Canada (BoC), kept interest rates unchanged in their latest policy announcements, while emphasizing a data-dependent approach. The overall tone leaned somewhat hawkish as policymakers look through the inflationary shock.

Against this backdrop, markets increasingly expect the Fed to delay interest rate cuts, or even consider raising rates if inflation pressure intensifies. According to the CME FedWatch Tool, traders are now pricing in a hold through this year, while the probability of a rate hike by April 2027 has risen to 24.2%, up from just 1.9% a week ago.

For Gold, the shift toward higher-for-longer interest rate expectations has led to steady downside pressure since the start of the war, with the metal posting two straight monthly losses despite its role as an inflation hedge and safe-haven asset. Non-yielding assets such as Gold tend to perform well in a low-interest-rate environment, as lower borrowing costs reduce the opportunity cost of holding them.

In the near term, the metal is expected to trade with a downside bias, with any upside likely to be sold into, as supply through the Strait of Hormuz remains largely disrupted, keeping Oil prices elevated and inflation concerns in focus.

Overall, the broader uptrend remains intact, supported by strong structural demand, including steady central bank buying and resilient investment flows. According to the World Gold Council’s Q1 2026 Gold Demand Trends report, total gold demand, including OTC investment, rose 2% YoY to 1,231 tonnes, while central banks purchased around 244 tonnes, up 3%. Gold-backed ETFs saw inflows of 62 tonnes in Q1, while bar and coin demand surged 42% YoY to 474 tonnes.

Technical Analysis: XAU/USD remains capped under the 100-day SMA

In the daily chart, XAU/USD keeps a bearish near-term bias as spot holds below the 100-day Simple Moving Average (SMA) at $4,762 and the 61.8% Fibonacci retracement at $4,603. The metal remains under corrective pressure after failing to sustain recent highs, while the Relative Strength Index (RSI) around 41 stays in bearish territory without yet reaching oversold conditions, suggesting downside risks persist but with scope for intermittent rebounds.

On the topside, initial resistance is now aligned at the 61.8% retracement near $4,603, followed by a heavier barrier formed by the 50% retracement at $4,759 and the 100-day SMA at $4,761, with further hurdles at the 38.2% retracement at $4,914 and the 23.6% level at $5,108. On the downside, immediate support emerges at the 78.6% retracement around $4,381, ahead of the 200-day SMA at $4,281 and the prior swing base near the 100% retracement at $4,099, where stronger buyers would be expected to defend the broader uptrend.

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

Lorie Logan, President of the Federal Reserve (Fed) Bank of Dallas, spoke at the Bank of Dallas, claiming that the Fed should not have give guidance that implies easing right now. She also added that the next rate move could be a cut or a hike.

Key takeaways:

Fed should not give guidance implying easing right now.

Fed's next rate move could be cut or hike.

Economic outlook is very uncertain right now.

Job market has been stable.

Increasingly concerned about getting inflation back to 2%.

Outlook for inflation path is uncertain.

Dissented against Fed’s easing bias at FOMC meeting.

Has been stable."

• The US ISM Manufacturing PMI appears stuck in April.
• The US Dollar remains on the back foot on Thursday.

The Institute for Supply Management’s (ISM) data showed the Manufacturing PMI held steady at 52.7 in April, slightly below analysts’ expectations of 53.0.

Meanwhile, the Prices Paid Index, which tracks inflation, rose to 84.6 from 78.3, the Employment Index weakened to 46.4 from 48.7, and the New Orders Index increased to 54.1, from 53.5.

Market reaction

The Greenback extends its downbeat performance on Wednesday, motivating the US Dollar Index (DXY) to breach below the 98.00 mark and hit new two-week lows.