Forex News

ING’s Frantisek Taborsky reports a strong post-election rally in Hungarian rates, especially at the long end, with FX appreciation slower than expected, suggesting heavy pre-election positioning. Despite scope for some profit-taking, ING stays constructive on Hungary, expecting EUR/HUF to stabilise in the 355–360 range and further curve flattening, with long-end rates seen as main beneficiaries.

Hungarian assets seen benefiting after vote

"In Hungary, we will continue to monitor the post-election market behaviour."

"Yesterday we saw a massive rally, especially at the long end of the curve with rates outperforming bonds and a slower appreciation in FX than we expected."

"This indicates how heavy positioning was built in the market before the election, especially in the FX and bonds markets."

"However, we remain bullish on Hungary in general, even though we may see some further profit-taking today."

"We therefore continue to see EUR/HUF stabilising in the 355-360 range and further flattening of the curve, where we believe the long end should benefit the most after the election."

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

• The Pound Sterling trades higher to near 1.3535 against the US Dollar amid risk-on mood.
• The US and Iran could schedule second round of talks.
• Investors await the US PPI data, and BoE Bailey’s remarks later in the day.

The Pound Sterling (GBP) outperforms the US Dollar (USD), while trading mixed against other currency peers, during the European trading session on Tuesday. The GBP/USD pair posts a fresh six-week high around 1.3535 as the US Dollar (USD) faces selling pressure as hopes of second round of negotiations between the United States (US) and Iran have prompted hopes of a permanent ceasefire.

Negotiating teams from the US and Iran could return to Islamabad this week, according to a Reuters report. Over the weekend, US-Iran first round of talks ended without a breakthrough as Vice President (VP) JD Vance-led team remained non-negotiable on Iran giving up its nuclear ambitions and the reopening of the Strait of Hormuz.

Hopes of US-Iran second round of talks have improved market sentiment. S&P 500 futures extend Monday’s gains to 6,900 in the overnight session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades lower around 98.00, the lowest level seen in over six weeks.

On the domestic front, investors seek fresh cues on the Bank of England’s (BoE) monetary policy outlook, which are expected to be found from Governor Andrew Bailey’s remarks in a panel discussion at Columbia University at 16:05 GMT.

This week, market participants will focus on the monthly Gross Domestic Product (GDP) data for February, which will be released on Thursday.

In the US, Investors await the Producer Price Index (PPI) data for March, which will be published at 12:30 GMT.

• The conflict in the Middle East could trigger higher inflation due to damage to energy production infrastructure.
• The medium-term impact remains uncertain despite near-term pressures.
• Olli Rehn stresses the need to continue the green transition despite geopolitical tensions.

European Central Bank (ECB) Governing Council member Olli Rehn said that the damage inflicted on energy production infrastructure in the Middle East could have lasting consequences, even after the most intense phase of the conflict ends. According to him, efforts to repair and rebuild these facilities could continue long after the acute phase of the war.

In this context, Rehn said that an increase in headline inflation this year appears unavoidable. However, he stressed that the medium-term impact remains uncertain, making it difficult to assess the future path of inflation in the Eurozone.

Regarding monetary policy, Rehn reiterated that interest rate decisions are never predetermined. The ECB continues to emphasize a data-dependent approach when determining its policy stance.

The policymaker also highlighted that the current conflict underlines the strategic importance of the green transition for Europe. In his view, slowing down this transition would be “a serious mistake”, arguing that greater energy independence would strengthen the continent’s economic resilience and competitiveness in the long term.

Market reaction

Rehn’s comments had little immediate impact on the foreign exchange market. EUR/USD continues to extend its bullish momentum, marking a seventh consecutive daily gain and rising by 0.17% on Tuesday to trade around 1.1780 at the time of writing.

• Gold attracts follow-through buyers on Tuesday as hopes for Iran diplomacy undermine the USD.
• Doubts over future rate moves by the Fed also weigh on the USD and benefit the XAU/USD pair.
• Inflation risks due to the instability in the Strait of Hormuz could limit USD losses and cap the bullion.

Gold (XAU/USD) touches a fresh daily high during the first half of the European session on Tuesday, though it lacks follow-through and remains below the $4,800 mark. Despite failed US-Iran peace talks over the weekend, investors seem hopeful that the door for diplomacy remains open and that negotiations will continue. Apart from this, the uncertainty over future interest rate moves by the US Federal Reserve (Fed) weighs on the US Dollar (USD). This helps the bullion to build on the previous day's goodish rebound from sub-$4,650 levels.

US Vice President JD Vance struck a cautiously optimistic tone on negotiations with Iran and said during an interview on Fox News that meaningful progress has been made, even as talks have yet to deliver a breakthrough. Vance further added that the framework for a comprehensive agreement is achievable if Iran is willing to take the next step. The optimism, in turn, remains supportive of a generally positive risk tone and undermines the Greenback's global reserve currency status, benefiting USD-denominated commodities, including Gold.

Meanwhile, an energy shock caused by widening conflict in the Middle East has been fueling worries around a possible spike in inflationary pressures. Moreover, data released on Friday showed that the US consumer inflation rose by the most in nearly four years in March due to the war-driven surge in energy prices, shifting focus on potential rate hikes this year. However, the CME Group's FedWatch Tool is indicating a 30% chance of a 25-basis point (bps) rate cut in December, which further undermines the USD and benefits the non-yielding Gold.

The aforementioned supportive factors lift the XAU/USD pair to the $4,777 area in the last hour, though the uptick lacks bullish conviction amid the continued instability in the Strait of Hormuz. US President Donald Trump said that the U.S. Navy blockade on the strategic waterway has officially started and vowed to destroy Iranian warships that get nearby. Iran responded with threats on all ports in the Persian Gulf and the Gulf of Oman. This keeps geopolitical risks in play, which holds back the USD bears from placing aggressive bets and caps the Gold price.

XAU/USD 4-hour chart

Gold could aim to test 200-SMA on H4 once $4,800 pivotal hurdle is cleared

Against the backdrop of the previous day's goodish rebound, a subsequent strength beyond the 50% retracement level of the March downfall could be seen as a key trigger for the XAU/USD bulls. The precious metal, however, remains capped beneath the 200-period Simple Moving Average (SMA) at $4,854.58, which keeps the broader tone mildly bearish.

Meanwhile, the Relative Strength Index (RSI) near 57 leans to the bullish side of neutral, while the Moving Average Convergence Divergence (MACD) histogram has contracted toward the zero line. This, in turn, suggests that the downside pressure is waning but not yet convincingly reversed.

Hence, any subsequent move up might continue to confront initial resistance located at the 200-period SMA around $4,855, followed by the 61.8% Fibonacci retracement at $4,913. A break above the latter would open the way toward $5,133 and the $5,413 cycle high.

On the downside, immediate support is seen at the 50% retracement near $4,759, with additional cushions at the 38.2% level at $4,604 and then $4,413. A drop through these Fibonacci floors would expose the broader structural base toward $4,104.

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

DBS Group Research’s Eugene Leow assesses Gold with a cautiously constructive stance, highlighting a divergence between speculative futures traders and strategic ETF and physical buyers. He notes rising short positions and elevated real yields weighing on tactical sentiment, while longer-term investors accumulate on price weakness, creating scope for an asymmetric upside reversal if US inflation and Federal Reserve signals turn more dovish.

Speculators short while ETFs accumulate

"Speculative positioning on gold deteriorated in the week ending April 7, with managed money net-long positions falling to a two-year low."

"This simultaneous increase in gross positioning on both sides signals two-way risk, underscoring market uncertainty about gold's near-term trajectory.Hedge funds are building shorts as the traditional gold playbook has inverted, with inflation a headwind rather than a tailwind, keeping the Fed restrictive and real yields elevated."

"If sentiment shifts on softer inflation data, dovish signals from the Fed or geopolitical ceasefire, the combination of aggressive short-covering and continued ETF accumulation could trigger a strong rally."

"Conversely, if real yields rise towards 2% again, ETF inflows may stall while shorts add to positions."

"The contrast between deteriorating futures positioning and steadily rising ETF holdings reveals a bifurcated market structure at present."

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

• EUR/JPY cross may test the immediate barrier at the fresh record high of 187.54.
• The Relative Strength Index (14) at 70.10 indicates overbought conditions.
• The primary support lies at the nine-day EMA of 185.92.

EUR/JPY halts its three-day winning streak, inching lower after reaching all-time highs and trading around 187.40 during the European hours on Tuesday. The technical analysis of the daily chart indicates the currency cross is trending higher within an ascending channel, signaling a persistent bullish bias.

The EUR/JPY cross maintains a bullish near-term bias as it holds above both the nine-day and 50-day Exponential Moving Averages (EMAs). The alignment of the short-term above the long-term EMA suggests persistent upward pressure.

The Relative Strength Index (14) at 70.10 shows overbought conditions, hinting that upside momentum is strong but vulnerable to a corrective pause.

The EUR/JPY cross may target the immediate resistance at the all-time high of 187.54, recorded on April 14, followed by the upper boundary of the ascending channel around 187.80.

On the downside, the primary support lies at the nine-day EMA of 185.92. A move below this level could weaken the short-term price momentum, exposing the lower ascending channel boundary around 185.00, followed by the 50-day EMA at 184.07.

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

MUFG’s Senior Currency Analyst Lee Hardman highlights continued Japanese Yen underperformance, with USD/JPY trading just below 160.00 even as the US Dollar (USD) weakens elsewhere. Markets have scaled back expectations for an April Bank of Japan (BoJ) rate hike after Governor Ueda’s cautious remarks, increasing the likelihood of tightening being delayed to June or July and leaving the Yen vulnerable to further near‑term weakness.

BoJ repricing weighs on Japanese Yen

"The yen has continued to underperform at the start of this week resulting in USD/JPY rising back to within touching distance of the 160.00-level."

"One reason why the yen has continued to underperform at the start of this week has been the scaling back of BoJ rate hike expectations."

"The Japanese rate market is currently pricing in around 7bps of hikes for this month’s BoJ policy meeting compared to around 14bps of hikes at the end of last week."

"The main trigger for the dovish repricing was yesterday’s speech from BoJ Ueda who refrained from providing a clear signal that they are preparing to hike rates imminently. He also expressed more concern that “developments in the Middle East remain uncertain and we will closely monitor them and their potential impact on economic activity, prices and financial conditions”. He added that there were two-sided risks for inflation."

"While the comments do not explicitly rule out another hike as early as this month, we acknowledge that there a higher probability now that the BoJ will wait a little longer to assess the economic fallout from the Middle East conflict before tightening policy further."

"One downside of delaying the timing of the next hike is that it leaves the yen vulnerable to further weakness in the near-term which could reinforce upside risks to inflation from higher energy prices."

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

• Silver rallies to two-week highs near $78.00 after bouncing from $72.60 lows on Monday.
• Precious metals appreciate on risk appetite amid hopes of new US-Iran peace talks.
• XAG/USD keeps trading within an ascending channel with bulls aiming for the $80.00 area.

Silver (XAG/USD) is rushing higher on Tuesday, reaching fresh two-week highs right below $78.00 at the time of writing, after bouncing from lows around $72.60 on Monday. Speculation about another round of negotiations between the US and Iran has boosted risk appetite, sending the US Dollar lower across the board and providing a fresh boost to precious metals.

The US military blockade of Iran’s ports created some friction with Tehran, but fears about further escalation have been offset by news suggesting that the US and Iran could be close to a second round of negotiations, following the failure of last weekend’s meeting in Pakistan.

US President Trump affirmed on Monday that Iranian authorities had called, asking to “work for a deal,” and Reuters reported on Tuesday that US and Iranian teams could return to Islamabad for peace talks this week.

Precious metals dropped following the breakdown of the peace talks. US negotiators affirmed that Iran’s refusal to continue enriching uranium, allegedly aimed at obtaining a nuclear weapon, has been a red line. The two-week ceasefire, however, remains in place, feeding hopes of a peace deal.

Technical Analysis

XAG/USD holds a constructive bullish bias within an upward parallel channel. The Relative Strength Index (RSI) is hovering around 64, suggesting firm but not yet overbought upside momentum. A positive Moving Average Convergence Divergence (MACD) reading at 0.16 reinforces the notion of renewed buying pressure.

Bulls are attempting to confirm the breach of last week's high, at $77.65, focusing on the $80.00 psychological level and the April 1 peak, at 81.13.

On the downside, immediate support lies at the bottom of the ascending channel, now at $74.75, ahead of Monday's low, at $72.61. Furghter down the area between $66.70 and $68.30, which held bears several times in late March and early April, looks like a plausible target.

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