Forex News

BNY's Head of Markets Macro Strategy Bob Savage highlights comments from Bank of Japan (BoJ) Governor Kazuo Ueda stressing vigilance over higher Oil prices and global financial instability. While Japan’s economy and inflation remain broadly on track, Ueda warns that a prolonged Middle East conflict could disrupt supply chains and output, and says the BoJ will closely monitor conditions ahead of its late-April policy meeting.

BoJ flags risks from Oil shock

"BoJ Governor Kazuo Ueda has highlighted the need for vigilance amid rising crude oil prices and global financial market instability caused by the escalating Middle East conflict."

"While Japan’s economic and price developments remain roughly on forecast, Ueda warned that a prolonged war could disrupt supply chains and factory output, impacting the economy."

"He noted that higher oil costs may have mixed effects on underlying inflation, depending on output gaps and inflation expectations."

"Ueda emphasized close monitoring of the situation’s impact on the economy, prices and financial conditions ahead of the BoJ’s April 27-28 policy meeting."

"Japan’s preliminary money stock data for March 2026 show M2 and M3 increasing by 2.0% y/y and 3.7% y/y, respectively, up from 1.7% and 2.0% in February."

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

Societe Generale analysts note a quiet week for the UK, with the March RICS housing survey pointing to weaker demand as higher energy costs and mortgage rates weigh on confidence. They highlight upcoming Bank of England (BoE) speeches before the 30 April MPC meeting, where it expects rates to stay on hold, and projects a modest 0.1% monthly rise in February Gross Domestic Product (GDP) alongside close monitoring of the BRC March retail sales index.

BoE communication and soft UK data

"Last week in the UK was fairly quiet. On the data front, the March RICS housing survey showed a slowdown across most components, reflecting the hit to consumer confidence from the ongoing energy shock, the withdrawal of numerous mortgage deals, and rising mortgage rates."

"Against our expectations, the Bank of England’s Credit Conditions Survey ran from 23 February to 13 March and therefore captured the energy shock. However, the survey still indicated that banks expect demand for, and the availability of, secured household and corporate credit to increase in 2Q26. This seems unlikely given the material tightening in financial conditions and the decline in confidence associated with the ongoing energy shock."

"This week in the UK brings a flurry of speeches from BoE members, including Bailey, Greene, Taylor, and Mann. These are likely to be the final public remarks ahead of the blackout period for the 30 April MPC meeting, where we expect the Committee to remain on hold. Last week, Bailey pushed back against market pricing of rate hikes, although around 40bp of hikes are still priced in."

"Given the tentative ceasefire agreement, it will be interesting to see whether Taylor, who is one of the more dovish members, signals openness to a rate cut as early as the April meeting. "

"On the data front, we project a modest 0.1% mom increase in February GDP. More importantly, the BRC’s March retail sales index will provide an update on how well the consumer is holding up amid higher fuel costs and falling confidence."

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

Rabobank’s Senior FX Strategist Jane Foley notes that the US Dollar (USD) has benefited from renewed safe haven demand and reduced Federal Reserve (Fed) rate cut expectations, with EUR/USD currently testing below 1.17. She highlights that its 1‑month EUR/USD forecast at 1.14 was set before the recent US‑Iran ceasefire and may be reviewed depending on how the conflict evolves and its impact on risk appetite.

EUR/USD pressured by risk sentiment

"For now, we continue to expect the USD to act as a safe haven on bouts of reduced risk appetite with additional support likely being drawn from reduced rate cut hopes."

"In the near-term, however, we expect that short-term movements in the USD crosses are more likely to be dominated by the general mood of risk appetite and by the outlook for US interest rates."

"This factor coupled with this morning’s drop in risk appetite has pushed the USD towards the top of the G10 FX performance table on a 1-day view, with EUR/USD currently testing the water below the 1.17 level."

"That said, demand for safe haven assets has softened this month."

"Our 1 month forecast of EUR/USD 1.14 was established before the recent US-Iran ceasefire."

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

Brown Brothers Harriman’s (BBH) Elias Haddad highlights that the Reserve Bank of Australia’s (RBA) narrow 5–4 decision to hike in March leaves upcoming labor data crucial for timing the next move. Consensus looks for slower job gains and steady unemployment, with stronger figures likely to bring forward a further rate increase. BBH notes AUD/USD faces resistance near 0.7200 and support around 0.7000.

Labor report key for next hike

"At its last March 17 meeting, the RBA delivered a back-to-back 25bps cash rate target hike to 4.10% in a narrow 5-4 vote. The four dissenters wanted a hawkish hold, citing in part uncertainty surrounding the extent of tightness in the labor market."

"As such, Australia’s March labor force report will set the bar for the timing of the next RBA rate increase (Thursday)."

"The economy is projected to add +17.8k jobs vs. +48.9k in February and the unemployment rate is seen at 4.3% for a second straight month, in line with the RBA’s 2026 projection."

"Stronger jobs growth would lift bets of a follow-up 25bps rate hike at the next May 5 policy decision (currently 62% priced-in), while softer data would push it out to later."

"AUD/USD faces stiff resistance at 0.7200, while immediate support is offered at 0.7000."

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

ING’s Ewa Manthey and Warren Patterson report that Oil markets rallied sharply after US-Iran talks collapsed, with ICE Brent jumping over 9% and NYMEX WTI moving above $105/bbl. The US plans a maritime blockade around Iranian ports, stoking supply fears. Positioning data show diverging speculative interest in Brent and WTI ahead of OPEC’s monthly report.

Oil rallies on US blockade threat

"Oil markets rallied sharply on Monday after US-Iran talks collapsed over the weekend. ICE Brent jumped more than 9% in early trade, while NYMEX WTI pushed above $105/bbl. In response, the US military plans to implement a blockade of all maritime traffic entering and exiting Iranian ports from 10:00am Monday Washington time, while allowing vessels not calling at Iranian ports to continue transiting Hormuz."

"European gas prices also surged. Front‑month TTF futures climbed nearly 18% to intraday highs above EUR51/MWh. The breakdown in peace talks has revived concerns over the conflict, now in its sixth week, while renewed US threats to block Hormuz have intensified fears of near‑term supply tightness."

"Positioning data points to growing uncertainty. Speculators reduced their net long in ICE Brent by 5,583 lots to 424,270 lots as of last Tuesday, driven by a 4,525‑lot fall in gross longs. By contrast, speculators increased their net long in NYMEX WTI by 7,121 lots over the week, taking it to 137,838 lots."

"US drilling activity remains subdued. Baker Hughes data shows the US oil rig count unchanged at 411 as of 10 April, as price volatility and weaker margins continue to weigh on investment. Total rigs fell by three to 545, leaving the count 38 rigs below year‑ago levels."

"Looking ahead, attention turns to OPEC’s monthly market report due later on Monday, which should provide updated guidance on supply balances amid the escalating geopolitical risks."

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

Deutsche Bank economists report the Federal Reserve (Fed) left rates at 3.50%-3.75% in March and still expects a 25 bp cut in September. Markets price only modest easing. They warn a prolonged Strait of Hormuz blockade could push Brent toward USD 120. US inflation has risen to 3.3%, with 2026 growth forecast at 2.5% and inflation at 3.4%.

Energy risks complicate Fed policy path

"A prolonged blockade of the Strait of Hormuz could well drive the price of Brent crude oil toward USD 120 per barrel."

"As expected, the Fed left its target range for interest rates unchanged in March at 3.50%-3.75% ."

"While a weakening labor market would justify another rate cut, an inflation surge stemming from the energy price shock might necessitate a rate hike."

"Financial markets are pricing in around 6 basis points of easing by the end of the year, which translates to an implied probability of a rate cut at 24%."

"We are maintaining our forecast of a 25 basis point rate cut in September for now ."

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

• EUR/USD rebounds to near 1.1700, but is still holding opening losses.
• The failure of US-Iran peace talks has prompted the risk-off mood.
• US President Trump announces the blockade of Iranian ports.

The EUR/USD pair recovers a majority of its opening losses, but is still 0.2% down to near 1.1700 during the late European trading session on Monday. The major currency pair is still under pressure as renewed geopolitical tensions have prompted a risk-off mood.

The S&P 500 is expected to open lower, considering weakness in futures overnight, reflecting weakness in investors’ risk appetite.

Middle East conflicts have revived as the first round of US-Iran talks has failed, following Tehran’s refusal to give up its nuclear ambitions.

Meanwhile, US President Donald Trump has announced that it will blockade Iranian ports, which will begin on April 13 at 10:00 AM ET, 14:00 GMT.

The risk-off market sentiment has 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 0.2% higher around 99.00.

EUR/USD technical analysis

EUR/USD trades lower at around 1.1700 as of writing. The pair holds a constructive bullish bias as it trades above the 20-day exponential moving average (EMA) at 1.1611 and the 38.2% Fibonacci retracement at 1.1671 as nearby support. The Relative Strength Index (14) at 57.6 is comfortably above the neutral 50 line, hinting that upside momentum is building while remaining short of overbought territory.

On the topside, initial resistance is aligned with the 50.0% Fibonacci retracement at 1.1750, followed by the 61.8% level at 1.1830. Looking down, immediate support is seen at the 38.2% retracement at 1.1671, ahead of the 20-day EMA at 1.1611; a deeper pullback would expose the 23.6% retracement at 1.1572 and, if broken, the structural floor around 1.1413.

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

• USD/CAD trades around 1.3840 on Monday, virtually unchanged on the day after an earlier attempt to rebound.
• Rising Oil prices support the Canadian Dollar and cap further upside in the pair.
• Escalating tensions between the US and Iran revive inflation concerns and reinforce hawkish Fed expectations.

USD/CAD trades around 1.3840 at the time of writing, virtually unchanged on Monday after briefly advancing earlier in the day. The pair struggles to extend its rebound, caught between support for the Canadian Dollar (CAD) from surging Oil prices and expectations of higher interest rates in the United States (US).

Oil prices have surged at the start of the week, with West Texas Intermediate (WTI) gaining nearly 7% on Monday at the time of press. The move comes as geopolitical tensions between the US and Iran intensify following the collapse of diplomatic talks over Iran’s nuclear program. Concerns about potential disruptions to global energy supply, particularly around the Strait of Hormuz, are fueling the rally in Crude Oil prices.

This rise in Oil prices supports the Loonie due to the importance of the energy sector in Canada’s economy. As Canada is the largest Crude Oil exporter to the United States, higher Oil prices tend to strengthen the Canadian currency, limiting gains in the USD/CAD pair.

At the same time, the US Dollar (USD) remains supported. The collapse of negotiations between Washington and Tehran has revived risk aversion in financial markets, leading to heightened concerns about inflation and stronger demand for the US currency. Moreover, the sharp rise in energy prices has rekindled inflation concerns, which could prompt the Federal Reserve (Fed) to maintain a restrictive monetary policy stance for longer than previously expected.

These expectations have pushed US Treasury yields higher, providing additional support to the Greenback. In this context, the USD/CAD pair remains caught between two opposing forces: stronger Oil prices supporting the Canadian Dollar and expectations of a more hawkish Fed, keeping the pair broadly stable at the start of the week.

• EUR/USD reversal from last week's highs near 1.1740 has been contained above 1.1670.
• 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, a few pips shy of the 1.1700 level, after bouncing from session lows at the 1.1670 area during the early Asian session.

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.)