Forex News
- NZDJPY trades near the 90.50 zone following a modest bounce in Thursday’s session.
- Bullish momentum remains fragile as indicators deliver mixed short-term signals.
The NZDJPY pair was seen trading near the 90.50 area on Thursday, stabilizing after mild intraday gains. The pair is attempting to consolidate above key short-term levels, as investors weigh broad risk sentiment and upcoming Asian market flows. Price action remains within the day's range, hinting at indecision despite the mild upside.
From a technical standpoint, the pair is showing a cautiously bullish signal. While the Relative Strength Index is hovering in neutral territory, the MACD shows early signs of positive momentum. Other indicators, such as the Stochastic oscillator and Commodity Channel Index, remain neutral, underlining the pair’s lack of strong directional conviction.
However, short-term moving averages are beginning to turn favorable. The 10-day EMA and SMA are showing early signs of a shift, while the longer-term 20, 100, and 200-day SMAs remain tilted lower, reflecting the broader bearish structure. If momentum builds, a test of the resistance cluster near the 90.70–90.90 area may be on the cards.
Key support levels rest at 90.10, followed by 89.80. To the upside, resistance is located at 90.70, 90.90, and further out at 91.20.
- Mexican Peso appreciates as USD/MXN dips to 19.57, market prices in another 50 bps Banxico cut.
- Mexican inflation beats estimates but stays within Banxico’s target range.
- Citi survey shows most economists expect a 50 bps rate cut on May 15.
- Trump’s selective tariffs raise trade risks but spare Mexico—for now.
The Mexican Peso registered modest gains versus the US Dollar on Thursday due to the latter’s broad weakness, even though Mexico’s inflation came in slightly higher than expected. At the time of writing, the USD/MXN trades at 19.57 after hitting a daily high of 19.63.
Mexico’s annual inflation exceeded estimates in April, yet prices remained within Banco de Mexico’s (Banxico) 2% to 4% inflation range goal. Although prices ticked up, Banxico is projected to continue cutting rates by 50 basis points (bps) at the May meeting, which would be its third reduction of that size, following four straight 25 bps cuts since mid-2024.
In its latest Expectations Survey, Citi Mexico revealed that 36 economists polled expect the central bank will cut rates on May 15.
US President Donald Trump’s tariffs on Mexico's auto, steel and aluminum exports could further damage the country’s manufacturing base. However, some exporters were relieved that Trump had applied duties to most US trading partners but had kept Mexico off the list.
Mexican President Claudia Sheinbaum has said she wants to reach an agreement with Trump, but did not strike a deal in a phone call with him last week.
Ahead in Mexico’s economic docket, traders brace for the release of Economic Activity data.
Daily digest market movers: Mexican Peso unfazed by Banxico’s dovish stance
- The central bank divergence between Banxico and the Fed favors further upside in USD/MXN. Banxico’s Governing Council expressed its decision to continue easing the policy. Conversely, the Fed is considered cautious, as some officials have shown concerns about a reacceleration of inflation spurred by tariffs.
- Mexico’s Mid-month inflation in April accelerated by 3.96%YoY, above estimates of 3.78%. Core prices jumped from 3.56% to 3.90% YoY. Both figures remained within Banxico’s 3% goal plus or minus 1% range.
- Retail Sales in February were lower than expected, showcasing the ongoing economic slowdown, according to the Instituto Nacional de Estadistica Geografia e Informatica.
- Citi Mexico's expectations survey shows that economists expect Banxico to cut its rate by 50 basis points at the May meeting. For the full year, they project the main reference rate to end near 7.75%.
- Regarding the USD/MXN exchange rate, private analysts see the exotic pair finishing at 20.93, up from 20.90. Inflation in 2025 is projected to finish at 3.78% with core figures at 3.80% mostly aligned with the previous poll.
- Mexico’s economy is expected to grow 0.2% in 2025, below the 0.3% projected in the prior survey.
USD/MXN technical outlook: Mexican Peso remains bullish as USD/MXN stays below the 200-day SMA
The USD/MXN downtrend remains intact, but it seems that sellers are taking a breather. They failed to drag the exchange rate below April 23’s low of 19.46. A daily close below 19.50 could expose the current year-to-date (YTD) low, followed by the 19.00 psychological figure.
If buyers want to push prices higher, they must reclaim the 200-day SMA at 19.92, followed by the 20.00 figure. A breach of the latter will expose the confluence of the April 14 high and the 50-day SMA near 20.25-20.29 before testing the 100-day SMA at 20.33.
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- The AUD/USD pair trades at 0.6400, up more than 0.50% on Thursday .
- US President Donald Trump confirmed a trade meeting with China, but no major agreements were reached.
- Durable Goods Orders rose 9.2% in March, exceeding expectations. Jobless claims increased slightly to 222K.
The AUD/USD pair holds strong on Thursday as the US Dollar (USD) remains weak. Despite some positive US economic data, including stronger-than-expected Durable Goods Orders, uncertainty around US-China trade talks and the broader tariff situation continues to affect market sentiment. The pair’s movements reflect the broader uncertainty in global markets.
Daily digest market movers: US data is mixed amid ongoing trade tensions
- On the US front, Durable Goods Orders in March surged by 9.2%, exceeding market expectations for a 2% rise. Jobless claims increased slightly, with 222K new filings for the week ending April 19.
- US-China trade tensions continue to weigh on market sentiment, despite talks.
- The Federal Reserve’s (Fed) stance remains uncertain, with hopes for a pivot amid ongoing inflation concerns.
- US economic growth forecasts for 2025/2026 have been lowered due to trade uncertainties.
- Gold prices rise 1%, supported by weaker US Treasury yields and a cautious outlook for the USD.
- US equities show mixed reactions to economic data, with some optimism but also resistance near record highs.
- Investors are weighing the potential for a de-escalation in the US-China trade war.
- Uncertainty around inflation and potential rate cuts from the Fed continue to influence market movements.
- The US Dollar remains under pressure as geopolitical tensions and trade risks dominate headlines.
Technical Analysis: AUD/USD shows bullish bias, resistance ahead
The AUD/USD pair is currently trading at 0.6400, up 0.66% for the day. Price action is contained within the day’s range of 0.6344 to 0.6409. The Relative Strength Index (RSI) is neutral at 58.62, while the MACD is generating a buy signal. The Commodity Channel Index (CCI) at 76.33 and Bull Bear Power at 0.0085 indicate neutral conditions. Short-term moving averages, including the 10-day EMA at 0.6348 and 10-day SMA at 0.6364, reinforce the bullish outlook. However, the 200-day SMA at 0.6470 presents resistance. Key support levels are at 0.6385, 0.6364, and 0.6348, while resistance is found at 0.6412 and 0.6470. The pair is poised for further upside, but resistance levels remain a critical factor to monitor.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- USD/JPY trades around the 143.00 zone, reversing earlier gains in Thursday’s session.
- Fed rate cut hopes and record-high US tariffs on China weigh on sentiment.
- Resistance is seen near 143.05 and 145.10, with support at 142.45 and 142.26.
The USD/JPY pair moved lower during Thursday’s European session, retreating toward the 143.00 zone after two days of modest recovery. The shift comes amid renewed US Dollar weakness as Fed rate cut speculation resurfaces and trade headlines stir market uncertainty. With risk sentiment modestly improved and US equities pushing higher—boosted by upbeat Durable Goods data and Trump’s trade optimism—the Japanese Yen continues to outperform most G10 peers, supported by a pullback in US yields and ongoing safe-haven demand.
Markets entered Thursday’s session with a cautiously positive tone, sparked by US President Donald Trump’s comments on striking a deal with China and softening his stance on tariffs. Though US Treasury Secretary Scott Bessent later clarified that no formal offer had been made to China, he acknowledged that current tariff levels were likely unsustainable. On the data front, headline US Durable Goods Orders for March surged 10.4%, but the core reading excluding transportation fell flat at 0.0%, painting a mixed economic picture.
Meanwhile, weekly Initial Jobless Claims ticked up slightly to 222K, suggesting minor softening in the US labor market. Fed Governor Beth Hammack emphasized patience in monetary policy, stating the Fed may act by June if data justifies it. These dovish tones, alongside persistent political and fiscal headwinds, have dragged the US Dollar Index (DXY) back below 99.50, limiting any rebound in USD/JPY.
In Japan, attention is turning to next week’s visit by Economy Minister Ryosei Akazawa to Washington for renewed tariff negotiations. Prior discussions with the US were reportedly unfavorable for Japan, particularly regarding automobile and steel tariffs. Despite this, the Bank of Japan remains one of the few G10 central banks maintaining a hawkish outlook, providing longer-term support for the Yen.
Technical outlook
From a technical standpoint, USD/JPY is flashing bearish signals. The Relative Strength Index (RSI) sits in neutral territory near 39, while the Moving Average Convergence Divergence (MACD) continues to issue a sell signal. Additional neutral readings come from the Williams %R and Bull Bear Power indicators, suggesting limited conviction on intraday direction.
The broader trend bias remains bearish, as the 20-day, 100-day, and 200-day Simple Moving Averages all slope downward. Shorter-term Exponential Moving Averages (10-day at 143.05 and 30-day at 145.70) further cap upside attempts.
Immediate resistance is seen at 143.05, with further hurdles at 144.53 and 145.10. On the downside, support levels are aligned near 142.45 and 142.26. A decisive break below these could open a path toward the 141.00 handle.
Unless the USD sees renewed demand or tariffs talks provide a lasting catalyst, the path of least resistance for USD/JPY may remain tilted downward.
The renewed selling pressure prompted the Greenback to set aside two daily advances in a row on Thursday as investors remained apathetic regarding any real progress on the US-China trade tensions.
Here is what you need to know on Friday, April 25:
The US Dollar Index (DXY) traded on the defensive and receded to the low-99.00s amid the widespread retracement in US yields across different time frames. The final Michigan Consumer Sentiment print will close the US docket.
EUR/USD saw its buying bias revitalised following the recent test of the 1.1300 neighbourhood. The ECB will release its Consumer Inflation Expectations survey, while member Buch is also due to speak.
GBP/USD regained composure, leaving behind two straight daily declines and reclaiming the area above 1.3300 the figure. Retail Sales will take centre stage, seconded by the GfK’s Consumer Confidence measure.
USD/JPY faced the resurgence of the downside pressure and eased from recent peaks north of the 143.00 barrier. The Tokyo’s Inflation Rate is next on tap on the Japanese calendar.
AUD/USD managed to pick up pace and leave behind part of the recent pullback, coming in close to the key hurdle at 0.6400. Next release of note in Oz will be the quarterly Inflation Rate and the RBA’s Monthly CPI Indicator on April 30.
WTI prices recouped part of Wednesday’s pullback and revisited the area beyond the $63.00 mark per barrel on renewed tariff concerns.
Gold prices reversed course and clocked decent gains, retesting the $3,370 zone per troy ounce on the back of bargain hunting mood and tariff uncertainty. Silver prices could not sustain Wednesday’s strong rebound, coming under renewed pressure and approaching the $33.00 mark per ounce.
- The US Dollar Index trades near the 99.40 zone after reversing earlier gains during Thursday’s session.
- Traders digest softer unemployment data, Durable Goods surprises, and mixed trade signals from Trump and Bessent.
- DXY remains under pressure below moving averages, with resistance at 100.00 and support around 99.33.
The US Dollar (USD) retreats on Thursday as a cocktail of mixed economic data, dovish Federal Reserve (Fed) signals, and murky US-China tariff messaging unsettles market sentiment. After testing highs near 100.00 early in the day, the US Dollar Index (DXY) reversed course and was last seen drifting around 99.41, down 0.37%.
Investors recalibrated expectations after US President Donald Trump and Treasury Secretary Scott Bessent pushed back against claims of a unilateral tariff cut on Chinese goods. While Trump hinted at potential tariff relief if talks progress, Chinese officials reiterated that no negotiations were currently underway, demanding the removal of reciprocal tariffs before dialogue resumes.
Fed officials added further intrigue. Cleveland Fed President Beth Hammack stressed caution but acknowledged the potential for rate adjustments as early as June. Meanwhile, Governor Christopher Waller warned that firms remain paralyzed by tariff-induced uncertainty, hinting at broader economic spillovers.
Daily digest market movers: US data is getting muddy
- Durable Goods Orders surprised with a 9.2% surge, driven by airplane orders, though core orders remained flat.
- Initial jobless claims rose to 222K; continuing claims dropped to 1.841M, adding mixed labor signals.
- Trump and Bessent reiterated that no unilateral tariff cuts are on the table, with China demanding full tariff removals before talks.
- Fed officials opened the door to rate cuts in June if recession signals intensify, fanning investor hopes for easing.
- US stocks initially surged on optimism before trimming gains; Gold remains elevated above $3,300 as yields fall.
Technical Analysis: DXY slips as momentum fades below 100.00
Technically, the US Dollar Index (DXY) continues to flash bearish signals while hovering around 99.41 in Thursday’s session. Price action remains confined between 99.24 and 99.84 as traders await clearer catalysts. The Relative Strength Index (RSI) stands at 34.62, suggesting neutral momentum, while the Moving Average Convergence Divergence (MACD) maintains a sell signal, reflecting underlying weakness.
Both the Bull Bear Power indicator at −1.63 and the Awesome Oscillator at −3.31 also indicate waning conviction. A deeper look at trend signals reveals a firm bearish setup: the 10-day Exponential Moving Average (EMA) at 100.01 and Simple Moving Average (SMA) at 99.63, alongside the 20, 100, and 200-day SMAs at 101.54, 105.85, and 104.56, respectively, all lean bearish.
Immediate support is noted at 99.34, while resistance is capped at 99.63. A breakout above 100.01 would be needed to reestablish a bullish bias, with the next upside target at 101.10. Until then, the path of least resistance remains to the downside, particularly if trade uncertainty and softening macro data persist.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- DJIA gains 0.62% as traders price in June Fed rate cut chances.
- Trump’s softened tone on China trade spurs risk-on rally near 40,000.
- Gold climbs above $3,300 as yields slump despite stronger US data.
The Dow Jones Industrial Average (DJIA) registered gains of over 0.62% as investors became optimistic that the Federal Reserve (Fed) could cut interest rates at its June meeting amid growing concerns of a recession in the United States (US). This, along with an improvement in risk appetite due to the US willingness to strike a deal with China, drove the DJIA near the 40,000 mark after bouncing off daily lows of 39,200.
Fed pivot hopes and hints of US-China trade thaw lift Wall Street, though resistance looms near record highs
On Wednesday, US President Donald Trump adopted a moderate stance on China toward trade talks in Beijing and even talked about reducing levies on its products, a sign of openness towards reaching a deal. Nevertheless, US Treasury Secretary Scott Bessent said, “No unilateral offer from Trump to cut China tariffs.”
During the overnight session for North American traders, Chinese Ministry of Commerce spokesperson He Yadong said there were no trade talks with the US and called for the cancellation of “unilateral” tariffs.
US economic data lifted the market mood as the jobs market witnessed a report aligned with forecasts, while Durable Goods Orders jumped sharply in March, sponsored by airplane orders.
An improvement in market mood failed to weigh on Gold prices, with the precious metal back above $3,300, up 1%, underpinned by failing US Treasury yields as the 10-year T-note coupon plunges seven and a half basis points to 4.309%.
Dow Jones price forecast
Dow’s downtrend remains in place, but buyers are gathering some steam. Recently, US President Donald Trump said they held talks with China in mourning, sparking a jump in the DJIA, which hit a daily high at 40,002.
If buyers push the Dow past 40,500, this could pave the way to challenging last week’s peak at 40,790. Key resistance lies ahead at 41,000. Conversely, if sellers drive the index below April 23’s low of 39,486, look for a test of April 22’s high of 39,271 to close the gap up witnessed between April 22 and 23.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
On Thursday, United States (US) President Donald Trump confirmed that a meeting with Chinese officials took place earlier that morning. He made the remarks during a press conference alongside Norwegian Prime Minister Jonas Gahr Støre, where he addressed several key international issues.
Trump said that Ukraine and Russia must come to the table to reach a peace deal. He added that the NATO alliance is very important for Europe and that without the US, it would be less powerful. He added that he would be talking about trade and other things with Norway.
Market’s reaction
US equities spiked on China’s headline, indicating that investors seem confident both countries could reach a deal.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
- USD/CAD trades near the 1.3900 zone amid ongoing Greenback weakness.
- Fed officials highlight tariff-driven risks, while Durable Goods data sends mixed signals.
- Key resistance is clustered near 1.3905 and 1.4000, with support at 1.3865 and 1.3848.
The USD/CAD pair was seen hovering around the 1.3900 zone on Thursday, mildly lower on the day, as the US Dollar (USD) struggles to maintain momentum amid renewed tariff uncertainty and conflicting US economic signals. Despite a stronger-than-expected headline Durable Goods report, underlying data fell flat, reinforcing caution among investors. Canadian Dollar (CAD) sentiment, meanwhile, remains stable but lacks the upside strength shown by other major currencies, as the pair stays within a narrow consolidation band established earlier in the week.
Federal Reserve (Fed) Governor Christopher Waller struck a cautious tone on Thursday, suggesting that tariffs could distort labor market dynamics and weigh on corporate hiring decisions. He emphasized that many firms remain frozen by policy uncertainty and warned that rate cuts could eventually follow if unemployment begins to rise. Meanwhile, Cleveland Fed President Beth Hammack echoed the call for patience, hinting at possible adjustments as soon as June if economic conditions warrant.
In terms of economic data, US Durable Goods Orders surged 9.2% in March, far exceeding expectations. However, the core figure excluding transportation came in flat, tempering enthusiasm. Separately, Initial Jobless Claims ticked up to 222K, reflecting a slight softening in labor market conditions. Despite the data-driven bump, USD sentiment was mostly overshadowed by the ongoing debate around trade policy. President Trump and Treasury Secretary Bessent reiterated that no concessions had been made to China on tariffs, underscoring the lack of progress in negotiations and weighing on the DXY, which drifted near 99.30.
Technical outlook
From a technical perspective, USD/CAD maintains a bearish tone. The Relative Strength Index (RSI) sits in neutral territory around 37 recovering from oversold conditions, while the Moving Average Convergence Divergence (MACD) continues to point lower. Momentum offers a slight counterweight with a mild buy signal, though the Stochastic %K remains subdued near oversold levels.
Trend-following indicators reinforce the downside bias. The 20-day, 100-day, and 200-day Simple Moving Averages, along with the 10-day and 30-day Exponential Moving Averages, are all sloping downward, capping upside attempts. Resistance is noted at 1.3905, followed by the 1.4002–1.4009 area, while support lies at 1.3865 and 1.3848. A clear break below this range could expose the pair to further downside, targeting the 1.3745 region next.
In summary, unless clearer progress emerges on trade talks or macro data significantly shifts expectations, USD/CAD may continue to drift within its current range, with risks tilted to the downside.
Daily chart
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
