April 22, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar Forecast: GBP, EUR Surge as USD Crashes on Trump-FED Spat

The Pound Sterling has surged to a seven-month best exchange rate level as confidence in the US Dollar has deteriorated further during the Easter weekend.

As well as fears over the economy, Trump’s criticism of Fed Chair Powell has reinforced fears that central bank independence could be compromised and the dollar posted sharp losses to fresh 3-year lows.

In this environment, the Pound to Dollar exchange rate (GBP/USD) jumped to 7-month highs above 1.3400.

EUR/USD also jumped to 41-month highs above the 1.1550 level while gold hit another record high and US equity futures lost ground.

MUFG commented; “While we think it is unlikely the Trump administration will be able to remove the Fed Chair outright given the lack of legal authority, any moves on this front will likely create an outsized market move including in FX and is something to watch closely for moving forward.”

According to Stephen Innes at SPI Asset Management; “One thing that’s absolutely clear — and no longer debatable — is that the reputational hit to the US brand is real, and it’s not fading quietly into the next news cycle.”

He added; “It’s sticking. Investors, allies, and even central banks are starting to bake in the idea that American policymaking, both fiscal and monetary, is now a geopolitical variable — not a given.”

On Friday Trump again attacked Fed Chair Powell and stated that Powell’s termination can’t come quickly enough.

The comments have inevitably stoked criticism on multiple fronts.

Chicago Fed Goolsbee commented on Sunday; “There’s virtual unanimity among economists that monetary independence from political interference — that the Fed or any central bank be able to do the job that it needs to do — is really important.”

According to Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho; “Powell does not report directly to Trump, so (Trump) cannot actually fire him. He can only be removed from office under certain procedures, which one would think have a higher barrier.

He added; “but can the president move the cogs and wheels to undermine the perceived independence of the Fed? Sure, he could.”

Even if Powell is safe in the job, talk of undermining Fed independence is crucial in damaging confidence.

Varathan added; “I would argue that they don’t even need to sack Powell immediately. You just need to create the perception that you could fundamentally change the view of an independent Fed.”

Trade fears have also undermined the dollar amid evidence that China is not backing down and is attempting to recruit countries to its cause.

On Monday, there was tough rhetoric from Beijing.

According to a statement from the Commerce Ministry; “Appeasement will not bring peace, and compromise will not be respected. To seek one’s own temporary selfish interests at the expense of others’ interests is to seek the skin of a tiger.”

It added; “That approach will ultimately fail on both ends and harm others”.

Trump has again complained vigorously about non-tariff barriers including VAT. This focus on areas such as domestic taxation will make it even more difficult to secure trade deals.

According to French Finance Minister Eric Lombard; “Donald Trump has hurt the credibility of the dollar with his aggressive moves on tariffs — for a long time.”

He added; “If Powell is pushed out this credibility will be harmed even more, with developments in the bond market.”

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If we break down below there, some traders will look at this as some type of head and shoulders pattern and it could lead for a drop down to 120. If that ends up being the case, I suspect we have some type of financial crisis. So, watch that very closely.

AUD/USD Technical Analysis

The Australian dollar has broken higher against the US dollar, and it is now peaking above the 0.64 level, an area that has been like a brick wall over the last several months. We are just above the 200 day EMA as I record this, so we’ll have to see if we can stay above here because if we can, that’s not a good look for the dollar. Now, having said that, could the Australian dollar rally pretty significantly?

Well, the answer, I guess, would be yes, because the next massive resistance level would be somewhere around 0.68, where it had spent a couple of years. So, despite the fact that this has been such a brutal move to the upside, the reality is that through the prism of a longer-term chart, we would just be heading to an area of somewhat normalcy as far as trading is concerned.

For a look at all of today’s economic events, check out our economic calendar.

Created on April 21, 2025

• For two consecutive weeks, the GBP/USD currency pair has been trading within an upward channel, culminating in a move towards the $1.3298 resistance level at the end of last week’s trading.
• This was the highest level for the pair in six months, and it closed the week near its highs.
• This raises questions among currency traders about the upward targets for the GBP/USD pair in the coming days.

According to reliable trading platforms, the British Pound is experiencing a sharp rise, having gained 4.5 percent against the US Dollar over the past nine trading days. It faces strong resistance at $1.3430.

Will Sterling’s Gains Increase in the Coming Days?

According to forex market trading. The British pound has achieved a remarkable rise this year, 2025, rising by about 10% since mid-January. Obviously, Sterling’s gains are due to a combination of strong UK economic data and significant US dollar fatigue due to weak sentiment toward the US currency due to Trump’s tariffs and their impact on the US economy and growth prospects.

Also, traders are increasingly betting that the Bank of England may cut interest rates on May 8 to allow the British economy more time to recover. Generally, British inflation is easing, and recession fears are fading. This gives the pound more room to achieve stronger gains unless it is subject to profit-taking and currency traders take new long positions.

Trading Tips:

Closely monitor the factors positively influencing global financial markets and investor sentiment to anticipate the British Pound’s future gains. Remember that it is a risk currency.

Economic Data Affecting GBP/USD:

According to the upcoming economic calendar data, the US Dollar’s performance will be strongly influenced by the Q1 earnings season figures, starting with Tesla’s highly anticipated report on Tuesday. This will be followed by other key earnings updates from tech giant Alphabet, along with Procter & Gamble, PepsiCo, Intel, Boeing, Merck, Philip Morris International, IBM, AT&T, Verizon, T-Mobile, Comcast, Intuitive Surgical, ServiceNow, Thermo Fisher Scientific, AbbVie, Gilead Sciences, CME Group, Newmont, and Visa. In addition to earnings, investors will be watching speeches from Federal Reserve officials Philip Jefferson, Adriana Kugler, Christopher Waller, Patrick Harker, and Austan Goolsbee. Markets will also monitor potential developments in US tariff policy, including the possible response to Asian protectionism and President Trump’s signals regarding trade deals.

On the economic data front, the US economic calendar will be relatively light. US durable goods orders for March are expected to grow sharply for the third consecutive month, while existing home sales are expected to contract.

GBP trading will be influenced by the release of preliminary Purchasing Managers’ Index (PMI) data for April, which provides an early reading of how business activity and sentiment are responding to recent trade developments. Manufacturing activity is expected to remain contracting in the UK. A slowdown is expected in the services sector. Along with the PMIs, UK retail sales data will be closely watched. After two months of gains, sales are expected to have declined in March.

Technical Analysis for the GBP/USD pair today:

The overall trend for the GBP/USD pair remains strongly bullish, and breaking the current $1.3300 resistance will push the bulls towards the next significant resistance at $1.3430, the highest level for the pair since last September. The subsequent upward breakout will be the $1.3600 level. From now until further upward movement, technical indicators confirm their break into overbought territory, as indicated by the RSI, MACD, and Stochastic.

Conversely, over the same timeframe, the initial breakout of the general uptrend requires bears to move towards the 1.3130 support level first. Stabilizing below this level provides an opportunity for bears to move towards the psychological support level of 1.3000, which confirms the downward trend reversal. I still prefer to buy GBP/USD from every downward level, and the closest trading recommendation for GBP/USD is to buy from the 1.3180 support level, with a target of 1.3375 and a stop loss of 1.3100. A sell recommendation for GBP/USD may include the 1.3385 resistance level, with a target of 1.3220 and a stop loss of 1.3470.

The GBP/USD pair is not awaiting significant and influential economic data from either Britain or the United States. Therefore, influential sentiment will be the key factor to consider, as holidays reduce liquidity and traders’ risk appetite.

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Created on April 21, 2025

• Amid strong risk aversion among investors and a flight to the Japanese Yen as a safe haven, selling pressures on the USD/JPY pair have intensified, with losses reaching the $141.60 support level, the lowest for the currency pair in seven months.
• The pair began the new trading week around these losses after failing to rebound upwards last week.

Yen Gains Await Bank of Japan Announcement

According to Forex currency trading experts, the Japanese Yen may stabilize around its strongest gains against other major currencies as investors react to the latest inflation data. Official figures showed that Japan’s headline inflation fell to a four-month low of 3.6% in March, while core inflation rose in line with expectations to 3.2%. Market focus now shifts to the Bank of Japan’s monetary policy meeting this week, where the central bank is widely expected to keep Japanese interest rates unchanged at 0.5%.

However, policymakers may revise their growth forecasts downwards amid increasing concerns about the impact of US tariffs on Japan’s export-dependent economy. While the Bank of Japan is expected to maintain a gradual tightening path this year, driven by persistently high food prices and rising wages, the external trade environment continues to cast a shadow of doubt on its monetary stance. Consider that rising inflation comes at a time when Japan is engaged in difficult trade negotiations with the United States and faces new, stringent tariffs. Steel and aluminum exports are already subject to 25% tariffs, and a decision to impose a 25% tariff on car exports took effect earlier this month.

Trading Tips:

The sharp downward movement of the USD/JPY pair will increase the idea of seizing buying opportunities. Monitor the influencing factors on the currency pair to choose the best trading opportunities.

Is Japan Manipulating Currency Exchange Rates?

In this regard, Japanese Finance Minister Katsunobu Kato told parliament last Friday that Japan is not taking any steps to deliberately weaken the Japanese Yen, rejecting US President Donald Trump’s claims that Tokyo is intentionally devaluing its currency to support exporters. His remarks come ahead of a potential meeting with US Treasury Secretary Scott Bisant in Washington this week during the G20 finance ministers and central bank governors meeting and the International Monetary Fund (IMF) Spring Meetings. If this meeting takes place, it will serve as the main forum for Japan and the United States to address currency issues amid broader negotiations on tariffs that began earlier this week. The Japanese minister pointed out that Japan’s latest intervention in the Forex market involved buying the Yen, not selling it, reflecting Tokyo’s commitment to fair market operations.

While the Japanese minister acknowledged the US’s keenness to raise the issue of exchange rates, he declined to speculate on potential talking points, noting that no date has yet been set for the meeting with Bisant.

USD/JPY Technical analysis and Expectations Today:

According to the performance on the daily chart above, the overall trend for the USD/JPY currency pair remains bearish. Breaking below the $141.60 support level will quickly move the bears towards the psychological support level of $140.00. From now until reaching this psychological level, keep in mind that technical indicators have moved towards strong oversold levels, as observed in the direction of the Relative Strength Index (RSI), MACD, and Stochastic.

Therefore, we still prefer the strategy of buying USD/JPY at every downward level. The most suitable buying recommendation currently is at $140.90 with a target of $144.80 and a stop-loss at $140.00. Currently, the currency pair is not awaiting significant influential economic data today. Therefore, the movement will depend on investors’ risk appetite and expectations for the future policies of global central banks.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

• The EUR/USD outlook indicates further dollar weakness.

• Reports revealed that the US president plans to fire Fed Chair Jerome Powell.

• The European Central Bank cut rates last week, leaving room for more.

The EUR/USD outlook indicates further dollar weakness after Trump’s threats to fire Fed Chair Powell. Market participants are dumping the greenback and US assets, allowing the euro to climb. Meanwhile, the ECB indicated weaker growth in the Eurozone due to Trump’s tariffs. As a result, traders are pricing more rate cuts in the coming months. 

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On Friday, reports revealed that the US president plans to fire Fed Chair Jerome Powell. Since Trump took office, he has advised the Fed to continue cutting interest rates. However, Powell has remained cautious, waiting to see the impact of recent tariffs on the economy. The Fed Chair has repeatedly said there is no hurry to lower borrowing costs. 

The reports caused more turmoil in markets recovering from wild tariff moves. Moreover, investors lost confidence in the US economy, plunging the dollar. 

Meanwhile, although the euro rallied, the European Central Bank cut rates last week and left room for more. ECB president Christine Lagarde noted that Trump’s tariffs would hurt growth. However, she failed to give clear guidance about the next meeting. Still, market participants expect another rate cut in June. Meanwhile, policymakers may wait to see if Trump’s 20% tariff on the Eurozone takes effect. 

EUR/USD key events today

Traders are not anticipating any key economic releases today. Therefore, they will continue to digest US policy developments.

EUR/USD technical outlook: Uptrend breaks past 1.1502 for a new high

On the technical side, the EUR/USD price has rallied and broken above the 1.1502 resistance level. The move has reached a new high, further strengthening the bullish bias. The price now trades well above the 30-SMA, with the RSI in the overbought region. This shows a strong uptrend.

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Bulls took charge when the price crossed above the 30-SMA. They have maintained the price above the SMA, respecting it as a solid support. At the same time, the price has consistently made higher highs and lows, indicating a developed bullish trend. 

However, bulls might pause at the 1.1602 resistance to allow the price to retest the SMA. Still, the bullish bias will remain intact as long as the price trades above the SMA and the RSI above 50. 

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