Created on April 14, 2025

• The last trading week was the strongest for the GBP/USD currency pair, as it moved towards the resistance level of 1.3145, the highest for the pair in six months, before closing the week’s trading around the 1.3082 level.
• Bulls still have the strongest control over the pair’s direction.
• According to Forex market trading, the GBP/USD exchange rate saw a sharp rise, but the GBP/EUR pair fell sharply as the Euro rose amid a continued decline in US stock markets.
• This may reflect a reassessment among investors of the astronomical valuations, which may now be unjustified, that have long prevailed worldwide.

Recently, the decline in the value of the US dollar to its lowest in 3 years coincided with a sharp deterioration in US stock markets, in a clear response to the White House’s trade policy, which aims to bring consumer goods production back domestically. This is expected to erode the earnings and margins of US companies in the short to medium term. This makes the astronomical, if not scandalous, valuations that have prevailed across the Pacific since at least the beginning of the first administration led by Donald Trump, if not longer, indefensible.

According to reliable trading company platforms, the stock market decline is providing a strong boost to the Euro, Swiss Franc, and Japanese Yen, which in turn exacerbates the ongoing declines in both the US Dollar (trade-weighted) and the Chinese Renminbi (trade-weighted), which has fallen significantly below the minimum level set by Beijing for the currency (CHF/CNY, JPY/CNY, and EUR/CNY).

Trading Tips:

The Pound will remain the strongest even with a rebound in the US Dollar price, and therefore, the strategy to buy GBP/USD remains in place.

Bond Selling Affects Market Stability

Amid significant activity in the global bond market, analysts are asking, “If the US government causes stock prices to fall and reduces the profitability of US companies, we must ask ourselves: does the rest of the world still want to invest all its money in US bonds or in stocks?” and “Cash flows have become much larger than trading flows.”

Recently, the UK 10-year bond yield has been trading around 4.75%, maintaining a sense of unease about financial stability in Britain.

According to financial market experts, while bond market instability is driving outflows of US dollars from the United States, markets are anticipating instability in the UK bond market. The sell-off in British government bonds, as we have seen previously following UK financial events, coincided with temporary periods of weakness in the British pound and will increase the risk of a decline in growth in the UK if high yields persist.

Technical Analysis for the GBP/USD pair today:

Looking at the daily chart above, you will notice that the overall trend for GBP/USD remains bullish and may continue as long as it remains stable above the psychological resistance of 1.3000. As mentioned before, this encourages technical buying for the GBP/USD pair. With the recent gains, the 14-day RSI has turned upwards and still has more room before reaching the overbought barrier. At the same time, the Stochastic oscillator is closest to breaking this barrier. The MACD indicator is also in a bullish turn. The nearest resistance levels for GBP/USD are currently 1.3140, 1.3220, and 1.3300 respectively. From the last level, technical indicators will move towards strong overbought levels.

Conversely, over the same timeframe, the 1.2880 support level will remain an important barrier to a downward trend. The currency pair is not awaiting significant performance-influencing data during today’s trading. Therefore, investor sentiment regarding risk appetite and the performance of global financial markets will continue to influence today’s trading.

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Created on April 14, 2025

• During the trading session on Friday, the US dollar initially plunged against the Japanese yen, but we have seen a nice bounce, from the crucial ¥142 level.
• This is an area that’s been important multiple times in the past, so it would not surprise me at all to see the beginning of something along the lines of a turnaround in this area.
• Ultimately, the candlestick for the day looks like it’s going to be a bit of a hammer, although not a perfect one as the “head of the hammer” might be a little bigger than most people would like.

Technical Analysis

The technical analysis for this USD/JPY pair is extraordinarily negative, and I do recognize that although the interest rate differential continues to favor the US dollar, especially as bonds in America selloff, sometimes higher interest rates can be a bad thing. I think we are in one of those times right now, but if we do get some type of stability in the markets, that will probably turn this market right back around, sending the US dollar much higher against the Japanese yen.

If we were to break down below the ¥142 level, then I think it opens up the possibility of a move down to the 140 in level, which is a large, round, psychologically significant figure, and an area that historically speaking, has been important. On the other hand, if we can recapture the ¥145 level to the upside, then I think the US dollar starts to rally toward the crucial ¥148 level, an area that had been a massive barrier multiple times in the recent past. Regardless, I do think that we will see a fairly big move, and it might also be worth noting that the Friday session was when we saw a bit of a bounce, perhaps traders are a bit concerned about trying to hang onto a short trade heading into the weekend.

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• EUR/USD stays in positive territory near 1.1400 on Monday.
• The near-term technical outlook points to overbought conditions for the pair.
• The US Dollar struggles to rebound despite easing trade tensions.

EUR/USD gained more than 3.5% in the previous week and touched its highest level in over three years above 1.1470 on Friday. Following a technical correction heading into the weekend, the pair started the week slightly lower but didn’t have a difficult time regaining its traction. At the time of press, EUR/USD was trading in positive territory at around 1.1400.

Although easing tensions surrounding the US-China trade conflict seems to be helping the market mood improve at the beginning of the week, the US Dollar (USD) finds it difficult to attract buyers.

US President Donald Trump’s administration granted some technology imports, including smartphones, computers, laptops and disc drives, exemptions from the steep 125% additional tariffs imposed on China. These products will reportedly still be subject to the 20% existing tariffs, which were imposed initially because of the fentanyl crisis in the US.

Over the weekend, US Commerce Secretary Howard Lutnick said that technology imports, alongside semiconductors, will face separate new levies within the next two months.

Reflecting the positive shift in risk sentiment, US stock index futures rise between 0.9% and 1.8% in the European morning.

The economic calendar will not feature any high-tier data releases on Monday. Later in the American session, several Federal Reserve (Fed) policymakers will be delivering speeches. The CME FedWatch Tool shows that markets are currently pricing in about a 20% probability of a 25 basis points Fed rate cut at the May policy meeting. In case Fed officials reiterate the need to remain patient regarding policy-easing, the USD could stay resilient against its peers and limit EUR/USD’s upside.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart holds above 70, suggesting that EUR/USD remains technically overbought.

In case EUR/USD stabilizes above 1.1400 (psychological level, static level), 1.1470 (static level) could be seen as next resistance before 1.1500 (round level). Looking south, first support could be spotted at 1.1340 (static level) ahead of 1.1300 (static level, round level) and 1.1250 (static level).

Created on April 14, 2025

• The British pound initially fell against the Japanese yen during trading on Friday, only to turn around and show signs of life, as the market has seen quite a bit of volatility.
• At this point in time, the GBP/JPY pair continues to look at the ¥187 level.
• With that being said, the market is likely to continue to be very noisy, but I do think that the ¥185 level will be important, as it has been important multiple times in the past, and I think that will be the way forward at this juncture. As long as we can stay above there, then I think the British pound has a chance to turn things around and show signs of life.

Technical Analysis

This is a market that I think given enough time we will have to sort out what was to do next, but in the meantime, I think we should probably look at this as being in the middle of a consolidation pattern, with the ¥185 level on the bottom in the ¥190 level on the top. As we are basically hanging around the ¥187.50 level, we are essentially in the middle of this range, and therefore you can make an argument that we are basically at “fair value.”

If we were to break above the ¥190 level, then I think we have a real shot at this pair going much higher, perhaps to the ¥195 level, and also I think you could see the Japanese yen get hammered against most currencies, not just this one. On the other hand, if this pair were to break down below the ¥185 level, then there’s a real shot that the Japanese yen strengthens against almost everything else as well. At this point, it seems like it’s all about the Japanese yen and the safety trade, which of course the Japanese yen is considered to be a “safety currency.” Until things settle down, it’s probably somewhat sluggish to the upside.

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