• 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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April 13, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar Forecast: Banks Radically Hike 12-month Predictions to 1.30-1.39

The Pound-to-Dollar exchange rate (GBP/USD) posted sharp losses to near 1.2700 early in the week before a surge to highs near 1.3150 as the dollar slumped amid very high volatility.

According to ING; “The question of a potential dollar confidence crisis has now been definitively answered – we are experiencing one in full force.”

Goldman Sachs has radically changed its view and is now forecasting dollar losses. The 12-month GBP/USD forecast has been revised to 1.39 from 1.24 previously.

Investment banks have generally downgraded dollar forecasts which has increased GBP/USD projections even though banks are far from convinced over the UK outlook.

According to Scotiabank, on a near-term view, gains above 1.32 would lead to gains to 1.34.

Nordea now expects GBP/USD will trade at 1.30 at the end of 2025 compared with the 1.23 forecast previously.

According to Nordea; “We have made a complete reversal in our dollar outlook and now expect the dollar to weaken rather than strengthen.”

UK GDP data was stronger than expected, but global developments dominated.

Although a slide in risk appetite undermined the Pound on the crosses, dollar losses triggered the GBP/USD rebound.

RBC pointed to huge elements of uncertainty; “The question for FX though is how the US shock will compare to the rest of the world? How much if anything will be in place a month from now, or six months from now?”

It added; “All we can say at the moment is that whether or not tariffs are implemented, the uncertainty is going to have a negative growth impact, not just on the US.”

RBC also commented; “Trump’s desire to break with the post-WW2 world order has investors questioning whether USD can retain its status as the world’s primary reserve currency.”

It added; “Summing it up leaves us with a bias for USD to drift lower over the next 12-18 months but mindful that sudden policy changes could shift that view materially in either direction.”

RBC expects GBP/USD to be capped around 1.30 over the next 12 months.

Goldman Sachs explained its change of stance; “First, the combination of an unnecessary trade war and other uncertainty-raising policies is severely eroding consumer and business confidence. Second, negative trends in US governance and institutions are eroding the appeal of US assets for foreign investors. Third, rudimentary calculations and a constant back-and-forth makes it difficult for investors to price outcomes other than high uncertainty.”

President Trump’s imposition of reciprocal tariffs had triggered an element of defensive dollar buying, but buyers were quickly overwhelmed by sellers.

Support collapsed amid fear over the US economy as the US-China trade war intensified.

After warning against retaliation, Trump increased tariffs on imports from China to 145% while China refused to back down and increased tariffs on US imports to 125%.

If these tariffs are sustained for any significant period, there will be major dislocation to trade and economic damage.

Other reciprocal tariffs were delayed by 90 days as the Administration was forced to blink amid market chaos, but uncertainty remained intense.

Unusually, US equities, bonds and the dollar all weakened at the same time which suggested a notable loss of confidence in US assets.

UBS commented; “As a result of this tariff chaos, Treasury markets saw fluctuations during the week, which reminded some investors of the “Truss-moment” from the gilt market in 2022.

UBS added; “In our view, much damage has been done, which is not easily reversible.

It forecasts GBP/USD gains to 1.34 by March 2026.

Danske Bank now forecasts GBP/USD gains to 1.41 on a 12-month view from 1.31 previously.

Scotiabank’s Chief FX Strategist Shaun Osborne also referenced UK parallels; “Financial markets can have a disciplining effect, as former UK PM Truss discovered in 2022 when the pound, Gilts and UK equities were falling in unison. That has been happening in the US this week and it is a clear signal that markets anticipate negative consequences from the US’ pursuit of aggressive tariffs on its trade partners and are dumping US assets as a result.”

He added; “The 90-day reprieve won’t help. It just prolongs the uncertainty and increases the risk of a negative economic outcome. A tariff off-ramp must be found quickly or the USD will continue to fall.”

According to ANZ group chief economist Richard Yetsenga; “Regardless of how the next 90 days evolve, the U.S.’s international reputation has been eroded.”

Comments from Nomura strategist Naka Matsuzawa were unusually forthright; “I’m deeply concerned about a lack of confidence among investors in the U.S. now. It’s a no confidence vote from not just the equity market but also Treasury market participants in the Trump administration and its policies.”

Latest US inflation data was weaker than expected and markets expect three Fed rate cuts this year despite fears that tariffs will put upward pressure on inflation.

US Congress pushed ahead with tax cuts in the budget resolution with the budget expected to increase long-term deficits.

ING added; “We also cannot exclude that the budget resolution passed by the House yesterday, which poses significant funding questions for tax cut extensions, is adding another layer of risk premium to risk assets and Treasuries.”

Long-time dollar bull HSBC is wavering; “We have pushed back against such concerns over the years given resilient US growth supporting high yields and solid foreign demand for US assets. Yet, we cannot easily brush aside the USD’s structural weaknesses, especially given the current climate.”

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TAGS: Currency Predictions Pound Dollar Forecasts

April 12, 2025 – Written by Ben Hughes

STORY LINK Euro to Dollar Forecast: Three-Year Best, EUR/USD at 1.20 Possible

The Euro to Dollar exchange rate (EUR/USD) surged to 3-year highs at 1.1470 on Friday before a corrective retreat to near 1.13.

MUFG is another investment bank to have changed its stance and that, with a risk that dollar confidence is eroded further, 1.20 in EUR/USD is now reachable.

According to MUFG; “There are numerous factors that have created these financial market conditions and until some of these are addressed it is difficult to see a turnaround in current market direction.”

Higher US yields have not helped the dollar.

MUFG added; “If we are possibly entering a crisis of confidence period, then there tends to be a breakdown in the normal financial market variables that drive FX. This is happening to some degree now with short-term rate spread moves not aligned to the scale of dollar sell-off.”

The latest data triggered further stagflation fears in the US economy.

The University of Michigan consumer confidence index declined sharply to 50.8 for April from 57.0 the previous month and below consumer forecasts of 54.0. This was the lowest reading since November 2022.

Both the current conditions and expectations components posted sharp declines on the month.

Surveys of Consumers Director Joanne Hsu commented; “Consumer sentiment fell for the fourth straight month, plunging 11% from March.”

She added; “Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month.”

The 1-year inflation expectations index jumped again to 6.7% from 5.0%. This was the fourth successive jump and the highest reading since 1981.

The combination of recession fears and higher inflation would not be favourable for the dollar.

MUFG considers that bond-market vulnerability is another key element.

According to the bank; “We believe it’s no coincidence that the turmoil has unfolded in the same week that we have had developments in regard to Trump’s proposed tax cut plans.

The House has agreed a budget that extends the 2027 tax cuts. According to the Congressional Budget Office, fiscal measures overall would increase the US debt by at least $5trn over 10 years

According to MUFG; “The US fiscal deficit is simply out of control and there appears little appetite in Congress amongst Republicans to tackle the issue.”

In this context, a US-China trade war poses significant risks to the Treasury market and the dollar.

China holds around $700bn in Treasuries and any selling would risk another jump in yields.

According to MUFG; “it remains unclear to what extent UST bond holdings have been reduced. Still, all it would take in current market conditions would be for China to hint at action to likely trigger another wave of volatility and selling.”

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TAGS: Euro Dollar Forecasts

April 9, 2025 – Written by Tim Boyer

STORY LINK Euro to Pound Forecasts RAISED to 0.86 in Six Months at Rabobank

Foreign exchange analysts at Rabobank have raised their exchange rate forecasts for the Euro versus the Pound Sterling.

Recent US tariff concerns have driven investors towards currencies backed by current account surpluses, benefiting the Euro (EUR).

“The Eurozone’s current account surplus appears to be a source of support for the EUR currently.”

The Euro’s resilience as a temporary safe haven reflects investors’ preference to hold cash amid market uncertainty.

“Investors appear to be sitting on cash in CHF, JPY and EURs while waiting for current fog of uncertainty to clear.”

The Pound Sterling (GBP) remains vulnerable due to the UK’s persistent current account deficit, especially when domestic fundamentals weaken.

“The UK’s current account deficit can leave GBP exposed when UK fundamentals turn sour and international investors look for the exits.”

Germany’s shift towards increased public spending, notably in defence and technology, further boosts the Euro’s attractiveness.

“Investors had already been looking for fresh opportunities in Europe, so sitting on cash in EURs may seem like a reasonable position.”

Consequently, Rabobank has raised its EUR/GBP forecast to 0.85 for the six-month horizon.

“We have adjusted our EUR/GBP forecasts higher and now see the currency pair at 0.85 on a 6 month vs. compared with a previous forecast of 0.83.”

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TAGS: Currency Predictions Euro Pound Forecasts

Created on April 11, 2025

• The Euro rallied rather significantly during the trading session on Thursday, touching the 1.12 level, and even breaking above it at one point during the day.
• That being said, the euro is getting a bit overextended, and it will be interesting to see how much longer this can continue.
• While it is possible that the euro continues to scream higher against the US dollar, and it’s also possible that the trump administration would be perfectly fine with that, the reality is that eventually momentum becomes a problem yet again.

Recessionary Fears

While Germany is exiting a recession, it looks like the United States might be heading toward one. Whether or not it is a long-term recession remains to be seen, but it’s worth noting that the CPI numbers were lower than anticipated during the trading session on Thursday, and of course traders are already starting to perhaps get in the back of their mind that the Federal Reserve may have to come in and start cutting rates. If they actually do that, then it makes a lot of sense that we would see the US dollar weaken.

What’s interesting to me is that this is a market that could turn around just as quickly as it rallied, because quite frankly, if the global economy slows down, Europe is not going to be immune from it. Ironically, yields in America are rallying while the dollar is falling, suggesting that perhaps there is still a major influence on the air due to U.S. Treasury selling. Eventually, if countries wish to do cross-border transactions, they will need those US dollars. It is because of this and the structure of the Euro dollar system that I think the upside will eventually slow down.

That being said, we could go to the 1.15 level, but we could just as easily see some type of shock to the system that sends everybody back down to the 1.10 level. Ultimately, the market is certainly trying to break out, but it still got some work to do see if it has any real follow-through at this point.

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Created on April 11, 2025

• The Euro rallied rather significantly during the trading session on Thursday, touching the 1.12 level, and even breaking above it at one point during the day.
• That being said, the euro is getting a bit overextended, and it will be interesting to see how much longer this can continue.
• While it is possible that the euro continues to scream higher against the US dollar, and it’s also possible that the trump administration would be perfectly fine with that, the reality is that eventually momentum becomes a problem yet again.

Recessionary Fears

While Germany is exiting a recession, it looks like the United States might be heading toward one. Whether or not it is a long-term recession remains to be seen, but it’s worth noting that the CPI numbers were lower than anticipated during the trading session on Thursday, and of course traders are already starting to perhaps get in the back of their mind that the Federal Reserve may have to come in and start cutting rates. If they actually do that, then it makes a lot of sense that we would see the US dollar weaken.

What’s interesting to me is that this is a market that could turn around just as quickly as it rallied, because quite frankly, if the global economy slows down, Europe is not going to be immune from it. Ironically, yields in America are rallying while the dollar is falling, suggesting that perhaps there is still a major influence on the air due to U.S. Treasury selling. Eventually, if countries wish to do cross-border transactions, they will need those US dollars. It is because of this and the structure of the Euro dollar system that I think the upside will eventually slow down.

That being said, we could go to the 1.15 level, but we could just as easily see some type of shock to the system that sends everybody back down to the 1.10 level. Ultimately, the market is certainly trying to break out, but it still got some work to do see if it has any real follow-through at this point.

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Created on April 11, 2025

• The British pound has rallied rather significantly during the session on Thursday as we have seen the US dollar take it on the chin.
• Ultimately, the market is looking at the concerns when it comes to tariffs, and the US dollar has been sold off as a result.
• Furthermore, the CPI numbers came out much lower than anticipated during the trading session, so perhaps traders are starting to price in the idea of a recession in the United States.

Technical Analysis

The technical analysis for the GBP/USD pair is all over the place, and it really comes down to what your time frame is. After all, short-term traders have been whipped in both directions over the last couple of days, but longer-term traders have been buyers over the last several months. That being said, the market is likely to continue to see a lot of volatility, see you do have to be cautious with your position sizing. That being said, it is worth noting that the pair is approaching the crucial 1.30 level, which of course is a large, round, psychologically significant figure, and an area where we have seen a lot of business conducted.

I think the next couple of days will be crucial, because it will give us an idea as to what people are going to do for safety. After all, treasuries are selling off, giving higher interest rates in America, which is a bit counterintuitive. As long as that’s the case, then you will see the British pound in other currencies do quite well against the US dollar, but if traders run to treasuries for safety again, that will drive up the US dollar. As things stand right now, it feels a little bit like we are seeing a lot of capital flight from the United States, perhaps due to the tariff wars.

That being said, there’s a lot to take in here, and I do think that we have a situation where we probably try to carve out some type of range using the 1.2750 level is the bottom, and it may be the 1.30 level as the top. We could even extend that to the 1.32 level, due to the massive amounts of volatility that we continue to see an all markets, not just this one.

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EUR/USD trades at its highest level since February 2022 above 1.1400.

The USD selloff intensifies after China raises tariffs on US goods in retaliation.

The near-term technical outlook points to overbought conditions.

EUR/USD gained more than 2% on Thursday and extended its upsurge on Friday to a new multi-year high above 1.1400. Although the pair’s near-term technical outlook points to overbought conditions, investors are like to stay away from the US Dollar (USD) amid a deepening US-China trade conflict.

Growing fears over the US economy tipping into recession caused the US Treasury bonds and the USD to remain under heavy selling pressure on Thursday.

On Friday, China’s Finance Ministry announced that they will raise additional tariffs on US imports from 84% to 125% from April 12, in retaliation to the US’ tariffs on Chinese goods.

This development caused the USD selloff to intensify and triggered another leg higher in EUR/USD in the European session.

The US economic calendar will feature Producer Price Index data for March and the University of Michigan will publish the Consumer Sentiment Index data for April. Investors could ignore these data releases and remain focused on fresh developments surrounding the US -China trade war.

In case US President Donald Trump responds by increasing tariffs on Chinese goods even further, the USD selloff could continue heading into the weekend. On the other hand, the USD could stage a rebound if one of the sides takes a step back to ease tensions.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart climbed above 80, highlighting overbought conditions for the pair.

On the upside, 1.1500 (round level) could be seen as the next resistance level before 1.1535 (static level from November 2021) and 1.1600 (static level, round level). Looking south, supports could be spotted at 1.1300 (static level, round level) and 1.1200 (static level, round level).

Copper price didn’t move anything since yesterday’s trading, delaying the bullish rally by its repeated fluctuation below 38.2%Fibonacci correction level, which represents an intraday obstacle by its stability near $4.4000.

The continuation of stochastic attempts to provide positive momentum and the repeated stability above the critical support at $4.000, these factors make us keep the bullish suggestion, to expect the mentioned obstacle and holding above it, targeting extra positive stations that begin at $4.5600 and $4.6800.

The expected trading range for today is between $4.2300 and $4.5600

Trend forecast: Bullish